by James Stefanile, ABR, GRI, SRES, QSC, REALTOR/Associate, Prudential NJ Properties
Underground storage tanks (commonly referred to as USTs) were not meant to last forever. 30 or 40 or 50 years ago the knowledge and technology was certainly not in place to insure extreme long term use. Fiberglass tanks, double walled tanks with alarms and other present day technologies were un-heard of. The typical buried oil tank is 550 gallons but I have encountered 1,000 oil tanks, small kerosene tanks, 200 gallon gasoline tanks and all manner of abandoned and unknown underground tanks.
You may have an oil tank that’s “on-line”, in other words, in use, providing fuel to heat your home. You may also have an abandoned oil tank you may not be aware of. If you’ve owned your home for a long time and it’s heated by gas that doesn’t mean there isn’t an abandoned tank lurking under your lawn or driveway. Many tanks were simply abandoned without de-commissioning (that is, the tank is drained, cut and filled with inert material and left in place underground) as little as 15 years ago when enviornmental attitudes were different than today. As little as 10 years ago the idea of testing for an unknown UST was much less prevalent than today, so the house you bought as recently as 10 years ago could be hiding an underground surprise.
This post is not only aimed at the unknown tank but a few words more…
If you’re not sure about the presence of an unknown UST, look in your basement, start near your present boiler. Look on the floor. Do you see an old indentation 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 other parts of the basement. The old boiler could have been somewhere else in the room. Next look around the walls of the basement. Start near the current boiler. You’re looking for small tubes that disappear into the walls, maybe 1/2″ in diameter. These would be the oil lines to the buried tank outside. They may be crimped just inside the basement wall. If you see them, don’t 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. It’s an approximately 1″ pipe with a mushroom-looking cap which will be coming up from the ground close to the foundation wall. Lastly, check with your township’s building department or code enforcement department to see if any permits were ever taken on your property to remove or de-commission an oil tank.
What would be the next step if you’re still unsure? Call a company who can do a tank search on your property. They will do the kind of basement inspection I’ve described and will use metal detecting equipment to search outside around your property. I know a number of vendors and can recommend good ones. I’ve seen them in action a number of times and they are most often accurate, one way or the other. It’s not tremendously expensive and it’s standard procedure for buyers today (at the buyer’s expense) so you can bet your future buyer will be performing this test. If you’re thinking of selling your home it will be better if you find the unknown tank before your future buyer does.
If you didn’t know the tank was there, you won’t have insurance for its removal. It will cost approximately between $1,500 and $2,000 to remove a non-leaking 550 gallon tank. If there are signs of a discharge when the tank is removed, then the DEP has to be involved and that’s another process. It isn’t as scary as it sounds. I’ve been involved with a number of leaking tanks, known or unknown, and all those homeowners lived to tell the tale.
Let’s now concentrate on the homeowner who wants to be pro-active. You know you have a UST that supplies oil fuel to your boiler. You have no suspicion of a problem but you also know the tank’s been there for a long time and you can’t certify its condition. Should you replace it with a newer technology/underground or above ground tank? You can have your tank tested with what’s known as vacuum test or with what’s commonly referred to as an electronic probe test (a sonar test). This will give you a pretty accurate indication of any failures or discharges in the tank. I know the good vendors for these tests, also. That test report, if negative for leaks, will also be powerful proof to any prospective buyer that there isn’t a problem. That buyer may, however, want to perform their own test, at their expense, or may insist on an old tank’s removal regardless of its condition. In 2010 this is, after all, a buyer’s market.
If you want to be even more pro-active and environmentally smart, believe it or not, the State of New Jersey is there to help you. The state government in its wisdom (no, really) has set aside 90 million dollars for a re-imbursement program for homeowners who want to replace an aging, in use (not abandoned), oil tank used to heat their home. The main objective is the environmental soundness of residential USTs.
