Oil in the Soil

I discuss the issue of oil in the soil with most of my clients. It can
be a very expensive problem and is arguably under-addressed in real
estate transactions. While I am not a oil or soil expert I’d like to
share a few basic facts about the oil in your soil.

Many homes in NC have used oil as the heat source. Oil is stored in
tanks either above ground (AST) or below (UST). These tanks are not
regulated and a tank alone is not a cause of concern. The issue is
with a leaking tank. I have been told by oil tank experts that ASTs leak as much as 30% of the time and USTs can leak about 70%
of the time. Once a tank has leaked it is regulated by the state.
Knowledge of a leak must be reported to the state within 24 hours with
a penalty of up to $10,000 per day. A leak is found through soil

Any spill must then be cleaned up, which can often be an expensive
endeavor. I’ve seen it cost anywhere from $3000-$30,000. If you live
in a home where a leaky tank is found, you may have some options. If
the tank was not used after 1984 then the last user is responsible for
the tank, although it can be difficult to find a former owner. Another option
is the Commercial and Noncommercial Leaking Petroleum UST Trust Fund
which may cover up to 100% of a UST leak.

If you are purchasing a home that may have a tank (or may have had a
tank in the past), it’s wise to do your best to find a tank and do any
necessary soil testing. Often I will visually inspect for a tank or
signs of a tank. If a house is heated by gas I call the gas company to
see when gas was hooked up to the home (often if there is a gap
between when the house was built and when gas was hooked up oil was
used in the interim). If we cannot eliminate the possibility of a leak
I advise clients to have a professional search the property for signs
of a tank. If a tank is found I order soil inspections so that a leak can be address prior to closing. If we cannot find any evidence a client can purchase the
home with some assurance that they won’t be encountering an issue with
oil in the soil in the future.

It can be a complicated issue but it is certainly worth addressing to
avoid costly oil remediation when selling one’s home.

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