On May 2, 10:36�am, dpb wrote:
frank1492 wrote:
A friend is trying to sell her house. The house has an old steel tank
(15 years) that is not leaking.
� � Prospective buyers that come to the house say they were told a
bank won't approve a mortgage and/or they can't get homeowners'
insurance with the underground tank. This is in RI.
� � The person is considering removing the tank and replacing it with
an above ground tank, but this will require rerouting of the line,
tearing up the driveway etc. I say the issue is not the underground
tank per se but the fact that it is so old �and that she should
replace it with an underground fiberglass tank. She could then show
the buyer, the bank and the insurance co the bill of sale and the
warrranty.
� � In your experience have you ever heard of mortgage/insurance co
problems if it can be proven that the underground tank is new and
non-corrosive?
� �Thank you.
� � � � Frank

I'd say that 15 years is not particularly old, first off...

Since probably half or more of RI residential heat is oil, it's hard to
imagine there are not thousands of insured underground tanks and will be
for years to come.

I'd suggest first contacting the local entity in charge of building
occupancy permitting and residential real estate transfer regulations
for the jurisdiction and see what actual requirements are, followed by
contacting State offices if there are still uncertainties.

As someone else says, actually talking w/ the insurance underwriter (the
house currently is insured, surely?) as well as a few
brokers/underwriters/lenders should determine the lay of the land locally..

Remember, in most places a real estate broker even if hired by you to
"list" the house may _NOT_ be actually on your side in the transaction
but working for the potential buyers. �The actual requirements in RI
will be spelled out in the contractual legalese; be sure to first ask
and then double-check what the actual requirements on the representative
the friend has are. �Although many look at it as unnecessary expense, I
would advise legal representation to cover the bases as mandatory for
any transaction of such size, particularly when there's any chance of
some later claim for damages/remediation possible.

After the information-gathering, then it's a choice of whether to hold
out for what is probably (if I had to guess) the stand that if the tank
is inspected and shown in good shape there's no legal basis for
requiring anything else/more and buyer can either accept or find another
house to buy or abject capitulation to "whatever the buyer wants, buyer
gets".

Then, of course, there's always the counter-offer of "split the
difference witcha', ok?"

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Underground tanks are a HUGE ISSUE. Insurance is risk adverse.
espically when dealing with a possible risk that can cost 100,000s of
dollars

if a tank leaks it can contaminate the aquifier and ruin water wells
for miles.

just like knob and tube wiring, insurance as gotten really picky


most insurance companies dont hassle existing owners with existing
policies, they are often grandfathered in.

but ownership change makes new owner get new insurance, thats either
very expensive or completely unaffordable or often not available at all