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When buying a house in NJ with an in ground oil tank, must the tank be removed from the ground?

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December 17 2008 - Roselle
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Profile picture for zuser20140530173830241
If I ever wanted to find a reason why I should lease my property & take the profits for 10 yrs then abandon it I'd see what these realtors write. Lets assume EVERY oil tank leaks, because they do. Even when its the company that drips the oil on the side of the tank when exiting its gonna leak. So we're just talking about the worst scenario being the oil has reached the water table and will contaminate wells. In my area there are no potable wells. A total remediation down to the water table so that underground rivers won't get polluted is well 30 yrs too late as most rivers and streams in NJ were polluted back then by industry. But lets say that its rare for contamination to go down that far anyway. Remaining is the ques. "Does the NJ DEPA program to assist the homeowner in cost for leaking oil tank removal program work?"  at www  eda  com .
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3 days ago
Update June 2014, on UST removal. We now have water assessments from sampling wells just for purposes of hopig for a clear report sowe can close on the house under contract. We are in the 2nd year of waiting for a "no further action" from state DEP. One more test of water sample hopefully no oil trace, and we can plan the closing. The lenders and HO insurers hopefully will be satisfied and do business. This was an abandoned and "de-commissioned" tank, town permit obtained. But over time the tank deteriorated, sludge in bottom of tank leaked into soil. Seller cannot sell, buyer cannot obtain loan nor HO insurance. I see the end of this 3 year drama coming to an end after an expense of more than $200,000, covered by an older HO policy- Liberty Mutual. When the sale closes, I will report again. Carl 
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June 16
Profile picture for user8366038
Apprimately, what does it cost to remove an underground oil storage tank?
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February 20
As a licensed oil tank removal contractor in northern NJ my answer is always "YES".  If you ask your local building department or inspector they will tell you that the tank can be abandoned-in-place.  This is true, however, the problem arises when the home is put up for sale.  In today's market most mortgage and insurance companies will not lend money or insure a home with an underground storage tank. Therefore, it is always my company's practice to remove the buried tank and avoid having to do the job twice.

If interested in more information or if you would like a free site evaluation and estimate please [Hotlink removed by Zillow moderator. Please see our Good Neighbor Policy for information.]
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February 07
There is no law that a tank must be removed.  But it will be really difficult to find a buyer that will purchase a house with a tank.  You could also run into issues with insurance and the mortgage.


Feel free to contact us if you have any questions. 
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November 18 2013
Hi, you can have a look on our website for further information:

We do flat rate pricing for soil remediation and oil tank removal.
Best
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October 23 2013
Update on oil tank underground, decommissioned, soil tested and found contaminated. One year later we are looking forward to work being done in order to close. Buyer insisted soil be tested. Had they not, in the future when they want to sell, it mat be even more difficult and expensive to remediate. It is too risky to buy with underground tank, in use now or "decommissioned."  There is no quality control on the process among towns. The sludge in the bottom of the tank may not have been sopped up, and the metal tank eventually rusts away and oil seeps into soil. Now, in 2013, one homeowners insurer is left. Cleaning up the soil is an adventure.  Carl 
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September 08 2013
I assuming a properly has a decommissioned tank. Does the State REQUIRE the tank to be removed. Legally no.   It is however,  financially prudent to do so, whether you are a buyer ir a seller.   Mortgage companies may not lend, insurance companies may not insure.    Even on an an EXISTING oil heated home with an underground tank that has "TANK INSURANCE" , as you delve further you will see the caveats on the tank insurance policy.   .....Things such as "If the seller has brought a gas line into the house, policy can be null and void" even if that gas line was for cooking! We just saw that this July 2013. You can also check the DEP data mining site to see if properties in the area have case numbers or issues.  If purchasing, I would ask that the tank be removed, properly and legally. Honestly I would also test the soil anyway.  Peace of mind is worth the cost.  A home is a big investment.  Protect your asset.  
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July 18 2013
No, but it depends on the location. If the tank was inspected, emptied and filled with sand than in most places it is perfectly safe.

