My wife and are looking to buy a house. We’ve gotten as far as making an offer, but then we found out about an underground storage tank on the property. We’ll be getting city drinking water, so it’s not too much of an environmental concern for us. But we’re worried it might be a liability if we try to sell later on. We offered to pay to get the soil tested ourselves (even though the seller is covering all of the closing costs), but then she she said she didn’t want to get it tested, which kind of raised a red flag.
Anyway, how worried should I be about this? What would a reasonable course of action be? We put down some good faith money, but because the seller doesn’t want to get the soil tested the Realtor said we can get the money back if we chose to back out.
My gut reaction is that if she doesn’t want it tested, she knows something she doesn’t want you to know.
Since you are willing to pay for it there should be no good reason not to run the test. Tell her you will walk without the test and check out her reaction. There could be anything down there, do you really want to risk your investment and possibly your health just to save a buck?
Once you own it, clean up is your responsibility, no matter what date it stems from, no matter how long you’ve owned it, no matter what it is, no matter the cost.
Insist on the test. If they know there is a tank, they must have some idea when and where it came from and what is was for, even if only a wild ass guess.
I’d back away, were I you, and get my ‘up front’ money out.
You’re assuming that a contaminated well is the only negative consequence… it’s not. My biggest concern would be the liability for contaminating other people’s drinking water, or leaching of contaminants (it’s most likely an oil tank) into other people’s property. You could be responsible for substantial cleanup costs – either on your property or someone else’s – to comply with EPA regulations.
I am not your lawyer but if I was your friend, I’d advise you not to even consider buying this property without an assessment by a professional, and even then probably not.
I second this. In my perusal of a legal forum or two I have happened on stories of people having to get tanks removed and remediated to the tune of tens of thousands of dollars. The risk isn’t probably so much actually purchasing and living in the home, but someday when you want to sell the place.
It was apparently used for heating oil.
Around here (Northern NJ), an underground tank makes it very difficult to sell your property. The costs can be substantial. In the situation you describe I would walk away unless they remediated it completely. What did your inspector have to say?
Actually, we haven’t even had it inspected yet. We just finished negotiating and formalized an offer over the weekend. We got the seller to cover closing costs, but she didn’t want to pay for the soil testing. I figured we can pay for it ourselves. It’s only $150, and I’d much rather pay that now and get peace of mind, rather than paying thousands later when it becomes my responsibility. But then I get a call today from our Realtor that she doesn’t want to have the soil tested at all.
We had problems with ours when we went to refinance. We had to pay to get it removed before the bank would approve our refi. Personally, I’d have the sellers pay for removal first. It was a huge mess with our refinance, and we had to spend thousands to get that tank out.
(The reason why it didn’t come up when we bought our house was the laws changed between the time we bought it and the time we went to refinance. It’s been years and I’m still pissed).
I also live in NNJ, and had this exact thing happen to me when I bought my house. The owner ended up paying for the removal of the tank, new “clean” soil and a new sidewalk… $10K in all. The EPA gets involved, so it’s not something you could ignore even if you wanted to.
As one who has worked in environmental clean up programs, the simple answer to your question is “VERY,” very concerned. Insist on testing and do not even consider buying the property without making sure the issue is 100% resolved.
Even if she isn’t already aware of a leak, it’s quite possible that she doesn’t want to do the test because if any contaminants are found she’d be legally required to disclose that fact to any other prospective buyers, assuming you did back out of the deal. She’d rather be able to truthfully say “I have no idea if the tank has leaked or not.”
We tested and nothing had leaked, but we STILL had to have the tank completely removed first. Maybe our state laws are different, but don’t get the shaft like we did. Do your financiers know?
Just FYI it is a federal issue, not state.
I’m am HVAC guy, and we regularly remove oil furnaces in favor of heat pumps etc.
We use a local guy who will remove an in ground tank for around $2000. Of course, YMMV.
But there are potentially EPA issues, so don’t cowboy a solution. IANAL, but I believe you have an obligation to disclose this tank when you sell, so this may be a problem for you at some point in the future.
Still, that said, I’ve known more than a few people to simply abandon them in place, and a few have pumped out the oil and filled them with sand.
My .02: If I was buying I’d make it a point of negotiation and get quotes to remove it, and adjust my offer accordingly.
I used to work in tank remediations. I personally wouldn’t buy the house unless the tank was closed according to regulations. That certainly includes testing, and can involve either complete removal or removing all oil, rinsing, and filling with sand - that is generally an acceptable approach, depending on local conditions.
My concern wouldn’t be so much health concerns or drinking water - heating oil doesn’t travel far when it leaks (compared to gasoline or lighter-weight petroleums). But you don’t want to be on the hook for a potentially expensive cleanup, and it will reduce your property value if you don’t deal with it.
I’m sure the poster above who said the seller probably doesn’t want to test because she’s then required to divulge this info in any future transaction is correct. But you don’t want to be the one stuck in this position next time - walk away if she won’t change her mind.
Also, make sure you get a company who really knows what they’re doing for the testing. If the soil is sandy, any leak will go down rather than spread. Testing soil alongside the tank might not reveal a leak. Other kinds of tests (like pressure-testing) might be more appropriate.
I also work in environmental remediation and agree that you should be very, very cautious. As said, it could turn out to be very messy and very expensive for you if something is wrong (or goes wrong in the future).
I know you’re in the US, but here in Canada, afaik, a mortgage provider won’t provide a mortgage on a property like that without a Phase II (which is essentially testing to see what/if there is a problem). Way too much liability.
Best case, it was abandoned properly and won’t be an issue (though they should be able to prove this and it should probably be removed anyway).
Worst case, it was full when they abandoned it, it leaked, there is a huge plume of contamination, and it’s right by a drinking water aquifer. Doesn’t matter if anyone is using the aquifer, someone could use it. The EPA will get involved and it’s a bad, bad thing.
(BTW, does the US have ‘polluter pays’ legislation, and does it ever work?)
In the US, pretty much anyone involved in any part of the tank’s life can be a potentially responsible party (PRP) and on the hook for remediation. That could be past owners, the company that installed the tank, the company that filled it, and the current property owner. Regulators will typically go after whoever is easiest to find and has the most likelihood of being able to pay. Pleading ignorance is no excuse - it’s your duty to know about the tank and its condition. You are free to sue someone else that you think is “more responsible”, but the regulator doesn’t care about the success of that. You’re on the hook no matter what.
It works well, particularly in cases like this where it is easy to find a PRP.
The lady doesn’t want to test even if you pay, because if something is found it will cost her a a lot to clean up. It’s not the $150 it’s the potential of thousands that is her problem. Once a problem is detected she has to do something about it.