JEANNE REARDON - Attorney at Law
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Real Estate Law Blog

Home Buyers: Beware of Underground Oil Tanks

Whether buying a single-family or multi-family home, the prospective homeowner must carefully review the property and perform the necessary due diligence before buying to ensure there are no buried and leaking underground oil tanks on the property. 

A buried and leaking underground oil tank brings with it immense liability and very often a large cleanup bill for the homeowner. Homeowners are responsible for leaking oil tanks on their property, and the Navigation Law, § 181(1), imposes strict liability (i.e., without regard to fault), against any person "who has discharged petroleum."  The real danger to the homeowner, however, is the cleanup costs which can be in the tens of thousands of dollars and can grow much larger if there is active groundwater contamination. Moreover, these costs are typically not covered by most homeowners’ insurance policies.  The lesson here for prospective homeowners is to be sure to search for evidence of an underground oil tank prior to purchasing the property.

Here are some investigative tips to follow:

Tip 1:  Ask The Seller.  Even if the property is currently heated by gas, or there is an above-ground oil tank in the basement, ask your seller if they ever replaced or abandoned a buried oil tank on the premises. The answer to this question will help in your investigation.  If the seller divulges that there is an abandoned tank, ask for documentation to confirm that it was properly abandoned in compliance with local codes.

Tip 2:  Look For Evidence.  Start near the boiler servicing the house and look to see if there are any old indentations or rust marks or traces of a boiler with a larger footprint.  This could be evidence that an old, large oil boiler was once there.  Also look around the walls of the basement to see if there are any lines (small tubing) that disappear into the walls.  These would be the oil lines to the buried tank outside.  They may be crimped just inside the basement wall.  If you see them, do not panic.  Some oil lines are left in place even after tanks are removed but if you see them it should prompt you to take the next step.  You should also be on the lookout for cemented patches in the basement floor where the floor was notched in order to lay the oil lines from the boiler to the wall.  Also look outside along your foundation for an abandoned oil tank vent pipe which will be coming up from the ground close to the foundation wall.  Often hiring a home inspector can help with this investigative process

Tip 3:  Hire An Experienced Attorney. Consult with a knowledgeable and experienced real estate attorney, who can advise you on the issues and the proper course of action to be taken in regards to buried oil tanks and contamination prior to entering the contract of sale.