Underground fuel oil tanks, “UST” Alert!

Affordable housing demand coupled with a growing desire for larger lots, mature landscaping and tall trees are factors that are driving an increase in requests for homes in older Cary and Raleigh neighborhoods.

I enjoy taking clients to various mature neighborhoods like Scottish Hills, Farmington Woods, and MacGregor Downs in Cary., and many older Raleigh neighborhoods.

One thing that conveys with mature trees and landscaping is a property with a past. That past may be innocous, but may include items like lead-based paint and asbestos. These are generally recognized issues.

A very serious issue, and one of which few people are aware, is the possible existence of Underground Storage Tanks, “UST’s.” Prior to the introduction of natural gas and heat pumps in Wake County, many homes were heated with fuel oil furnaces. Fuel oil is delivered by tank trucks, and loaded into storage tanks. At some unfortunate point, someone determined that property would look better if the tanks were buried. Et Voila! The UST was born!

Underground Storage Tank Filler and Breather pipes

Filler pipe and breather tube for a UST, Underground Storage Tank. The existence of these pipes may be the first clue that there may be an issue with the property.

Later we learned that rust can perforate the UST, allowing fuel oil (or diesel fuel, or gasoline) to leak into the soil. This can have massive environmental repercussions, and homeowners can incur great costs in remediation.

Is the existence of a UST on the property a deal-breaker? Often it should be, as the mess can convey to the new owner. Clean-up costs can be huge. I have heard numbers from $10,000 to $45,000 to remediate the oil spill. And the legacy of the spill can have a very long tail. There is a North Carolina fund to help homeowners, but picking through the process can be daunting, and it is not entirely a free service.

I had clients fall in love with a sweet, older lakefront property last fall. The property was in the middle stages of an underground oil spill remediation. The oil plume underground was larger than the footprint of the house and garage. Monitoring wells are in place in 6 locations around the house to check the level of petroleum compounds in the groundwater. Huge vacuum pump trucks were brought in to pump the groundwater out of the area, and over 100 tons of soil was removed to specialized landfills. The cost had to be massive. The inconvenience had to be larger yet. Those wells will be monitored for years to come, and the neighbors potable water wells will also require monitoring.

My clients were sad to decide there was too much baggage attached for them to proceed.

Must a North Carolina Seller disclose the existence of the UST? At this time disclosure is not mandatory. The Seller can mark “No Representation” on the NC Property Disclosure form. That is legitimate disclosure, as long as no false representation is made.

However, the Agents involved, both Listing Agent and Buyers’ Agent are held to a higher standard. The competent, ethical Agent or Realtor MUST make some disclosure of the existence, and should be expected to see readily visible pipes like these.

The Listing Agent in the example failed transaction above handled the disclosure very well, was up front in the listing and in conversation, and delivered all information as rapidly as she could. And it was a learning process for both of us.

My clients and I sure loved the lake view, but in that case the UST was a deal-breaker.

6 thoughts on “Underground fuel oil tanks, “UST” Alert!”

  1. Mike,

    Great post about USTs. As a former environmental consultant I’ve doen my fair share of UST pulls. They are expensive and I can see why they would be a deal breaker. I can’t even imagine considering a home with one where the main source of potable water is from a well. I’m a little surprised by the disclosure requirements for the seller. It seems to be of little help. I’m glad the agent is held to a higher standard, but I can’t figure out why it is different for the owner. Interesting.

  2. I’m glad to see you recognize the potential problems of home heating oil USTs. However, the above ground storage tanks (ASTs) can be an even bigger problem as there is no financial assistence offered by the State for AST related cleanups/assessments. As an environmental consultant who deals primarily which such USTs and ASTs, I would recommend an initial site inspection before getting a client too committed to a given property. The inspection can determine if a tank has leaked or not. About 20% of the USTs we inspect show no evidence of leakage and the UST issue is easily resolved. Please check out our website to learn more.

  3. I purchase a property one year ago and just found out that there is a 500 gallon gas tank buried on my property. The filler neck was full of sand. I excavated the area and was going to raise the tank out of its hole but decided to file a hole in the top edge of the tank. I was suprised to see that it is half full of gasoline. I recently hired a tank removal team to remove this tank and am attempting to get reimbursed for this process due to the lack of disclosure of a tank on the property. I used a home inspector which the realtor recommended and nothing was ever told to me about a tank on the property. The property was purchased from a bank As-Is. The realtor is saying that it is my problem now and claims he has no liability. Any comments

  4. Most older properties built before 1970 have or had an underground heating oil tank. Aproximate 90% of these old tanks have leaked requiring cleanup. That’s just the way it is. But it doesn’t have to be a nightmare for anyone.

    By conducting a proper tank removal and complying with all State and Federal requirements, the property can be repaired and/or brought into compliance with State regulations.

    If the oil tank was previously removed, that may not necessarily be a good thing. Was the removal documented by an environmental professial? Even in these situations, it’s not to late to fix the problem and sell the property. You just need to implement a plan to meet the State requirements and have an effective marketing strategy for the property.

    Proper tank removal and cleanup is really the only good option for buyers or sellers. A Property Seller will remain legally responsible for an oil tank and contamination even after they sell the house. A Property Buyer may become additionally responsibility for the tank and contamination even though they never used the tank.

    Oil tanks are a complicated and potentially costly issue, but there are good solutions. If you need help navigating through a tank removal and contamination cleanup, maybe Practical Environmental Solutions can help. To learn more you may visit our web site at http://www.oil-tank.com.

    We have over 25 years of experience and guarentee our work.

  5. Concerning underground storage tanks on your property, if you want a list of consultants who you can call that are registered with the NCDENR, you can call them at (919) 707-8171 or visit their website at ‘http://portal.ncdenr.org/web/wm/ust’.

  6. Thanks for this informative video! Something like this always looks easy in an instructional video however if I went to do it in person I feel like it may not go that smoothly. A licensed professional may be a great idea! Oil tank removal is not a topic that I know a lot about, I’m sure I am like many others with this topic. It is interesting for me to understand a little bit more about it though! Thanks again for sharing.
    Lauren
    http://www.commtank.com

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