Legal Issues Regarding Buried Oil Storage Tanks
Bulk Oil Storage Tanks

Reporting requirements for oil tanks based on capacity
Test tanks before purchasing a home
Remove or abandon buried tanks
Replace tanks with double-walled or above-ground units
Questions & Answers about legal issues concerning buried and large heating oil storage tanks
References

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This article discusses the legal issues associated with buried oil storage tanks - underground tank or UST laws. This proceedings of this oil tank inspection educational meeting addresses legal issues associated with buried oil tanks, also referred to as underground storage tanks or USTs. The information was first presented at the New York Metro ASHI (American Society of Home Inspectors) Chapter Education Session June 1994, reported by Daniel Friedman, and updated through March 2009.

Buried Oil Storage Tanks (UST) Legal Issues

- Kimberlea Shaw Rea, of Bleakley, Platt, and Schmidt

Over the past few years, the problems associated with buried oil tanks have received increased attention. A leaking tank can contaminate soil, ground water, and drinking water supplies.

At the June meeting New York Metro ASHI meeting, attorney Kimberlea Shaw Rea, of Bleakley, Platt, and Schmidt, discussed some legal issues of petroleum bulk storage tanks. The liability associated with leaking residential or commercial tanks can be enormous. Ms. Rea indicated that some leaking tanks have affected dozens of families.

Properties with total storage of 1,100 gallons or more now require registration with the New York State Department of Environmental Conservation (DEC). Interestingly, condominiums with several small tanks installed on the same property would probably meet this cumulative 1,100 gallon limit.

Properties with 1,100 gallons or more of cumulative storage must meet certain DEC requirements which typically include tank tightness testing every five years. New tanks (1,100 gallons or more) must meet DEC requirements for corrosion prevention, spill prevention, and leak detection.

Properties with a cumulative storage capacity of less than 1,100 gallons typically do not fall under DEC regulations unless there is a leak. If oil or petroleum storage leakage is observed, the leak must be reported to the DEC within two hours of the observation. The DEC spill hot line number is 800-457-7362. Ms. Rea indicated that it is unlawful to fail to report a leak. © 2010 Daniel Friedman copyright trap.

Before purchasing a home, Ms. Rea strongly recommended that buried tanks be tested. Once a property is purchased, the liability for a leaking tank becomes the responsibility of the new owner. Testing for a residential tank typically costs about $500.

Ideally, buried tanks should be removed or properly abandoned in place. They should be replaced with a double-walled or above-ground tank. Periodic tank testing for a small, buried residential tank is typically less cost effective than tank relocation.

Although leak testing of oil tanks is beyond the scope of a professional ASHI home inspection, NY Metro ASHI conducts monthly educational seminars on various issues of concern to home owners and inspectors.

If you are buying a home and would like more information about home inspections, you can contact your local home inspector, or an oil-tank testing company.

ASHI, the American Society of Home Inspectors, is the national certifying association for professional home inspectors. ASHI is a not-for profit association dedicated to home inspector education and professionalism. The local chapter, NY Metro ASHI, Inc., meets monthly for an educational meeting, and sponsors periodic inspection seminars.

Frequently Asked Questions (FAQs) about legal issues surrounding buried oil storage tanks

Question: can a home be sold if it has a buried oil storage tank?

can you coney ownership of a home with leaking oil tank - Joey 10/5/2012

I was sold a property with a underground tank a few years ago and was not informed of this issue. Can I turn the home back over to the company I purchased it from? - Donnie Townsend 3/13/2013

We just had an inspection for the home that we want to buy. There is reason to believe that there may still br an undergrounf oil tank that is no longer in use. Our real estste agent is trying to find out. My question is-is it legak to sell a house with an old underground oil tank in Covenrry Cy? - Carolione 3/31/2013

Reply:

Joey:

Can, perhaps if there is no nor attorney or bank monitoring the sale, but if you are the seller, you shouldn't do so as you are asking for a lawsuit when the buyer finds out the cost to cure the problem.

Donnie,

Unfortunately in real estate, the responsibility is on the BUYER to perform all due-diligence inspections and tests prior to the purchase of a property. Unless you can show that you relied on fraudulent information provided by the seller AND that it was reasonable for you to have relied on that information, I'm doubtful that you will get anywhere with this problem - but the proper approach is for you to consult an attorney who is familiar with real estate as well as environmental law.

In most states there are laws requiring a seller to disclose substantive defects known to the seller. However in most states it is also possible for a seller to simply sign a document saying in effect "I don't know anything and I am not disclosing anything" for which the seller also gives the buyer a (usually modest) allowance. In effect the seller pays a few hundred dollars to be excused from disclosing anything.

That's why you hire an expert attorney, one who is working for you, when buying a property.

Let us know what your attorney says - it may help other readers.

Caroline,

I don't have specific information about your county (you don't even mention the nearest city or state, so ...) that's a question for your attorney.

But my OPINION is that I'd be very very surprised if it were "illegal" to sell a property with an abandoned oil storage tank.

More useful might be these points:

It will be "illegal" just about anywhere in North America to fail to report an oil storage tank leak to the EPA or equivalent in Canada.
Oil storage tank leaks are required to be properly cleaned-up by federal regulations and possibly state regulations as well
A stumbling block for a buyer of a property with a buried oil storage tank whose status is unknown might be that the lender may refuse a mortgage until any quesitons are resolved
A home buyer who fails to have such a property surveyed and if appropriate, tested, would be taking a risk that could end up being expensive.
Unless the seller provides reliable, complete documentation that a buried tank no longer in use has been proiperly abandoned you would not be performing due diligence as a buyer if you did not obtain appropriate site inspections and tests.
Even if a buried oil tank is still in use, having appropriate inspections and leak tests would be prudent before buying a property.
Some oil spills, such as on the ground during oil tank fill-up, may be trivial to clean up. But a buried tank that leaked into the soil, or that leaked into the soil feeding oil beneath a building foundation (as I encountered in one case) could be extremely costly to clean-up.

Be sure to read these articles

More on laws about oil tanks is at OIL TANK CODES & STANDARDS

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