Buying a house with an oil tank is one of the biggest financial liabilities a home buyer can assume. Buried oil tanks and Aboveground Storage Tanks (ASTs) leak over time, and the oil pollutes subsurface soil and leaches into underground water. Bottom line, oil tank leaks are expensive and owners of contaminated sites are responsible to clean up these leaks.
Buying A House With An Above Ground Oil Tank
Environmental regulations dictate what is permissible amounts of oil that can remain in the ground. If oil levels are above permissible limits you have to remediate, remove contaminated soils to clean up the oil. The owner of the property is the responsible party. Small oil tank leak cleanups will cost around $10,000.00 and large soil remediation projects can exceed $50,000.00 even up to $100,000.00. At that point, sellers are motivated not to make a big deal about an oil tank and buyers have to be cautious about buying a house with an oil tank.
Oil tanks are confusing for those involved, as these oil tanks and leaking oil tanks have laws, regulations and liability Oil tanks have liability like that of driving your car, risk is everywhere, but to understand the risk with oil tanks you have to look at the tank on a molecular level.
New tanks today, on average, have of 10, 20, 25 and 30 year warranties, depending on what tank you buy. Clearly the more expensive tank has the longer warranty. The tank on the left has a 30 year warranty, the tank on the right if bought today with a basic warranty would have a 10 year warranty.
Is buying a home with an oil tank a good idea? Well if the oil tank has been replaced and you have a warranty, then you have a good baseline regarding when the tank will need replacement. This unicorn and rainbow scenario is likely three percent of transactions where an oil tank is present. The norm is the seller will say "I bought the house with the tank and so should you".
If you are buying a home with an oil tank, the best advice is to ask the owner to remove and replace the oil tank. The reason being, the tank is most likely well past a reasonable life span, and when it leaks you will not know, it's not a roof where leaks are obvious. It is also not always worth testing the tank due to the age, regardless of if you get a passing tank test, there will be a recommendation to remove the tank due to take age.
If your trying to sell a home with an old oil tank, read the paragraph above. No one wants to buy an old tank, which by all standards (common sense included) is old and should be replaced. If you are the last person holding the straw and are responsible for removing the tank, I am sorry, I would give you the same advice if you were buying a house with an oil tank.
Heating oil was once a popular way to heat homes and buildings in Portland, but most are now using electricity or natural gas. However, the legacy of heating oil remains in the form of underground tanks that were used to store the oil on site, especially in homes built prior to 1965. Some of these tanks are the source of toxic ground contamination, which can also emit fumes into the air.
According to the Oregon Department of Environmental Quality, there are 27,308 permanently decommissioned Heating Oil Tanks, or HOTs, buried underground across the state. Tens of thousands more are still in operation (both above and below ground), heating homes today. Plus many thousands more are sitting abandoned underground (some leaking oil and some not) and no one knows they are there!
The U.S. Energy Information Administration (EIA) states that more than five million American households used heating oil as the primary fuel between 2019 and 2020. This makes heating oil one of the most popular fuels for domestic and commercial heating in the country. If you use oil as your home heating fuel, at some point, you will explore proper oil storage via an oil tank. You can opt to have an above ground vs underground oil tank. This is crucial as having the right oil tank will help keep you from dealing with unnecessary costs and problems.
The names of the two kinds of oil tanks are indicators of where they are installed. One is placed above the ground surface while the other is below. Aboveground tanks are typically placed next to a wall for improved safety. Houses built in the 1960s usually have either of these two oil tanks as heating oil was widely used at that time. Currently, aboveground tanks can also be installed inside or outside your home, depending on where you prefer to put them.
Every household has varying needs. Therefore, both kinds of oil tanks come in different sizes. Underground oil tanks usually have a larger capacity than aboveground tanks. The standard residential aboveground tank can hold 275 gallons of oil, although other tanks come in capacities that range from 160 to 400 gallons. Whereas, underground tanks can hold up to 1,000 gallons of fuel oil. Commercial fuel tanks can carry even larger capacities as well.
