How close can you be to a gas station?
Hi all,
I'm considering a property that I love except for one small problem: it's very near a gas station.
The property is a 12-unit in a working-class neighborhood outside of a thriving city. Very low crime, surprisingly good schools, and the numbers look great.
Unfortunately, the property is catty-corner to a gas station. In the picture below, the property is outlined in blue and the gas station in red.
From an environmental standpoint, is this too close? Could the underground gas storage seep to the the multifamily?
Thanks!
@Jon Schwartz For 1-4 family properties with government backed loans (FHA, VA) you cannot be within 300' of a gas station or any fuel storage facility.
A 12 unit is obviously going to require a commercial loan. I'd talk with your lender and ask them to check with underwriting.
Thanks, @Charlie MacPherson. If the government doesn't want to back a loan within 300' of a gas station, maybe I shouldn't buy a property within 300' of a gas station no matter where the loan is coming from!
@Jon Schwartz I wouldn't necessarily rule it out.
I've done a little work here in MA marketing gas stations. The environmental controls are very tight and underground storage tank (UST) operators are held to strict standards for regular inspections and monitoring. Here, there are funds (21J fund) set up to cover cleanups.
Talk to the state if you want to know what the CA programs and regulations are like. I'll bet that they're every bit as strict as MA. I'd also bet that like MA, CA inspection results and historical records are public and probably available online.
If the numbers are good, I'd proceed with your due diligence.
I wouldn't let the proximity to a gas station deter you from proceeding. I would certainly make sure you did environmental due diligence including having the sellers sign an environmental questionnaire indicating whether they know of any environmental concerns.
I have seen environmental contamination from gas stations go under major interstates and impact properties several hundred feet away. The main thing you want to do is an adequate level of due diligence to so you could have an Innocent Landowners defense if any environmental contamination was to show up in the future. I would inquire to local environmental engineers and even try and speak with the gas station owner. There are public databases that will show if there have been any leaks. If you do engage an environmental engineering company to do a Phase 1 report, be prepared for them to recommend a Phase 2 that would involve drilling soils samples as their further action recommended. This could get expensive quick so be prepared.