With the advent of oil replacing coal as the primary home heating fuel, someone had the questionable idea of creating underground storage tanks for the oil. Ultimately metal tanks rust/rot out and develop holes, permitting the oil to get out and water to get in. Not a good situation.
In the late 1970s, the State of New Jersey identified this as an area of concern, banning the installation of new underground tanks for residences, and requiring all tanks being abandoned to be filled with sand. This was intended to prevent the collapse or settling of the ground above the tank. Municipalities were to keep records of the abandoned tanks.
With the discovery of oil contaminated groundwater in numerous homes, the State doubled down on its regulation of underground tanks. If an abandoned underground tank was identified,the homeowner was required to obtain a municipal permit to excavate the tank. If in the course of excavation, it was discovered that the surrounding soil or groundwater was contaminated,then the excavator and/or town official was obligated to notify the NJ Department of Environmental Protection.
The next step would be for the homeowner to arrange to have the contaminated soil tested. If the amount of soil contamination was minimal, then the tank could be removed and the hole back-filled. However, if the contamination was substantial, then all contaminated soil would be removed from the tank, together with the tank itself, and ground water samples obtained and tested. Depending upon those test results, the homeowner would be required to install a monitoring well near the excavation, and pump out and purify the ground water and then recharge it into the ground until such time as future water samples met acceptable levels. These costs could well exceed $100,000.00.
If you are a home buyer, you need to have a tank sweep. You want the seller to make a representation in the contract of sale that there is no and never was any underground tank on the property. Lastly, if a tank is discovered, the buyer wants the option to cancel the contract, rather than having to wait for the seller to correct the problem. Municipal records may also be checked by the buyer or the realtor for abandoned tanks.
If you are a home seller, any representation as to underground tanks should be to the best of your knowledge and not to survive closing. You want the contract to provide that if a tank is discovered, you have the option to cancel the contract. That is because the cost of re-mediating your property may be more than what you are able to sell your home for. Or at best, exceeding your home equity.
An experienced real estate attorney knows what language to include in attorney review to protect clients from underground tank disasters. Mr. Whelan has acted as an expert witness in cases involving legal malpractice for underground storage tank issues.