Underground oil tanks are in a hidden location. Therefore, accidents rarely happen. They are a suitable choice if you are looking for safety and durability. They are not consistently exposed to the elements, such as extreme weather, like aboveground tanks are. The challenge is when the underground oil tank experiences a problem as it can be hard and expensive to resolve the issue. Aboveground tanks are easier to access. Fortunately, most issues with these two tank types can be avoided. Take note to book an oil tank replacement when your oil tank is nearing the end of its lifespan.
Aboveground tanks are easily accessible, but they are vulnerable to threats like snow, strong winds, and fallen branches. These perils tend to wear out aboveground tanks quicker than their underground counterparts. Moreover, oil tank theft is on the rise, so it is recommended that aboveground tanks be placed in a secondary containment system within view from inside your home. This will help better secure it and enhance environmental protection.
Underground tanks are more difficult to access. However, they are still more convenient when it comes to space utilization. After all, some homeowners think aboveground oil tanks to be an eyesore. They can take up ample space in your yard, making it harder for you to mow the lawn and do other landscaping tasks. When you have an underground tank, you do not have to deal with these problems, as you can maintain your landscape while easily improving the appeal of your home.
You might have noticed that both aboveground and underground oil tanks have advantages and disadvantages. There is no better option between them. Choosing one over the other depends on your preferences. To help your decision-making, here are a few factors to consider about the residential heating oil tank you should have in your home:
Oil has carcinogenic properties, so a leaking underground oil tank can mean trouble. Concerns range from soil contamination, ground water contamination, property damage, vapor hazards, fire hazards, loss of property value, and more.
To make matters worse, the responsibility for remediating any contamination caused by a leaking tank rests solely with the property owner and can be very costly depending on the size and scope of the clean-up.
During the tank sweep, the contractor will utilize metal detection equipment and make other visual observations of the property (both interior and exterior) to try and determine whether a UST might be present under the ground.
The technician will look for evidence of a tank such as fuel lines or vent pipes protruding from the ground or entering the home through its foundation walls, depressions in the yard, patchwork indicating that lines or piping were previously in use and removed, areas of dead grass or landscaping caused by spillage from a fill pipe or from an active oil leak beneath the ground.
Plus, you can likely look to your tank sweep contractor in the event a tank was missed during the initial sweep. Reputable companies will usually work with you to remove the tank at their cost or at a discount to you.
There have been plenty of instances all across the state where an old tank was left in the ground when a new home was constructed, or a tank was left in the ground when a prior owner decided to install an above-ground tank, or a UST was properly removed with proper permits and no issues, but a second leaking tank was found buried in a different part of the yard.
Once the permit has been paid for and issued, the actual removal work can begin. When the tank is removed, the tank itself and the ground in and around the area from where the tank was unearthed will be inspected carefully. The tank will be visually inspected for cracks, pinholes and openings of any kind and the surrounding area will be inspected for the visual presence and/or smell of oil.
If the visual inspection of the removed tank reveals the presence of cracks, holes or other openings in the tank, or if oil is seen or smelled at the time of the removal, then under New Jersey law, the findings must be immediately reported to the NJDEP, which will assign the property a case number, and the site must then be further evaluated and remediated as needed, in accordance with governmental regulations.
The NFA letter will describe the environmental findings of the tank removal and how any contamination was cleaned up and remediated, and it will absolve you of future clean-up liability. It is what protects you, as a Buyer, going forward, and the following cannot be understated: you should not close without the NFA letter in hand.
Most tanks cannot be completely pumped of all oil and even a small amount of oil which eventually leaks out can cause environmental contamination and the need for a clean-up. A lot of homeowners left tanks in the ground via proper channels, but the reality is that any tank beneath the ground poses a risk of uncertainty to all future owners of the property until it is properly removed.
Before you buy a home that uses oil heating, you'll want to start with the basics. One of the first things to understand is the various parts of an oil heating system and how they all work together to warm up a home. As you probably know, an oil tank is required for homes that rely on oil heating. This tank offers a space to hold the oil that will be used to heat the system. Many oil tanks are located inside a home, typically on the lowest level, while others can be outside or even buried below the ground.
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