Rajan Wilcox
Underground liquid fuel tanks, also known as underground storage tanks (USTs), are allowed in New Jersey, but they pose serious environmental and financial risks due to the potential for leaks. While homeowners are not legally obligated to remove USTs before selling their property, most insurance companies do not provide coverage for them, and banks often require their removal before providing a mortgage. Buyers are advised to perform due diligence by hiring professionals to inspect for USTs and take steps to evaluate the tank and system if one is present.
| Characteristics | Values |
|---|---|
| Allowed? | Underground liquid fuel tanks are not illegal in New Jersey. |
| Insurance coverage | Most insurance companies in New Jersey do not provide coverage for underground oil tanks. |
| Removal cost | The cost of removing an underground oil tank depends on the situation and the work involved. ERC Environmental charges a flat rate of $1,750. |
| Wait time for DEP applications | There is currently a 3.5-year wait for all DEP applications for The Petroleum Underground Storage Tank Remediation, Upgrade and Closure Fund (UST Fund). |
| Responsibility for removal | Homeowners with an underground oil tank on their premises are not legally obligated to remove it before selling, but it is in their best interest to do so as the home will become unsellable. |
| Inspection | Buyers should perform their own due diligence in checking for the presence of an underground oil tank and should not rely solely on the seller's previous inspection records. |
| Signs of an underground oil tank | Vents, filler pipes, oil lines in the foundation wall, depressions in the yard, patchwork indicating removed lines or piping, dead grass or landscaping caused by spillage. |
| Tank sweep | A tank sweep involves using metal detectors and ground-penetrating radar to detect the presence of a buried oil tank. |
| Additional tests | Heightened metal detection equipment and ground-penetrating radar can help determine the size and shape of a buried object and whether it is an underground oil storage tank. |
| Exploratory dig | A contractor will dig out the area in question by hand to locate and identify a metallic object detected during a tank sweep. |
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What You'll Learn
- Underground liquid fuel tanks are an environmental and financial liability
- Buyers should perform due diligence and hire a professional to check for underground tanks
- Sellers are not legally required to remove underground tanks before selling
- Buyers should review the seller's heating bills to understand costs and identify leaks
- Vent pipes, fuel lines, and filler pipes are signs of an underground oil tank
Underground liquid fuel tanks are an environmental and financial liability
Underground liquid fuel tanks pose a serious environmental threat and financial liability. In the past, filling an oil tank with sand or other fillers and abandoning it was considered acceptable. However, there is still a risk of contamination, and many banks now require the complete removal of oil tanks before providing a mortgage. Insurance companies are also reluctant to provide coverage for underground oil tanks due to the high costs associated with potential leaks.
The greatest potential hazard from a leaking underground storage tank (UST) is the seepage of petroleum or other hazardous substances into the soil, which can contaminate groundwater—the source of drinking water for nearly half of the US population. Leaking USTs can also cause other health and environmental risks, including fire and explosion. Fumes and vapors can travel underground and collect in enclosed spaces, posing a serious threat of explosion, fire, asphyxiation, and other adverse health effects. Groundwater pollution is a critical issue, and many municipal and private wells have been shut down due to contamination from UST releases.
To address the nationwide problem of leaking USTs, Congress passed laws to protect human health and the environment, including the Solid Waste Disposal Act and its amendments. These laws established federal programs to regulate USTs, minimize leaks, and set technical standards for tank design, installation, and leak detection. The Environmental Protection Agency (EPA) has also implemented financial responsibility regulations to ensure that UST owners and operators can cover the costs of cleanup and compensate third parties in the event of a leak or spill.
In the context of New Jersey, while homeowners are not legally obligated to remove underground oil tanks before selling their property, it is essential to negotiate this process properly. In most cases, the seller will pay most or all of the cost of oil tank removal as part of the closing agreement. Additionally, a No Further Action (NFA) letter from the New Jersey Department of Environmental Protection (NJDEP) is typically required by lenders and insurers after oil tank removal or soil remediation. It is also worth noting that underground oil tanks may not always be known to homeowners, so it is crucial for buyers to conduct their own inspections or hire professionals to perform a tank sweep to ensure the detection of any buried oil tanks.
