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

Bud--

zzzzzzzzzz wrote:
On Sun, 02 May 2010 09:36:14 -0500, 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...

It's old enough that it may not be a double-wall fiberglass tank.

The new tanks that were required for gas stations were double wall with
leak monitoring in the space between.

At some size (1000 gal?), surface tanks are required to have secondary
containment, which could be a concrete floor and walls high enough to
contain the tank contents.

Residential is exempt from the federal requirements unless they have
changed. States could regulate residential.

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.

Yes, now try to get new insurance on those tanks. They'll all likely be
replace (with above ground tanks) the next time the property is sold.

The oil supplier may be another source of information on what the
reality is.

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.

That's one place to go, but the final arbiters are the loan and insurance
underwriters. It really doesn't matter what's "legal" if you can't get a loan
or insurance.

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.

Huh? The agent hired to *list* the house is always working for the seller.
Who would be dumb enough to sign a contract otherwise? The agent the buyer
uses is often/usually (almost always) working for the seller, as well, but
that's a separate issue.

I agree that the seller's agent is paid by the seller and is working for
the seller. Here the buyer's agent is generally paid by the seller and
is working for the seller. The buyer may have their agent working for
them, in which case the buyer probably pays their agent.

The sellers agent should know what the options are. _That is their job._

Might be wise to find out what the RI regs are and what the insurance
companies require. Could ask the sellers insurance company (but may be
better to ask anonymously).

All we have is the prospective buyers "were told".

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".

You're not legally required to sell. If the buyer *can't* buy the property,
you're out of luck.

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

Not going to work if the bank or insurance company require it. It'll have to
be done before the sale.