The Petroleum Underground Storage Tank Upgrade Remediation and Closure Fund was first established in 1997, but only applied to tanks that leaked. Money for the fund, administered jointly by the New Jersey Economic Development Authority (NJEDA) and the New Jersey Department of Environmental Protection (NJDEP), comes from corporation taxes levied by the state.
On August 2, 2006, then-Governor John Corzine signed legislation that enacted important changes to the fund. The change gives a homeowner the power to be pro-active. You can now apply for a grant to upgrade a tank BEFORE it leaks.
If you’re ready to upgrade your old underground tank and apply for reimbursement from the state, you have two good options:
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Replace an underground tank with a fiberglass or new corrosion-protected, cathodically protected underground tank. With today’s technology, a new tank can be isolated from the ground, making it more worry free.
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Replace a buried tank with an aboveground tank. These tanks are normally smaller (275 or 330 gallons) and can be customized for hard-to-fit spaces. Above ground tanks can be installed inside or outside the home. An outside tank can even be hidden in a tank enclosure.
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The largest available grant provides a New Jersey residential homeowner with $3,500 or more to upgrade a non-leaking underground storage tank (UST) in a primary residence. You can apply for this grant by checking the appropriate box on the Residential Non-Leaking Underground Storage Tank cover application which is available at www.newtanksnj.org.
The vast majority of New Jersey residents are eligible. There are three main criteria for qualifying.
| 1. You must have a federal taxable income of LESS than $250,000. | |
| 2. Your net worth must be less than $500,000 (excluding your primary residence and pension). | |
| 3. You need to demonstrate that repaying a loan would be a financial burden. (The NJEDA has a very liberal test to determine what is a hardship.) |
A $250 application fee is required and should be sent with your cover application and accompanying documentation. The existing tank needs to be in-use at your primary residence. Your homeowner’s insurance will not cover these costs but you should file a claim and show the rejection of the claim along with your other documentation.
This is a re-imbursement program so you don’t wait for the money to do the work. You choose a contractor who is certified by the DEP (your local oil provider can help with this selection – and, by the way, so can I). Once the work is completed with the proper documentation and proof of payment, you will apply for the grant to cover the cost of the upgrade. The state says you will receive your check within 6-8 weeks. I have had clients who’ve taken advantage of this program and have not heard of any problems so far. All appropriate information and forms to download are located at www.newtanksnj.org and it’s good reading for anyone with a buried tank.
So, what if you dig up your tank and it’s discovered to be leaking? As stated before, the DEP must be involved and further remediation will be required, depending on the kind and amount of discharge. You would then apply to the The Petroleum Underground Storage Tank Upgrade Remediation and Closure Fund which, as we discussed, was first established in 1997 to assist homeowners with a leaking tank. The information for that is also available at www.newtanksnj.com or by Googling the name of the program. The remediation reimbursement program is retroactive back to 1997. So if you or someone you know have long since paid out funds for remediation, you can apply for reimbursement today.
This re-imbursement fund is not forever. When the 90 million dollars is gone, so is the program. So far, it’s estimated the State, as of this date, has disbursed approximately 20 million dollars of the fund.
No one likes to think about these kinds of issues. It’s not unusual for homeowners to want to avoid this whole process. The reality is, the tank is there, it may be leaking and it may not be. It is what it is and it’s an advantage to be pro-active rather than re-active to a buyer’s demands. If there’s a tank with a problem, chances are your future buyer will find it and identify the problem. Buyers not only sweep for unknown tanks, they test known, on-line tanks for leaks. If the tank has been replaced before that happens, there is no issue and you are one step closer to closing your real estate transaction. Even more importantly, you are secure in the knowledge that the oil tank servicing your heating needs is the safest, most modern and beneficial for you and your family while you live in your home.
I’m sure you have many questions regarding these matters. Send me a comment to this post with your concerns and I’ll be glad to discuss any of these issues in further detail.
A Real Estate Blog by Jim Stefanile 