I’ve Heard of Oil Tanks, What’s The Deal With Them?
How Do I Know If The Home Has An Underground Oil Tank?
What Are The Dangers If I Don’t Check?
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You’ve all heard of home inspections, but have you ever heard of oil tank inspections?
Many buyers these days are just not educated when it comes to watching out for this potential risk.
For those who are not aware, many single family houses prior to 1975 were heated by oil. This was before houses were connected to gas. The oil would come from an underground oil tank buried beneath the property.
When the availability of gas came into the picture and homes connected to gas, many underground oil tanks were decommissioned, as in the oil was pumped out of the tank and the oil tank removed. Unfortunately, many oil tanks had their tubes “tied” but were never removed from the property and to this day, there are still some houses that are still powered by the oil.
The danger is for those houses that still have an underground oil tank.
Why, you say? Well, because the lifespan of the oil tank is supposed to be about 25 years and so after that time, the tank will begin to corrode and pose a contamination hazard as oil can leak into the soil of the property. If the oil spreads to the neighbors, you’ve got a bigger problem.
To put it briefly, you may have a lawsuit on hand to decontaminate and such and it could make you liable for tens, even hundreds of thousands of dollars worth of damage depending on how severe the contamination is.
The good news is that most sellers will have the oil tank removed if they are aware of it. It is not mandatory, but buyers are going to have a difficult time obtaining a mortgage and home insurance on a property that has an oil tank buried underneath it. If that is the case, if sellers don’t remove the oil tank, they’re going to have a difficult time selling their home.
It is also in the best interest of the seller to remove the oil tank because if there is any problem with the oil tank and decontamination, the buyers can hold the seller liable for damages even after the buyer buys the seller’s home.
It’s not that expensive to remove the oil tank so it really is beneficial for sellers to remove an oil tank if it is in existence. It may cost a couple hundred dollars to a few thousand dollars if there is no contamination to the soil.
For buyers, just how you spend a few hundred dollars for a home inspection, if the house has signs that it may have been connected to an underground storage tank, an oil tank inspection can be done. Buyers would hire an oil tank inspection company who would scan the property to see if there is an oil tank in existence. The fee is also very minimal, about $200 – $300.
The important thing to note about oil tanks is that sellers need to be aware that they need to know whether their property has an underground oil tank if their property was built before 1975. For buyers, do your due diligence, do an oil tank inspection and find out because it can be a very costly mistake if you bought a house and found out later there’s an underground oil tank and it has leaked…
Make sure you have this conversation with your Realtor and if you have any questions, feel free to contact me about it.