Hazardous Property Sold at Auction - Any recourse???

8 Replies

I bought a property from a sheriff's sale only to find that the property has an oil tank leak from an above ground storage tank in the basement.  It was never disclosed that there were environmental issues during the auction.  I only learned of this after the purchase. The next door neighbor told me that this likely happened as a result of the flood from Hurricane Sandy. The oil tank appears to have been decommissioned at some point since the home has been converted to gas but there was obviously a spill on the concrete floor that lingered around for 5-6 years.  The odor is VERY strong and has small piles of mud scattered throughout. I'm not sure what the implication is to clean up this mess and the potential nightmare that might ensue based on some of the horror stories I've read about. The deed is not conveyed to me since it's taking 6-8 weeks to process so I'm technically not the owner yet. I definitely don't want to inherit this potential disaster especially since this hazard was never disclosed upfront.  Is it even legal to sell a contaminated home at an auction without any disclosure?? Any thoughts on how I can get out of this nightmare?? 

Contaminated soil is an issue. A leak on a concrete floor i am not sure is an issue . We. had to pour a floor with a wall high enough to contain 150 or 200 gallons, it was concrete. Maybe the decommissioned tank is the issue given the basement was flooded, probably with salt water, which is corrosive, get it removed. how big is the oil spill?

Colleen F.

    I'm not sure how big the oil spill was. At this point, it's just dirty mud. I wouldn't be able to tell if it weren't for the strong diesel fuel smell. The concrete floor doesn't appear to have any cracks from what I can tell and it looks like there was a sealant. 

    I can have the oil tank removed but wouldn't I need to get the soil under the concrete tested? I'm not sure how big or small of an issue this can potentially be and if I have any recourse to get out of this deal at this point. 

    I doubt you have any recourse.  When buying at a sheriff sale you're taking a big risk because you're unable to do any real due diligence.  You don't get a property condition disclosure in a sheriff sale.

    Jon Holdman

      You likely dont really have recourse as @Jon Holdman said. Your cost will be removal of the mud and tank. We had a sandy flooded house in woodbridge with a fair amount of mud in the basement from the swamp and the arthur kill. The house had gas heat so it wasn't oil but it smelled bad. I dont think you need to test under the basement floor but possibly what is on the floor. Get the tank removal guys to quote getting the tank out and go from there.

      Colleen F.

        @Account Closed

        Sheriff sales and other live auctions are as-is, where-is with no recourse. That’s why they are high risk.

        If you don't yet have the property it may be possible to renege and not follow through.  If they already have a deposit you will lose that.  And you'll probably be banned from auctions for that county.  This is the sort of risk you sign up for when bidding at a sheriff sale.

        Jon Holdman

          @Colleen F. 

          Thanks for the tip.  That makes me feel a lot better if that's all there is to it. Will see what the tank removal company says about it when they come out to assess it.  Keeping fingers crossed. 

          Originally posted by @Jon Holdman :

          If you don't yet have the property it may be possible to renege and not follow through.  If they already have a deposit you will lose that.  And you'll probably be banned from auctions for that county.  This is the sort of risk you sign up for when bidding at a sheriff sale.

           I definitely don't want that to happen so I'll only do that as a last resort.  Will go the route of getting a quote and see if it's a simple clean up and tank removal issue.  Hopefully, this doesn't become a disaster. 

          Join the Largest Real Estate Investing Community

          Basic membership is free, forever.