Regulations Governing Underground Home Heating Oil Tanks

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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
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Yes. Underground tanks are *huge* liability issues. Several hundred gallons of fuel oil in the ground can easily cost six figures to clean up. AFAIK, most won't underwrite even new underground tanks.
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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
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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.
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On Sun, 2 May 2010 06:57:46 -0700 (PDT), snipped-for-privacy@optonline.net wrote:

Underground tanks are not an automatic problem. Every gas station in the US has one or more of them.
"someone told me" is not enough to go on.
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On Sun, 02 May 2010 10:02:53 -0400, snipped-for-privacy@dog.com wrote:

Gas station tanks are inspected on a regular basis. They were all replaced over the last couple of decades and are monitored more or less continuously. That's something the insurance and mortgage companies aren't going to like counting on the homeowner to do.

No, but if it's the prospective buyer of your home, in this market it is good enough.
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Most every one of those metal tanks had been dug up and replace too, leaking or not
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above ground outdoor tanks in areas that freeze can have issues with frozen lines
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wrote:

Generally they use kerosene or a kero mix for outdoor tanks where freezing is a problem. They'll often change the mix during the season, too, which can cause problems if you don't use as much as the delivery company expects.
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wrote

Many use kero for that reason. At work, we have a 2000 gallon tank and use an additive for the oil, but in really cold weather it can still be a problem at times. Probably similar to what goes in diesel
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I believe they *all* have, by now. This is one of the reasons the "ma and pop" gas stations went the way of the buggy whip. Retanking stations cost well into the six figures.
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On May 2, 12:17pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

LOL... If you seriously think that has solved the problem then you are completely unaware of entire divisions of your state government that are monitoring sites where "old tanks" were removed but the site itself and the area "in the plume" is still in need of millions of dollars worth of abatement... Massive backlog of those sites around the country...
~~ Evan
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wrote:

You must be on drugs. Oh, and don't forget the illiterate part, either.
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On 5/2/2010 10:02 AM, snipped-for-privacy@dog.com wrote:

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

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wrote:

I work part time for an insurance company and there is not a carrier left in the market that will cover an underground fuel tank on new business. NOT ONE. This is in Ontario Canada. Some places are even requiring (not the insurance co, but the county) either double walled vacuum monitored tanks or spill containers that will contain a full tank contents in case of a leak for ABOVE ground tanks.

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On Sun, 02 May 2010 16:15:37 -0400, snipped-for-privacy@snyder.on.ca wrote:

Oh, boy! At this point, Clare has claimed to have about 15 full time or part time jobs, making him a professional expert regardles of the subject under discussion!
When does he sleep?
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On Sun, 02 May 2010 17:44:09 -0400, snipped-for-privacy@dog.com wrote:

Just for clarification, I am a licenced mechanic who spent over 20 years in that field, including teaching both high school and trade school and 10 years as a service manager. The first place I worked was also a farm equipment dealer and small engine shop (BoaSki snowmobiles, Ariens lawn equipment, and Benelli motorbikes). For health reasons I left that trade and was trained as a computer technician. I worked for a local computer manufacturer/distributor for 5 years, then started my own business. While working in my own business I also worked for 2 window/door companies, a millright, and an insurance company part time. Before getting my mechanics licence I also worked part time for my Dad, an electrician, and spent 4 years working on the farm as a teen. One of my hobbies was rebuilding old tube radios - and that has continued to repairing some solid state stereo equipment and other non-computer electronics, as well as the computers I fix for a living. Another hobby has been cars - restoring classic and antique cars, as well as building an electric car. Also drove cometetively in navigational rallies for several years. I am also currently building an airplane.
Doesn't leave much time for drinking, partying, or carrousing.
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On Sun, 02 May 2010 18:18:00 -0400, snipped-for-privacy@snyder.on.ca wrote:

LOL!
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wrote:

Yeah? So?
A 15 year old home heating oil tank is not a big deal, and if push comes to shove, is generally not a big deal to replace. The insurance company will insure the new tank and the mortgage company will make a mortgage. Yes, it will cost more to replace than a tank in the basement. Not the end of the world, though.
If you own a house with an underground tank, you can always do a little homework yourself so that when someone raises the objection, you have FACTS with which to respond.
Or, you can wring your hands and not sell your house.

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On May 2, 5:37 pm, snipped-for-privacy@dog.com wrote:

Apparently, doing a little research is exactly what the poster is doing. It may not be a big deal to YOU, but if the buyer says that it is a big deal to both the mortgage company and the insurance company, then it's up to you to decide how marketable you want your house to be. A 15 year old underground tank IS a big deal to me too, and having seen many horror stories where lots became major environmental cleanups that cost huge amounts of money, as a buyer, I'd be looking at other houses that don't have this potential problem. And if it was a truly unique house that had so many other redeeming virtues, I'd insist on thouroughly testing the tank and provided it passes, a discount sufficient to replace the tank anyway.
In today's market you think it's smart to be arguing "facts" with buyers instead of just spending a few thousand to get rid of the tank? That's all it's gonna be right? Because you as seller are 100% sure the tank isn't leaking and when they dig it up it's suddenly going to go from $3K to $50K?
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