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Buyers should perform due diligence and hire a professional to check for underground tanks
When buying a property, it is important to conduct due diligence and hire professionals to check for underground liquid fuel tanks. Underground storage tanks (USTs) can pose significant environmental, health, and financial risks if not properly managed. Here are some reasons why buyers should perform due diligence and hire professionals to check for USTs:
Environmental and Health Risks
USTs can pose serious environmental and health hazards if they leak or release hazardous substances into the soil and groundwater. These tanks are often used to store hazardous materials such as gasoline, diesel fuel, and chemicals. As such, it is crucial to identify the presence of any USTs and assess their condition to mitigate potential environmental and health risks.
Financial Liabilities and Insurance Coverage
USTs can also result in substantial financial liabilities for buyers. In the event of a leak or spill, buyers may be responsible for costly cleanup operations and remediation efforts. Additionally, insurance coverage for UST-related risks, such as leaks and environmental cleanup, may be limited or excluded from standard policies. Buyers should carefully review their insurance coverage to understand their potential financial exposure.
Regulatory Compliance
USTs are subject to various federal and state regulations, including the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). These regulations mandate that UST owners and operators register their tanks, conduct routine inspections, and maintain proper records. Non-compliance with these regulations can lead to significant fines and penalties. Buyers should ensure they understand and can comply with the applicable regulatory requirements.
Professional Inspections and Assessments
Hiring qualified environmental consultants or inspectors is essential for assessing the condition, integrity, and compliance of USTs with relevant regulations. These professionals utilise specialised tools, such as metal detectors and ground-penetrating radar, to detect buried tanks accurately. Their expertise enables buyers to make well-informed decisions, providing valuable insights into potential risks and liabilities associated with UST ownership.
In conclusion, buyers should conduct thorough due diligence and engage the services of professionals to check for underground liquid fuel tanks. By doing so, buyers can identify potential environmental, health, and financial risks associated with USTs, ensure regulatory compliance, and make more informed purchasing decisions.
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Sellers are not legally required to remove underground tanks before selling
In New Jersey, sellers are not legally required to remove underground oil tanks before selling a property. However, this poses a serious environmental threat and financial liability. Buyers are often hesitant to purchase a property with an underground oil tank due to the potential risks and costs associated with tank leaks and soil contamination. Most insurance companies in New Jersey do not provide coverage for underground oil tanks, and lenders may be hesitant to provide mortgages for properties with these tanks.
It is crucial for buyers to conduct their own due diligence and hire professionals to perform a tank sweep to ensure the detection of any buried oil tanks. If an underground oil tank is discovered on a property, buyers can negotiate with the seller by evaluating cleanup costs, sharing assessment results, adjusting the purchase price, and including contingencies in the contract. Environmental contractors can provide estimates for tank removal, soil testing, and remediation, which can be used as a negotiating point with the seller.
While sellers may choose to remove the tank before selling, they can also opt to fill and abandon the tank in place. Proper abandonment requires obtaining permits, conducting inspections, and ensuring there are no leaks. However, even properly abandoned tanks may still pose a risk of contamination. Buyers should be cautious when purchasing a property with an abandoned tank and may require additional testing and documentation to ensure no contamination has occurred.
The presence of an underground oil tank can significantly impact the sale of a property. Buyers may walk away from the deal or request the seller to remove and test the tank as a condition of the purchase. In some cases, buyers may agree to share the cost of tank removal or pay for it themselves. Ultimately, the decision to remove the tank rests with the seller, and buyers should carefully consider the potential risks and costs associated with underground oil tanks before finalizing the purchase.
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Buyers should review the seller's heating bills to understand costs and identify leaks
Underground liquid fuel tanks, or USTs, are allowed in New Jersey, but they pose a serious environmental threat and financial liability. Homeowners are not obligated to remove them before selling a property, but buyers should be cautious as most insurance companies in the state will not provide coverage for an underground oil tank. It is important for buyers to conduct their own due diligence in checking for the presence of an underground oil tank, as sellers may not be aware of one on their property or may not disclose it.
