DIYbanter - View Single Post - Regulations Governing Underground Home Heating Oil Tanks

George

On 5/2/2010 10:02 AM, wrote:
On Sun, 2 May 2010 06:57:46 -0700 (PDT), wrote:

On May 1, 11:45 pm, wrote:
On May 1, 11:10 pm, 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

Sounds like its time to dig the tank up and convert to natural gas...

Underground tanks are a huge liability because they often never
get inspected when used in homes and can have been leaking
for many many years when the homeowner finally starts to
realize that they are running through the oil in the tank faster
than they used to...

~~ Evan

An even better source would be to simply ask the buyers to put the
seller in contact with the actual insurance company and mortgage
company and ask them for their position. There is no question that
having been burned, many of these companies have tough reqts regarding
underground oil tanks. Even if the tank is fiberglass, that doesn't
guarantee that an underground fitting won't leak. Or the lines
between the tank and furnace. What one company will be OK with can be
different than another company.

Alternatively, call up some insurance companies and ask their
position. If you find one that says they will inure a new fiberglass
tank, you may have half the problem solved. On the other hand, you
have to also assess whether in this market, it's not better to just
bite the bullet and put in an above ground tank or if possible,
convert to gas. How much difference in cost can it be to put in an
above ground tank versus a buried one? I'd think the above would
actually be less expensive.

Underground tanks are not an automatic problem. Every gas station in
the US has one or more of them.

Major difference. Gas station tank installations have specific
requirements about allowable time in service and leak detection
equipment.

"someone told me" is not enough to go on.