How concerned should I be about an underground storage tank?

Many small independant gas stations have gone out of business rather than dig up and replace their old underground storage tanks. The tank has to be removed, all the contaminated soil dug up and disposed of as toxic waste, and a professional remediation by a licenced clean up company.

I don’t know about your area but there are many old out of business gas stations where I live. It wasn’t some gas war that put them out of business, it was the cost of removing and remediating old storage tanks.

You could easily go broke buying this property. Be sure you have tens of thousands of dollars to spare.

I’m not talking about a $150 soil test. Start here:

This is the page relavent to your situation. Even abandoning the tank can lead to significant expense.

If I read you correctly, you’re saying *your * Realtor doesn’t want to have the soil tested? This sounds like a Realtor working against your interests. If that is the case, walk away from the deal, because with a (allegedly your) Realtor and a seller against a buyer, the end result cannot be good. If it was the seller not wanting to have the soil tested, tell the Realtor to stay out of this. The Realtor is just a salesman, and doesn’t have any way to add value, or negate liability, so kick Realtor to the curb. Just my two cents worth.
Best wishes,

[former Realtor] hh

You’re not reading him correctly. From the OP:

ZenBeam is right. It’s not our Realtor who doesn’t want to get the soil tested. In fact she’s the one who suggested it. It’s the seller who doesn’t want to do it.

I don’t live in an area where they have home tanks in the ground, but I have dealt with inground tanks on commercial property.
Based on that experience, I would not buy a house with an inground tank unless the seller removed the tank and had the site cleaned up. And I don’t mean by three guys the seller hired outside of Home Depot on Saturday AM. A full legal remediation with all the paperwork filed, and all the I s dotted and Ts crossed.

I’m an environmental engineer, and I have overseen the investigation, removal, and remediation of many underground storage tanks (UST). I absolutely concur with everything that has been stated so far.

First off, it is absolutely a huge liability that you could be taking on. There are many unknowns, such as whether the tank is leaking or not, and if it is leaking, how much heating oil leaked. Tanks can leak for decades with the owners not being aware of it, potentially leaking thousands of gallons of oil. And for what it’s worth, virtually all USTs leak–it’s just a matter of time. I’ve never seen a pristine, un-corroded tank come out of the ground.

The removal of a non-leaking tank can relatively cheap, but even a simple tank removal involves numerous soil tests of the tank grave to confirm that nothing has leaked. Such a simple removal may cost somewhere in the range of $2K-5K.

If the tank has been leaking, the sky is the limit as far how much it can cost. I have personally overseen the investigation of a larger UST that leaked heating oil for decades. Estimated remediation costs were in excess of $250K when I was last involved in the project. All of the contaminated soil has to be removed and disposed of, and groundwater tests can be required for years.

With respect to the OP, I would not be satisfied with a simple external soil test. The only way anybody is going to conclusively know if the tank has leaked or not is to remove the tank and test the soil directly underneath the tank. If the current owner is not willing to do this (i.e. pay for the proper removal of the tank), I would get my up-front money back and walk.

You know, the more I think about this, the more sure I am that I would never, ever buy a property like this. Way too much potential liability.

What are you going to do, BKReporter?

You need to not just have the soil tested. You need to have the tank removed if it is not being used anymore. As stated above it will cost about $2 grand + or -. The removal will identify any leaks and the need for any soil or ground water remediation. Which would be extra $$$ if identified.

If the seller is not willing to do that, then they don’t really want to sell their house. Walk away.

Thanks everyone for the advice. My wife and I are novices to the homebuying process and all this has been very helpful.
I already called my Realtor and told her we’re backing out. We were getting a pretty good deal, and I had been willing to take a chance, pending a soil test of course. But now even if the seller did decide to go through with it, it just doesn’t seem worth it.
This could become an enormous headache if I need to move in a few years for work, which, with the way things are going in the newspaper business, is very much a possibility.

Make it .04:

I’d go talk to couple Realtors and maybe a lawyer before backing out. If this is a great deal then I’m not so sure I’d be backing out.

There is a practical side to all of these things, and often a big divide between the potential risks and what happens in real life.

