Selling a House with an Oil Tank

WHAT EVERY REAL ESTATE PROFESSIONAL SHOULD KNOW

There are several things real estate professional should know before purchasing or selling a home that may have previously used heating oil.

  • 1. Always assume that older homes used oil to heat their homes in the past. Most homes built prior to the mid 1960’s used an oil burning heating system with either an underground tank or an above ground tank.
  • 2. Ask your home inspector or contractor to locate any underground or above ground tanks on the property and to note this on the inspection report.  Old copper lines may also give clues that at one time heating oil was used.  The existence or possibility of buried tanks should be addressed prior to purchasing the property.  Even though the seller claims no knowledge on the disclosure form, it would be wise to add this as a contingency on the offer to purchase.
  • 3. Old tanks can leak oil over time contaminating the soil and possible ground water. This contamination could go on for years before it is detected.  If there is evidence of an underground tank you, as a potential buyer, should request soil sample be collected BENEATH the tank to evaluate if the property has been contaminated by the oil tank (note: it may not be possible to collect a soil sample from beneath a tank without removing the tank). 
  • 4. If contamination is discovered, the property cannot be sold until the contamination has been cleaned up to State standards.  Maryland and Virginia both have reimbursement programs for residential homeowners, Ace can assist with these programs.
  • 5. Underground oil tanks that have been previously removed may still create a liability for the current owner if there is no evidence that soil samples were collected. The current owner is responsible for any cleanup. 
  • 6. Simply filling abandoned underground tanks with sand or foam will not relieve the owner from responsibility for contamination.  Ace can conduct a simple preliminary inspection that takes about an hour to evaluate “proper” abandonment and/or possibly evaluate if impacts may be present.  In most cases tanks should be removed from the ground and the soil tested.  Only then can you assure a buyer that you have taken appropriate action to correct any problems.
  • 7. Maryland and Virginia both have reimbursement programs for residential homeowners, Ace can assist with these programs.

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    We are all becoming increasingly more knowledgeable about environmental issues, abandoned underground oil tanks and potential hazards from leaks.   It is more likely that the seller will have to correct the problem prior to the sale being completed.  These issues can have a negative impact on your ability to sell a property and can decrease the value as well.  Knowledge of these often overlooked problems can prevent you from having an oil spill in your backyard and a real estate disaster.

 

Homeowner and Real Estate Professional Advice

In the State of Maryland, if an underground oil tank is no longer in use, it must be removed or closed in place. Closure in place has very specific requirements and requires pre-approval. Additional information can be found here: Maryland State Residential Heating Oil UST Closure Fact Sheet.

 

In today’s real estate market, no one wants to make selling a home any harder. For right or for wrong, houses with oil tanks carry a stigma that can reduce the curb appeal of a home. Oil tanks receive more bad press than good, because telling a story about a leaking oil tank is more interesting that talking about an oil tank that is not leaking and the fact is most oil tanks do not leak.

 

If you take the proper steps you can overcome any stigma a buyer may have regarding an in-ground oil tank. The first step is to give your house some tank curb appeal. No doubt your realtor provided advice on preparing your house for prospective buyers, such as landscaping, painting and cleaning up clutter. What they may not have provided is what to do with your oil tank. The best defense is a good offense and what people are afraid of with an oil tank is if the oil tank is leaking. Some might say that the easiest approach is to have the tank tested. Truth be told, this is far and away a cheaper alternative than removing or replacing an oil tank or converting to another fuel source. It directly addresses the primary concern of a purchaser of real estate that a tank has not leaked. However, it is very possible to get false positives that indicate that the tank is not leaking when in fact it is. Testing technologies are intended for much larger tanks and sometimes just the soil type around the buried tank is enough to provide a seal for the tank test to provide a false positive. It is also very possible for a false negative to indicate that the tank is leaking, when in fact it is not. Regardless, if the home owner and/or real estate professional is interested in this service, we can provide it.

 

Oil tank testing by obtaining soil samples from around the buried tank provides some results regarding the oil tank, however not always an indication if the tank leaked or did not leak. If the soil test determines that the soil is acceptable, the home buyer can use the soil testing report to facilitate the tank closure process after the real estate closing. However, this may not answer any question as to whether the tank presents an environmental hazard. This option is a little more expensive than tank testing, and may still product a false negative result. Most tanks leak directly from the bottom of the tank, so soil sampling around the tank may indicate that the tank did not leak, when in fact, it did.

 

The only true way to know if a tank is leaking is to have it removed.

 

It is more common that the homeowner tries to sell the house with the tank in the ground. After a deal or two falls through because of the oil tank, most sellers realize that doing nothing with the oil tank can severely limit the number of potential buyers.

 

This page is not meant to be all encompassing regarding oil tank testing during a real estate transaction, but rather to provide options. Not every situation is the same, some tanks are being used, others have been taken out of service, others still have been filled in place with sand, foam or concrete. No matter the situation, Ace has over 30 years in dealing with oil tanks. If you have questions that this site has not addressed, contact our office and speak to one our professionals.

 

For more information, call Ace Environmental at 410-354-8030 (local Baltimore, MD) or toll free at 866-750-4ACE.