Honey, There is an Oil Tank in our Backyard

Honey, There is an Oil Tank in our Backyard

As per the law, owners of property with underground tanks are responsible for the costs of maintaining, upgrading, and removing them and for cleaning up contamination.

Many buyers looking for a home are infatuated with an old vintage house. Though thrilled with the idea of owning a 70- to 80-year-old house, many are unaware of the danger lying beneath the old rustic charm.

If you spot an oil tank in your backyard, get ready for an expensive ride. In olden days, houses had underground oil storage tanks (USTs) heated not with natural gas but with furnace oil. Richard Silver, salesperson and vice president of Sotheby's International Realty Canada, cautions that many of these oil tanks lie unused and owners forget about them. With time these tanks start rusting or the welding tears apart which results in spill over of the leftover oil. This causes environmental contamination as the oil seeping into waterways adversely affects the soil and the property.

One of my clients recently bought a commercial property for residential use and found an oil tank in the backyard. Though we came to know about it before the purchase was made, the negotiations about acquiring the property had to be prolonged considerably,

said Silver.

removing oil tank 2
removing oil tank 4

Silver holds, it is the responsibility of the owner to remove the buried oil tanks;

Sooner the better as USTs if not taken care of immediately can incur costs as high as $10,000 or even more. Even if the USTs are less than 10 years old it is in owners' interest to remove them before the leaking starts. This will save them from possible major expenses due to violation of [the] Environmental Management Act,

said Silver.

As per the law, owners of property with underground tanks are responsible for the costs of maintaining, upgrading, and removing them and for cleaning up contamination. It is also mandatory to use the services of the Technical Standards and Safety Authority (TSSA) as that is the only one authorized and qualified to perform the removal task of buried underground oil tanks.

If a TSSA certified technician holding a Petroleum Equipment Mechanic 2 (PM-2) license finds that the tank is too dangerous to be continued, the distributor will immediately stop the supply of oil. It is also the owner's responsibility that the TSSA is notified once the underground tank has been removed. The property owner must have an environmental assessment report completed by a professional engineer, a professional geoscientist, a professional agrologist, or a chartered chemist. If a leak of fuel oil is confirmed, the Spills Action Centre of the Ministry of the Environment must be notified. The owner should also keep in mind that many insurance companies refuse to provide or extend insurance if the tank has reached or passed the prescribed age. Once the tank is removed it leaves a large hole and filling it also increases the expenses.

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Ontario has a strict regulations code about the handling and storage of fuel oil. If an underground fuel tank has not been used for two or more years and the owner plans not to use it any further, it must be removed irrespective of its age. As per the Ontario Fuel Oil Code (1 October 2001) all existing single-wall steel underground tank systems have to be withdrawn from service and removed if they are 25 years or more old or if they are not properly maintained. Underground tanks over 5,000 litres must be tested annually for leaks. There also has to be a comprehensive inspection at least once every 10 years. In Ontario, effective May 1, 2002, fuel distributors will not supply fuel oil to an underground tank that is not registered with the TSSA.

Before calling the expert, a home buyer can make a few simple checks to know if the property has or had any USTs and if there were any possible leaks.

  • Ask for basic information such as the age of the tank, property and type of oil tank. This will give an idea of any risk about an oil leak.
  • Take a walk around the property and look for an unusual bald patch of grass in the area. At times, during the spill the hot oil poisons the soil and even if there is no heating oil or odour left, the grass will not grow in that area.
  • Also look for depression near the house or at the missing grass spots generally caused by oil tanks or by vent pipes protruding from the land.
  • In order to know if there has been a spill or incorrect removal of the USTs, one should know about the existing or previously installed oil tanks and vents, their size, the abandoned heating oil lines, marks where equipment was mounted and footprints of old heating equipment.

A prospective home buyer should make sure their realtor asks the seller's counterpart for documentation about any USTs at the property. They should educate the potential buyers about the dangers of USTs and stress on proper inspection of the property. A person buying an old property should also be aware that their insurance company can deny home insurance if the tank is not registered.

Buying a home is everyone's dream. But to avoid unwanted surprises and costs, proper homework and following proper protocol ensures your dream does not give you nightmares.

Title photo by: Field Outdoor Spaces

PS00SK

14 Responses

  1. Yuri Olh

    Cleanup of the oil spill in the soil from an underground oil tank starts at $0.5 Mln. Yikes!

  2. Paul McDonald

    I like how the Government imposes all these clean up fees; has anyone notice how much oil is spilled across the country due to our oil fracking (the oil sands) industry? Such a bunch of crap.

  3. Marshall Cohen

    Always a big issue even in the best neighborhoods in Toronto and Rural GTA. You should always assume that with older properties their may be a buried tank, residential and commercial, check it out to be sure. Lots of surprises.

  4. Jamie M. Edwards

    Just went through this on one of our listings..an estate near the escarpment edge. 2 appraisers missed the pipes sticking out of the ground which I noticed and the executor had to to have two tanks removed one in the house and one underground plus several tonnes of soil…

      1. Jamie M. Edwards

        And we were lucky the tank was OK and if I recall the price of oil jumped so your Dad and Mom didn’t need A refill for a long time…at the time we said please do not top up the tank On closing. The Realtor just foaled to pass the message on!

  5. Arnie Gess

    Excellent Blog that makes aware a hidden danger many home buyers do not even know about. I have also posted a Blog on my website on this topic and have linked back to this article. Keep up the great work!

    link to ow.ly

  6. Ryan Guthrie

    From an insurance perspective, an oil tank whether outside or in the basement, adds another dimension of unexpected risks and costs. The age & condition of the tank, the manufacturer, the location, and safety/leakage protection measures can mean the difference between no premium impact or concern , to the major risk of a $1million + loss and no insurer willing to take the risk of insuring you..

  7. Mike Z Davidson

    I had this oil tank problem back in 2005 when I bought my first home. So glad the residential realtor recommended getting an inspector. I also recommend environmental audit reports when i sell commercial properties too.

  8. Yogi Sukhi

    This is good advice and that makes aware a hidden danger.
    Since you did not put the tank in their, should you ask the previous owner/s to share the cost or de-contamination because probably the owner who had buried this may not be alive now.

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