Would love to hear your experiences dealing with oil tanks

20 Replies

Hi BP fam hope all is well!

I wanted to know if anyone has had any experience with buying a home that needed to have an oil tank removed due to leakage into the ground. Seller does not have the funds to do it themselves and is offering to come down on the list price. If you have any experience in the matter of oil tank removal I would love to hear your story. How much did it cost? How long did it take? Was it worth it? 

ANY info would be appreciated. Thanks!

@Devyn Caraballo I’ve seen a few of these first hand that’s would make your hair stand on end. If everything is clean, it should be a $800-1500 job to get it done, permits, inspections, and never worry about it again.

But... my parents sold their house in NY with a decommissioned tank that had leaked. Final bill was $89K, though somehow covered by insurance since it was part of a watershed. (This was ~18 years ago. A neighbor in the same neighborhood had oil leaking into a nearby stream, which they found out when the DEP showed up knocking on their door.

A good friend had a similarly horrible experience in NJ where the oil had leaked under the house. It added about 6 months to their closing date since they had to dig under the house.

I personally think that a lot of these cleanup efforts these days are overkill, but no one cares about my opinions :)

The lesson I hope you take away is that you don’t want it to be your issue. My suggestion is to have the owner have it removed before closing - maybe even using up to $1500 or $2K of your escrow. But if it’s a bigger issue, you can walk away with only a bit invested.

In ground or above-ground (please let it be)?

In OR, you need to get a cert contractor to remove in ground and then keep digging until you find clean dirt, so no real accurate way to quote.

@Devyn Caraballo

I bought a house on auction that had a leaking oil tank, I did not realize until the oil delivery company brought it to my attention and it was during the winter time. The price quote of a new tank and abandonment of the old thank was $2500. Not a bad deal, so I thought and I gave them a go ahead. They installed the new tank and they cut open the top of the old tank and told me everything looks good. I paid them and I left them to finish the job, bad idea!

They call me later that the soil was contaminated and were talking about remediation and that they already reported it to DEC. They quoted exorbitant amount of over $15k for the remediation PLUS a long list of TBD items not included in the $15k.

Anyway, to cut the long story short, I got another company that finished the excavation and filed clearance with DEC. The DEC inspector came and said that there was nothing wrong that the initial company probably spilled the oil and wanted to extract more from me, I thought they did but I had no proof.

Total cost of the new tank, excavation, filling the whole with new soil, and repairs to the damage to ground was about $10k. Unfortunately, this delayed the property renovation for two months due to scheduling inspection with DEC.

Lesson learned- Stay with the contractor until the job is done! Also, If you can get the seller to correct or at least share the cost.

All the best!!😇

@Devyn Caraballo I’ve had one removed before. Got a DEQ report from the seller that it wasn’t contaminated. So I paid $1k to fill in the below ground one and they removed the above ground one. This is in Virginia.

NJ is pretty serious about this. I had an aunt with an issue and it was many truckloads of fill later that it was resolved. No idea what is cost.   We had one spring a leak in the middle of winter (just a pinhole) gallons came out but the tenant got buckets under it and it was $2500 for replacement with a roth double wall tank and removal of old tank. I would evaluate above or below ground tank and if it was a spill or long term leak.  The 10 k  might not cover it if leak was extensive and you have to remove and replace a lot of soil. My recollection is my aunt had to have all contaminated soil removed and replaced, then I think it was DEP came in and tested the soil.

@Devyn Caraballo   This is a potential landmine and a BIG one at that.  It could (unlikely) be no big deal.

More likely, it could be a HUGE remediation bill that the seller is trying to drop on your shoulders.

Get an EPA Phase 1 inspection at the very least.  Phase II if necessary.

If any of it looks less than perfect, make the seller pay for further inspections as it can get very ugly, very fast.

Personally, I'd be inclined to walk away.

@Devyn Caraballo I’m in the process of having two 500 gallon underground oil tanks removed that are in use and replaced with interior tanks. I have no reason to believe they are leaking but my buyers want them out before closing. I have one estimate for $11,000 for removal of the two, soil testing, and installing the new ones, a 275 gallon tank and a 330 gallon tank. I will be getting a second estimate Tuesday. Time is of the essence as we have the clear to close from the bank for the end of the month and I think I’m going to have to have an extension. However the buyers drug their feet two weeks on approving the inspections so it’s not totally my fault. I’m hoping for a lower estimate from the second company as my realtor and handyman said $11,000 was high. My handyman said he could do it for $7,500 but the realtor felt a professional soil testing company would be better.

@Devyn Caraballo

I’m in New Hampshire and our Dept. of Environmental Services has a fund homeowners can tap into to help pay for the clean up of leaking oil tanks. Part of our gasoline tax funds it.

You definitely want to leave the problem in the seller’s hands. Don’t take a concession—make them fully remove and remediate. But if your state has a similar program, it might soften the blow for the seller.

@Devyn Caraballo

I’m pretty sure your issue is an underground tank but here’s my experience with oil tanks.

For above ground tanks usually in basements in my area I’ve been told by a couple different buyers’ inspectors that the life span is around 30 years. Or at least that’s what they recommend to the buyers in their report. Costs about $2000-2500. If the tank has no visible leaks I just leave it to the inspection but do plan on replacing it if a buyer requests.

Originally posted by @Charlie MacPherson :

Get an EPA Phase 1 inspection at the very least.  Phase II if necessary.

Well, Phase 1 = $1000+/- and only looks up records.  Phase 2 = $5000+/- and does actual samples.

Think I'd be very serious about the property since that's coming out of the buyer's pocket.


It all depends on the level of leakage. I would strongly recommend doing a Phase 2 environmental assessment. The results of that assessment will tell you what the level of contamination is. If it is extensive, the cost to clean it up can be significant. 

If you are regular home buyer or a new investor, you can't buy a house with an existing tank with a leak under any circumstances. You won't get insured and the risk is too great. The tank pull is right about $1,800-$2,000. When there is a leak, the minimum spend to get the DEP approval is $7,500 for soil testing. If the leak hits a water source or neighboring property, the cleanup could be $100,000. The liability is too big.

My PM just bought a house with an active tank and did ground testing before (not 100% accurate) and made out ok, but we know what we are doing. We budget $10k for a what if, but we also know we could get unlucky. You can get testing done, but if there is a known leak, RUN AWAY.

Thanks for the tag @Joanne Eriaku

I'm an environmental lawyer and seen lots of these. the costs vary depending if the tank leaked and contaminated soil or groundwater. a small tank with just some surficial or shallow soil contamination from overfills can costs $10K-$20K. if there is extensive soil contamination, the costs can be double, if groundwater is impacted, you could face much higher costs. i would not accept an offer until you have opportunity to take samples to see how extensive contamination.

Originally posted by @Devyn Caraballo :

Thank you for all feedback! My instinct is telling me to walk away, especially being a new investor. 

I'd be honest with the seller and tell him you need a "clean" property at close.

Then see how motivated he is to get some sort of cert on the oil tank.