Most of the time appraisal does not find the pipes for the tank so bank does not even knows. It is always up to the buyer as hi is the one that will have to live with it and deal with it at sale.
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July 17 2013
What was true for 2000 is no longer useful today. A buyer may and should in my opinion ask the seller to remove the tank, decommissioned or not. I am in the midst of such a filled UST, so-called approved by Clifton town. The soil was contaminated, the water table or aquafer has oil traces. The lender will not tolerate such a condition, the soil must be removed and replaced and an unknown future time to clear. No home owners insurer will cover, so no lender will lend. Result, the buyer cannot buy nor seller sell this house until all soil and water is dlear. Over $200,000 later, we are still waiting to close after a "no further action" if it ever comes. As of this year, one HO insurer in NJ will insure the home and exclude the tank and liability for it, if the tank remains under ground. 
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July 17 2013
Profile picture for user41536283
There may be no law by the state of New Jersey but individual towns may step in.  For instance we owned a home in Sayreville, NJ and were trying to sell it in 2000.  We were told that the town required that the tank be removed even though the tank had be abandoned by the previous owner in favor of gas.  However at the time the town allowed us to clean, test and fill with foam.  We received the proper certifications from a licensed tank remediation company and we were able to sell the house.  Insurance companies will also put their 2 cents in.  Also, regulations change and what may be okay today will not be when you want to sell.  So, buyers beware seller be prepared.
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July 17 2013
Profile picture for user1882493
I am in the process of buying a home with an oil tank in Fair Lawn, NJ.  As I have read, it must be removed or it will have a bad resale value and may leak in the future.  I also read that some companies will drain a tank but leave some muck at the bottom so as not to ruin their machines.  To make a long story short, it must be removed.
Second issue... the testing to see if it has leaked and if the soil has been contaminated.  I am trying to get the sellers to include this in their removal of the tank.  I was advised that the town inspects the tank, upon removal, to see if it has leaked but I would rather have the sellers do it prior.  
Last issue... the NFA (no further action) letter by the state to confirm that there has been no contamination.  This is supposed to take awhile.  I read that one must have at least 10K in attorney escrow at closing as the letter may not be ready by then.   
Hope this provides some useful info.
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May 15 2013
Asking a seller to remove UST and provide a no further action letter, is not unreasonable. What was true last year may not be true today. HO insurance is disappearing for houses with USTs. What about years from now when trying to sell? I have yet to hear of a situation where the UST in place can be acceptable to a lender, an insuror and therefore a buyer.  
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March 12 2013
Profile picture for user3387484
I recently backed out of an accepted offer on a home in Montclair NJ because the sellers couldn't remove the oil tank. They just got it insured before putting it on the market. The insurance policy requires the tank to be in the ground for at least a year before it can be removed under the policy. I know it was the smart decision but not sure if it was the right one... It is very hard to find an affordable house in Montclair. 
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March 12 2013
Progress on the oil tank, from post below. We closed the transaction on time. The Tank was removed after a 3 week wait for the town to issue a permit. The removal compnay was very efficient, using the adjacent property, with permission, to minimize the damage to the lawn. When all done, you could not tell it was done. In this case the buyer asked for removal and replacement with a gas furnace. McCormack Plumbing and Heating, the best contractor was very helpful and timely. Each situation is its own unique case. One should approach the tank removal question with all the facts and options known. Call me if for any questions at all. 973 632-8593. Carl Ben Witzig- Montclair
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April 16 2012
Profile picture for sunnyview
Hooray a 2008 thread! Can try for a 2007 next? I believe in you.
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December 07 2011

as long as it is has not be damaged in anyway or shows signs of leakage, tanks do not have to be removed. tanks no longer in use can be filled with sand

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December 07 2011
I am in the midst of a transaction right now. As it progresses, I will post the results. For now, the tank is 2 yrs old under ground. A test 2 yrs ago was negative for contamination. As we pursue an FHA mortgage and seek HO insurance, I will report. Internet info so far indicates, lenders will want tersts, possible removal, insurors are few and exclude liability for oil leak damage, tank insurance limits coverage to the tank not the soil if leaks occur. Costs will be dertermined for each option: remove to above ground-basement; convert to gas before removal (winter time needs heat). 

