Q I have an unused underground fuel oil tank on my property. I have been told that real estate agents will not list a property for sale if it has an underground tank. Our house was heated with fuel oil when we bought it, but we soon converted to gas heat and had the oil tank drained. We understood at the time that that was all that was necessary. Now, we are told we will need to have the old tank removed at an expense of $1,000 or more. What do you know about this, and how should we proceed?
H.L., Bothell
A Federal law regulates commercial underground gasoline and hazardous materials tanks, but specifically exempts heating oil tanks. There are no federal, state or local laws that require the removal of an unused heating oil tank from a residential property.
However, many mortgage lenders will not make a loan on a property containing an unused oil tank, so far all practical purposes the tank must be removed if you want to sell it to anyone other than an all-cash buyer.
Lenders are concerned about the potential liability for financial damages if the old oil tank leaks and causes an environmental problem. A leaking oil tank could pollute your neighbor’s property or contaminate your own home.
There have been horror stories of heating oil seeping into basement walls, which then had to be torn out to eliminate the stench. I know a homeowner who had to spend hundreds of thousands of dollars to clean up and repair the damage caused by an underground oil tank that had been leaking for several years and polluting the surrounding land.
You can reduce the contamination risk by pumping the tank dry, which you’ve already done. But that doesn’t eliminate potential problems caused by oil that is already in the ground.
The other risk you face is that the empty tank will collapse and create a sinkhole in your yard. Experts recommend filling an empty tank with an inert solid material such as sand. The problem with filling the tank is that you then create an enormous underground boulder, which you may later regret if you ever have to do any excavation work in the yard. However, in some cases, filling the tank may be the only reasonable alternative if the underground tank is not easily accessible to be removed at a reasonable price.
In your case, I recommend having the oil tank removed from your property.
Call around and get several quotes, because prices charged by oil tank removal companies vary widely. When the job is done, you should receive a certificate from the company stating that the oil tank was removed from the ground and properly disposed of.
A few years ago, I sold a house that had an unused underground oil tank. I had the tank removed and then recorded the tank removal certificate with the deed to the property. You are not required to do that, but I think it’s a good idea because it becomes a public record and you don’t have to worry about losing the certificate that proves the oil tank has been properly removed.
As for real estate agents, I’m not aware of any companies with an official policy against listing properties with underground tanks. Agents will typically advise you to fill or remove the tank to eliminate your (and their) legal liability, and the existence of the tank must be disclosed to all prospective buyers, but you won’t have any problem finding an agent willing to sell your home.
Mail questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206. Fax questions to Tytler at 425-339-3435, or e-mail him at economy@heraldnet.com.
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