Buying or Selling a Home with an Oil Tank

What you need to be aware of when buying or selling a home with an oil tank

On June 28, 2001, the Ontario Legislature enacted the new Technical Standard and Safety Authority (TSSA) Act, 2000, which outlines appropriate procedures for homeowners of buried or free standing fuel tanks on removal and maintenance.  Old underground oil tanks and poorly maintained or defective heating systems are the leading cause of oil spills and leaks, leading to costly cleanup in the hundreds of thousands.

How does this affect you in selling or buying a home?

A recent decision of the B.C. Supreme Court shows that you should be concerned about residential fuel tanks when buying and selling land, because the cost implications can be in the hundreds of thousands of dollars.

In the case, a building inspector reported evidence of a buried oil tank because there was a vent and fill pipe and the inspector recommended locating the tank and testing for oil products. The homebuyers, Colbecks, did not act on the inspector’s recommendation until after they decided to sell the property years later. At that time, they retained a contractor who pumped out 580 gallons of water, oil and sludge, cleaned the tank and filled the tank with sand for $900, instead of removing it.  They sold the home to a new buyer, Ms. Aldred, and she became responsible for the contamination that occurred and sued the Colbecks for negligent misrepresentation because the contractor improperly decommissioned the oil tank.  The Court ultimately found the Colbecks responsible under the Environmental Management Act, since they were warned about the possible problems in the inspection report and failed to examine the tank for two years.   This suggested to the Court that the Colbecks contributed to the contamination of the site. Since Colbecks told Ms. Aldred the tank was decommissioned, she recovered $6,000 in costs and the ‘reasonable’ cost of remediation of the contamination.  However, she was declined any other damages.

How can you find visual evidence of an oil tank?

For older properties in areas where use of oil as a heating fuel was common, inspect the building grounds for oil fill or vent pipes.  Unscrupulous sellers or agents remove the fill or vent piping from a buried oil tank, taking no other action to properly abandon in place or remove the tank. Don’t be afraid to lift flat stones or paint or coffee cans that may be marking an old oil tank filler or vent pipe.

For below-ground oil tanks or USTs, a visual inspection inside of the in-building equipment, foundation walls, and surrounding area may disclose abandoned oil lines.  For above-ground tanks, a visual inspection of the tank and its piping should be sufficient.

If you are purchasing a home and are unsure of whether the home contains a working or properly abandoned oil tank, proper inspection, by you and a qualified inspector, will ensure you don’t have to deal with unforeseen consequences, such as a significant expenses associated with clean up and removal.