Another transaction, a listing, with a very old UST I will report on how it will effect selling the house? 
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December 01 2011
You've gotten many answers, the legal answer is no it does not have to be removed. If you were my seller or buyer, I'd advise you to take it out of the ground entirely. There are companies who specialize in this, soil tests need to be done to make sure there are no leaks. Where I live this question comes up a few times a month and I know of many cases where it is not such a large issue if addressed.
If I can be of any further assistance, don't hesitate to reach out!
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April 09 2009
The direct answer to the question of "must it be removed" is no.
HOWEVER when considering a home with an in-ground oil tank you MUST be very, very cautious.  Yes, many may have "tank insurance" but check the coverage carefully, very carefully.  The best idea is to have the seller remove it and have the soil tested as mentioned. It's not only the best idea it's the smart idea. The next thing is a "hurry up and wait" scenario for a "No Further Action" letter from the DEP.  This letter should be a requirement prior to closing and part of the attorney review process. The DEP will quote an 8 month turn-around on the NFA letter.  However, persistence and letting them know immediately that the lack of the letter is holding up a closing and escalating as high as you can can cut that time down to a manageable timeframe. Sound like I've been there....YUP.
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April 08 2009
Profile picture for gr14
THANKS!  I was wondering why all the listings that had underground tanks had made a big deal about them.  My thought with oil heating was perhaps converting to an biodiesel in the future.  but I guess i will scratch them off my list.
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March 28 2009
Profile picture for tummytuckone
We had an oil tank removed from the ground in NJ in 2006. There were several regulations but it wasn't that bad. It was my father's house and we were able to make all the arrangements from out of state with very little hassle. It was a working tank and my father had insurance on the tank. The insurance company basically made all the plans with the person we contracted to remove the tank. They also coordinated everything with the state environmental agency. They also arranged for all the necessary permits. The day the tank was removed a representative from the insurance company and a representative from the environmental agency were present. The testing was completed right away on site. The entire process at the site was less than 2 hours.
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March 27 2009
Profile picture for Mark75NYC
Never buy a house with an underground oil tank -- insist that the sellers have it removed before you take posession of the house at closing.  And when it's removed, you must have the soil tested to determine if there has been any environmental contamination.

Contaminated soil from a leaking oil tank is potentially a six-figure nightmare to clean up, and it will NOT be covered by your homeowners insurance.  And you become responsible for the cost the moment you own the property.  Do not take posession of buy a home with a ticking time bomb of an underground oil tank (whether's it's been officially "abandoned" or not).  Anyone who tells you anything else ... ask them to insure you in case you end up having to pay a 200K soil decontamination bill!

Underground oil tanks = bad news.
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March 27 2009
This is a GREAT question and one that needs to be addressed!  For all intense and purposes the State of NJ wants those oil tanks pulled or property abandoned.  Leaking underground tanks contaminate the surrounding areas and can cost quite a bit of money for the clean up. Contrary to popular belief the older tanks hold up much better than the tanks that were manufactured in the 60s and 70s.  These are the ones that tend to fail.  When I go into a home to put it on the market and they tell me that there is an underground oil tank the first thing I tell them to do is GET IT OUT OF THE GROUND.   The area that I work in has a majority of homes heated by oil and I have made it standard practice to have the tanks REMOVED prior to placing on the market. That way there are no suprises.  In addition if you are looking at a property where the oil tank was removed or abandoned and paperwork is provided that is great but NOT the end of the story.  It is also in your best interest to go to the township and make sure all permits were pulled and CLOSED prior to obtaining ownership in accordance with the law.  I truly hope that this helps!  Thanks again for the question, it is one that I tackle alot in South Jersey!  Best Regards, Nancy Casey 
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March 26 2009
Will need more information to answer the question. It depends if the tank is in use, abandoned, etc. It may be a situation where it does not have to be done, but it may be the best thing to do.
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January 25 2009
There are very few lenders who will allow that oil tank to stay in the ground...and even fewer insurance companies that allow it! If it is still in use, and passes standard tests, you may find a lender and insurer...not easily!
The state has VERY standard procedures that involve oversight by the individual municipality.  Hire a licensed and bonded company for removal.  And yes, there is a state program to help defray the cost.
You can call the local municipality for a recommendation for a reliable company.  If you are in South Jersey, I can tell you who I have used successfully.

Good Luck!
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January 21 2009
Is this a working oil tank or has the property switched to gas? At any rate, the laws are different for every town, my suggestion is to check with the town to see what their laws require.

In some towns an oil tank can be decomissioned by emptying and removing the top of the tank and filling it with sand, of course the soil around it has to be tested for leakage (soil contamination). Other towns are stricter and will test the soil and have you phisically remove the tank from the ground.

There are also State programs that will defray some of the cost's of removal, again it varies, so check with the State also.
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December 22 2008
 
Related Questions
When buying a house in NJ with an in ground oil tank, must the tank be removed from the ground?
Profile picture for zuser20140530173830241
Latest answer by zuser20140530173830241
3 days ago | 27 answers
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