My county has had an Oil Tank Abandonment program in place for more than 10 years, for residential inground oil tanks. We get our drinking water from deep aquifiers. The county wants to have as many tanks as possible switched to above ground. They offer a $100 rebate to homeowners.

The program requires having an accredited company pump all oil from the tank, rinse it several times with a solution, then fill the empty tank with foam. No soil testing was required.

Cost was about $1000 IIRC. That was several years ago. I believe there was also a federal or state tax credit.

I suspect the seller knows more than she’s letting on and hoping someone fall for this reasoning.

Maybe it’s such a great deal because the seller wants to unload a problem on the next in line.

Maybe that’s true. It’s certainly possible.

In my business, I am in the periphery of this issue. I’ve pulled out many oil furnaces and have seen every approach----from simply abandoning them in place (sometimes even with oil left in them) to pumping out the oil and abandoning them, to filling them with sand, to removing them by guys with track hoes, to full removal with soil testing.

The overwhelming amount of them handled them in a responsible way, and I can’t ever remember the tank (which I’ve seen outside, in garages, sheds, and underground) being a huge deal----or deal breaker.

If you’re buying a parcel that had a gas station on it, I’d be plenty worried. My only point is that this risk seems very manageable to me; and it is at least possible that both the buyer and seller have an irrational fear borne of uncertainty—of inexperience.

Maybe my fear is lessened because I’ve been involved with this. But my counsel is not to cut and run over an oil tank. They may find that there is a very cost effective way to handle this; like Any Other Name mentioned.

Do not close on the property until you are completely satisfied regarding potential liability from that tank. I can say this with some assurance based on EPA requirements for property bought for redevelopment and resale by my ex-boss that had at one time been the site of a service station. What you’re willing to pay $150 for is Phase I testing, which will determine if there is any need to progress to Phase II testing (significantly more expensive). While IANAL or a real estate agent either, I’d recommend strongly that part of the agreement for purchase say you’ll pay for Phase I tesing, but the seller will have to pay for Phase II testing and any needed remediation out of her selling price, if they should become necessary.

Talk to a lawyer, one who’s handled closings with environmental issues. I can’t stress this strongly enough. My ex-boss ended up paying about $1050 to clear the property for subdivision, residential construction, and resale, even though there was no longer a tank on the property, as there were a minimal amount of residual petroleum contaminants in the soil, and he had to have a lab do multiple test samples and clear them all as below the danger threshold before he could get a release to build and resell.

Actually, according to ASTM standards, a Phase I Environmental Site Assessment (ESA) is solely a research and site reconnaissance project. Phase I ESAs do not generally involve any actual environmental testing. A Phase I basically consists of researching the history of a given parcel to find out what activities have taken place in the past. This is accomplished by researching state environmental records/reports, land records (i.e. property transfers), old phone directories, Sanford Fire Insurance maps, historical aerial photos, etc. You also look at nearby parcels. A Phase I ESA should tell you if a parcel or nearby parcel used to have a gas station or dry cleaner on the property (two examples of businesses commonly implicated in soil and groundwater contamination). Finally a Phase I will include a site walk-through and interview with the owner which should pick up on issues such as abandoned USTs like we’re talking about here. The results of your Phase I will tell you if you need to progress into a Phase II. A complete Phase I ESA is fairly extensive and takes about 20-30 hours to produce ($2K-3K at the going rate for most environmental professionals). There is also a an abbreviated version known as a “Transaction Screen.”

As soon as you get into soil and water testing, you’re generally considered to be doing a Phase II ESA. If the Phase II ESA picks up on contamination, you continue testing in a wider area to delineate the extent of the contamination. From there, you move on to remediation and post-remediation testing to confirm that all of the contamination has been removed (i.e. levels are below the applicable regulatory standards).

P.S. $150 will typically pay for for just one sample taken and analyzed for one specific contaminant, such as total petroleum hydrocarbons (TPH).

(A complete screen for metals, TPH, volatile organic compounds, semivolatile organic compounds, PCBs, pesticides, and herbicides can cost more than $1,000 per sample. Your Phase I ESA will tell you if all of this is necessary, though. Such a thorough analysis is not at all typical for a residential site. It is very common at some industrial sites.)