What if there's an oil tank discovered after signed contract?

[Michael Lee]

Hey all,

If I waive inspection to stay competitive and gets the property under contract, but later finds out there’s an oil tank and/or contamination, would I be able to get out of the contract? If so, under what grounds? (This is in New Jersey)

Thanks!

[Ron S.]

well...doesn't sound like you'll be able to back out on the inspection contingencies so, hopefully you gave yourself a backdoor with appraisal and/or financing contingencies otherwise, if you back out, i would guess maybe you lose your earnest money at best and get sued for performance at worse?

[JD Martin]

Unless the owner knew it was there and failed to disclose it, and state/federal law require it be disclosed, I don't see how you'd have any real grounds. I've never waived inspection and have been plenty competitive. Inspection doesn't mean the seller is going to do anything about it, only that you have the right to bring your own people in to determine the true condition of the property and if it's not to your standards that you can walk based on inspection report/repairs. 

[Michael Lee]

Thanks for the input!

[Ryan W.]

@Michael Lee you could also carve out the oil tank specifically and waive other inspections.  I recently purchased a property in northern NJ and my accepted offer included oil tank and title contingencies only.  

[Jessica Zolotorofe]

I agree with everyone. There's not really any way out unless, like people said above, there's a financing or appraisal contingency and the loan is contingent upon clean environmental or the removal of the tank. Is it an active tank? Abandoned? Properly registered and decommissioned? Did you do any testing to see if there was any leakage or contamination? If there's no contamination, depending on how much room you have in the deal, if you really like the property, you may want to factor in costs of removal and buy anyway.