Investor · Fair Lawn, NJ · Member since 2017 · 15 posts · 2 votes
Hello BP Family - As may few in here know, we are selling our recent flip in Fair Lawn NJ which we are now under contract and is in the inspection phase. Our buyer is asking to have the oil tank removed. The oil tank is abandoned and we have a certificate of approval from the town saying that the abandonment process was approved. Our agent is pushing the thought. Let me know you inputs - should we take care of the oil tank removal? Thank you!
What does a 'certificate of abandonment' mean. Is it just that that the tank is disconnected or that the the tank was pumped out and filled with some inert material (e.g. Sand). The former may still pose an environmental hazard depending if there is any oil left in it. Also, when it eventually does rust out, there is a void and the land around it could settle. The latter is 'should' mean that the authorized agency is satisfied that everything that needs to be done is done and that there is no risk.
Also, depending on how much you are making and how much it will cost to remove it, it may simply be worth doing it to close the deal.
If your buyer is financing, it is highly unlikely that the lender will approve the loan knowing there is an underground storage tank on the property. Even if it was "properly" abandoned years ago, the possibility remains of soil contamination below the tank. Lenders do not want to take the chance on potential liability.
@Maybelle Francisco Check if your insurance policy covers oil soil contamination. If it's not cover, then I wouldn't do it. You could be exposing yourself to a 20K plus cleanup bill. The first rental property I bought had an active inground Oil tank and the bank had no issue with it. I quickly had the Oil tank abandoned after.