Buried Oil Tanks

The Signs and Solutions

Tanks were often installed at least two feet below ground outside the house to conserve space and reduce the risk of fire. The life of a buried oil tank is roughly 10 to 20 years, depending on environmental factors. It will eventually rust and leak.

The leakage of fuel from a buried oil tank is more than a functional problem; it is also an environmental concern that is beyond the scope of a standard home inspection.

However, most inspectors at least tell their clients that they do not comment on underground oil tanks. Removal of a tank is a significant expense. Contamination of soil resulting from a leak leads to a much greater expense.Oil Tank

An existing abandoned tank will require removal in most circumstances. Any contamination of the soil must be cleaned up at the time of tank removal. An empty tank may eventually rust and collapse, causing soil subsidence problems. Some abandoned tanks have been filled with sand or concrete slurry to prevent this.

Oil pipes that enter the ground outside rather than pass through
the walls of a house may suggest the presence of a buried oil tank. The oil fill pipe was used to add oil to the tank and the vent pipe allowed the air in the tank to escape during filling. The fill pipe is usually about 2” in diameter with a threaded metal cap. The vent pipe is usually 11⁄4“ in diameter and attached to the house, extending about 7’ above grade. The oil supply lines carried the oil from the tank to the burner and are typically 3/8” and often installed in pairs. Their passage through a basement foundation wall indicates the presence of a buried oil tank.

The B.C. Fire Code now requires the removal (or authorized abandonment*) of any under-ground oil tanks that have been out of service for more than two years. Licensees who are involved with the sale of a property that contains, or is thought to contain, a buried oil tank should be aware that this is a concern and should also be aware of their duties with respect to disclosure in this regard.

The July 1989 issue of BCREA’s Legally Speaking bulletin discusses the degree of care that licensees are expected to exercise with respect to contaminated sites: “A licensee’s duty is to obtain all of the information that is relevant and necessary so that the prospective purchasers are able to make a value judgment as to whether to acquire the property. A licensee must exercise a reasonable degree of skill and care in informing himself of the risks involved in dealing with potentially contaminated real property to be able to advise prospective purchasers of that risk.

This does not mean that the licensee is an insurer or guarantor against a loss which results from the discovery of contaminated soils after the purchase is complete. It does mean that licensees must know enough to recognize the “red flag” signifying a potential environmental hazard. The prudent licensee should then advise the prospective purchaser to investigate the risk of environmental harm before an offer is made to purchase the property.”

Listing agents have a duty to familiarize themselves with the property that they have listed and where they suspect an inactive buried oil tank may be present, to take necessary steps to confirm this fact. If a seller is aware of an inactive buried oil tank, that seller has an obligation to disclose this fact. An inactive buried oil tank is considered to be a latent defect and therefore a listing agent must disclose its presence.

Similarly, if a buyer’s agent is aware that an inactive buried oil tank is present, he/she has a duty to disclose this fact to buyers and further advise that its presence is an environmen-tal concern. A buyer’s agent should also recommend that buyers familiarize themselves with the requirements of the B.C. Fire Code and any restrictions that the local municipality may have concerning buried storage tanks. This is particularly important in municipalities where storage tank removal enforcement is a priority. As each municipality has different requirements and provisions for enforcing the removal or abandonment of buried oil tanks, a prudent licensee should be aware of the local requirements (usually administered by the fire department).

 

* The B.C. Fire Code identifies two options for dealing with underground storage tanks. An owner must either remove the tank and piping or, with permission, disable the tank by removing the oil and disabling the tank in accordance with local regulations.