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Buried Oil Tanks

A leaking buried oil tank is the single most expensive problem that a homeowner can have.

Most homes with oil-fired heating systems usually have an approximately 275 gallon fuel storage tank. This tank takes up space in the basement; some owners prefer gas because they don't like the sight (or smell) of an oil tank in their home. In the past, many owners, happy with oil, were convinced that getting the tank out of the basement would gain them some space and save them some money. Consequently, for years, a buried exterior 1000 gallon tank was considered a great feature- the homeowner would buy oil once during the summer when fuel prices were at their lowest and then laugh through the winter as oil trucks struggled through ice and snow with fuel for which their tankless neighbors were paying premium prices.

Nowadays, as states, cities and towns deal with contaminated drinking water supplies and the serious possible environmental consequences of contaminated soil, old, buried oil tanks have become a significant liability. Installations have been banned in some locales and removal of all residential tanks required in others.

All home inspectors exclude determining the presence of non-visible items such as buried oil tanks, so how can you tell if there is or was a buried tank on a property? The local fire department requires that anyone storing fuel obtain a fuel storage permit. If you are making an offer on a property, stop at the local fire department to check if there is an underground fuel storage permit on file. Records generally go back for decades, though they may not always be accurate. If there is an underground tank, you should insist that the seller, prior to purchase, have the tank professionally removed, along with contaminated soil, if any. For your eventual sale, be sure to obtain all the paperwork, approvals, etc. from the government agencies involved.

Usually, the seller pays to remove the buried tank and replace it with a basement one, but I know of one case in which the buyer agreed to reimburse the seller (at the closing) for the tank removal. The buyer wisely insisted in the purchase and sale that the seller take responsibility for disposal of any contaminated soil. On average, about one out of 200 buried oil tanks has leaked, though in one suburban community almost half the tanks removed have leaked oil.

Oil leaks from basement tanks or other heating equipment can also be a problem, and there are signs to watch out for. If you detect a strong fuel odor in a house, this may be a sign of a problem; the oil service company should check for leaks. Although the interior of an oil tank is inaccessible (and excluded from a home inspection), a good home inspector will observe the bottom of an oil tank with a mirror to see if rust holes are present, as standing water inside the tank can rust out the bottom. The concrete floor around the oil tank, fuel line and burner should be observed for circular stains, indicative of leaks.


By J. May

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