When purchasing a home, it is crucial for buyers to review the seller's heating bills to understand the costs associated with the property and to identify any potential issues, such as leaks. Heating bills can provide valuable insights into the energy efficiency of the home and the condition of the heating system. For example, unusually high heating bills could indicate that the system is not functioning optimally or that there may be a leak somewhere in the system.
By reviewing the heating bills, buyers can identify any discrepancies or unexpected increases in costs. This information can then be used to negotiate a lower purchase price or request that the seller address the issues before the sale is finalized. It is important to note that while a seller may claim that a system is working fine, the buyer has the right to request repairs or replacements, especially if the systems are at the end of their lifespan.
In addition to reviewing heating bills, buyers should also consider hiring professionals to perform a tank sweep to detect the presence of any underground oil tanks. This can help identify potential environmental hazards and financial liabilities associated with the property. If an underground oil tank is discovered, buyers should be prepared to negotiate the removal or remediation of the tank with the seller as part of the closing agreement.
Furthermore, buyers should be aware that insurance companies and banks may have specific requirements regarding underground oil tanks. Some banks may refuse to provide a mortgage if the tank is not removed, and insurance companies may deny coverage or provide limited coverage that may not be sufficient in the event of a leak. Therefore, reviewing heating bills and conducting thorough inspections are crucial steps in the home-buying process to protect the buyer's interests and ensure a smooth transaction.
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Vent pipes, fuel lines, and filler pipes are signs of an underground oil tank
Underground oil tanks (USTs) pose serious environmental and financial risks, and while they are not illegal in New Jersey, most insurance companies will not cover them. Homeowners are not legally required to remove USTs before selling their homes, but many banks now require their removal before providing a mortgage. This means that, as a buyer, it is important to check for the presence of an underground oil tank.
One way to do this is to look out for vent pipes, fuel lines, and filler pipes. Vent pipes are usually found on the outside of homes, and have a small cap or, in rare cases, an upside-down 'J' bend. They are typically 1.5" in diameter, and are connected to the siding with one set of staples. Vent pipes provide ventilation for underground tanks, and can be found both indoors and outdoors. Indoor vent pipes will stick out of the basement floor, while outdoor vent pipes are usually located within 6 to 12 inches of the home, and are about 2 inches wide.
Filler pipes are another sign of an underground oil tank. These can also be found both indoors and outdoors. Indoor filler valves typically look like a pipe sticking out of the floor, while outdoor filler valves are usually located within a 10- to 12-foot radius of the home, and situated a few inches above the ground.
Fuel lines are a third sign to look out for. These may be copper pipes that appear to have been pinched or closed off, and can be found sticking out of the basement wall or the ground.
If you notice any of these signs, it is recommended to contact a licensed environmental remediation professional to safely deal with the underground oil tank and evaluate the area for potential contamination.
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Frequently asked questions
Underground liquid fuel tanks are not explicitly prohibited in New Jersey, but they pose serious environmental and financial risks.
Underground oil tanks (USTs) pose a serious environmental threat and financial liability. Most insurance companies in New Jersey will not provide coverage for an underground oil tank, and those that do usually offer a level of coverage far below the realistic cost of an oil tank leak.
If you discover an abandoned underground liquid fuel tank on your property, it is recommended to hire professionals to perform a tank sweep to ensure its presence is confirmed. You can then decide to either fill it with sand or other fillers or have it removed.
The first step is to hire a licensed contractor to perform a tank sweep as part of your inspections. This will involve using metal detection equipment and making other visual observations to determine the presence of a UST. If a UST is found, the seller will almost always agree to remove it, as it is in their best interest to do so.
The cost of removing an underground liquid fuel tank in New Jersey can vary depending on the situation and the work involved. Some companies that provide oil tank removal services may not disclose the cost upfront, and you may end up paying far more than expected. It is recommended to obtain multiple quotes and be cautious of open-ended contracts.
