If you are considering buying an older, charming home you can pretty much rest assured there was, or is the presence of an under ground oil tank (known legally as Underground Storage Tanks – UST). If there is one, do not be surprised and there’s no need to panic. There’s no doubt removing an underground oil tank is a big pain in the you know what, but it is commonplace in this area of the country and is no reason to walk away from a home you adore.
Why are oil tank removals necessary? Because if left under ground for years and years they can corrode, and subsequently leak oil into the ground and even the water supply. When the EPA first got involved with oil tanks they allowed home owners the option to drain them and fill them with sand or stone and remain below ground. However, that has been found to be ineffectual. Today most townships will not issue an inspection certificate unless the tank is pulled out and the surrounding area tested for contamination.
Oil Tank Removal – The Unknown
The seller is responsible for removing the tank. Almost every home owner who has an underground tank has “tank insurance” which hold them harmless for the cost of any necessary remediation should there be contamination. The cost of the removal is not covered and typically costs about $2,000.
Sellers should begin the removal process as soon as they decide to put their house on the market since it is a bit time consuming. They are required to show the documentation attesting to its safe removal prior to the closing. However, many sellers wait until they have a contract in hand before having the oil tank removed, which can delay the closing process–depending on what they find when they dig it up.
On Friday, one of my sellers had her tank dug up only to find it was inundated with holes and the ground registered high amounts of contamination. This threw a big fly in the ointment because it is the unknown part of the process that gets everyone nervous. Had the tank been in tact and the ground tested free of toxins, they would have carted off the tank and filled in the hole and that would be that.
Unfortunately the ground tested positive for high amounts of contamination so there is an extra step in the process–known as “remediation.” To remediate the situation, the contractor will come back and continue digging 4 feet on all sides and testing the earth for contamination. He is done when there is no further evidence of contamination. Soil samples will be sent to the geological lab for final evaluation. If the tests prove all contamination has been successfully removed the next steps are taken. The town will come to re-inspect the area and if it passes will issue the certificate. Then the seller must apply for a “No Further Action Letter” from the state. The letter from the state can take a few months so many transactions close prior to receipt of it and have the attorneys keep money in escrow just in case.
Hiring a certified contractor to remove and if necessary remediate the ground area is essential.
Burying oil tanks is a very environmentally unfriendly idea and a very old notion of “what we can’t see won’t hurt us.” Yes, they can cause some delays and extra anxieties, but oil tank removals are essentially a good thing for us all.
For more specifics on the process please go to http://www.nj.gov/dep/exams/ust.htm