For decades oil and gas tanks have been buried in the ground and in the last twenty+ years, those tanks have have to be removed after contamination was discovered. As more businesses and homeowners have replaced old boilers and converted to gas heat, a whole new industry has popped up to deal with soil testing, contamination and tank abatement or removal.
Let’s say your client hires a company to perform a metal detection tank scan of his property and the experts gave him a certificate which states, “No buried tanks on the property.”
Along comes a buyer with his inspector, and they find a tank. Not in the likely place, but over 30′ from the house and close to the street. They find a large tank that leaked oil and a big clean up is underway. It could take months to get the No Further Action letter from the DEP, and we thought we were all set with that original clean scan report.
After much investigating, I uncovered many startling facts. There is a disclaimer on the form you sign when you conduct a tank scan and not all companies scan the entire property. It is unclear if a clean report would reveal that only part of the property was scanned. Even if you receive a copy of a scan report, a buyer could be advised to conduct his own, just to be sure he gets a full scan.
Before underground tanks became a hot topic, many people converted from oil to gas heat, leaving the old tank in the ground. Permits were not always required and residents had tanks filled with sand or dirt, by their local fire department. Often owners have paperwork with a township permit indicating a tank was removed, only to find the actual tank company records say it was abandoned and it is still in the ground. The lesson here is you need to see both sets of records, not just the town permit, and be prepared; they may not match.
Several years ago, when tanks were opened, the top was cut off and it was filled with gravel, sand, petrofill foam, or dirt, and the top of the tank was discarded. When the tank became covered with soil, grass, bushes, a driveway or deck, the existence of the tank by a metal detection test may give a false reading. It is possible that the buried perimeter might not show up on the reading. I also found some lids of tanks were put back in place, however, there is no way to know which practice was most common in any specific timeframe in a particular town.
Because the guidelines have changed, many early abandonment’s were not done by permit or to current codes with proper inspections, some attorneys are insisting that abandoned tanks, even with proper paperwork, now be fully dug up and removed. Sellers need to be aware that even with a copy of permit, a letter from the oil tank company and no apparent problems, they may still be required to remove a tank of have soil samples taken. Once that is done, there can also be restorative work that is needed to the driveway, yard, patios, bushes, walkway, etc.
Beware if one tank was removed or properly abandoned, it does not mean that another tank is not on the grounds. When one tank went bad, often another was buried in a completely different location, and that one could still be in place. A new tank may have been put into the garage or the basement, or the homeowner converted to gas heat, or that second tank is buried somewhere. There was the case of a subdivision of a large estate, where one newer house, built on part of the land of a bigger home, actually inherited an old tank from a different house, on their front yard. Those people never bothered to conduct a tank scan because they were buying a relatively new house that had only used gas fired heat.
In some older homes with detached garages, if the previous owner had a driver, a gasoline tank may have been buried alongside or behind the garage to fill the cars. They were smaller than oil tanks, but underground and rarely checked, found or tested. The fuel lines may be found on the wall in the garage if not obscured by objects stored in the garage.
My husband and I bought a commercial property and when we conducted a tank scan there were signs of metal buried but it was not until we dug up a large portion of the parking lot that we found it was just piles of scrap metal that was put in the ground rather than disposed of properly when the building was constructed. Today there are companies that actually can take a photograph underground, like an ultra sound image, and tell you what they see before you start digging.
Right now in Taylor Park, in Millburn, NJ, there is a HUGE oil tank spill that is predicted to cost tax payers approximately $600,000 to clean up. Years ago when the community center burned down and was rebuilt, no one from the recreation department told the building department that there was a 3,000 gallon tank in the ground. The new building went up, the new gas heat was installed and for years the tank sat in the ground leaking. Now when the township should have had a fishing derby and a beautiful park for residents to enjoy, there has been big machinery digging up the earth and ugly orange fencing to keep people out of the contaminated area.
This just scratches the surface of things to be aware of. Make sure you know about oil tank insurance, what it covers, as well as your homeowners insurance. If a tank spills oil onto a neighbors lot, gets into the water, backs up into the French drains or sump pit in a home, what then? Getting permits, tree removal in the way of a clean up, and how to avoid sprinklers and utilities are a few other things to keep in mind.
I also heard of a situation where a house required termite treatment and the pest control company accidentally drilled into a buried oil tank that was close to the foundation.
Just when you thought you had heard everything, there is always more to know. If a seller swears that a tank was abandoned properly but they can’t find the paperwork, you better ask your attorney for advice. If you accept the situation, it does not mean that your buyer will agree to do the same thing when you sell the property in the future.
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