I have witnessed the New Jersey DEP taking up to 12 months and longer to issue a NFA letter. This was not the fault of the NJDEP but the fault of the contractor that did the clean-up. The contractors who have in most cases been paid take a long time to answers NJDEP questions and do not know how to properly fill out the paperwork. I have seen a number of cases where a contractor must return to the site and do additional remediation work in answer to the NJDEP findings and these findings in many cases have added thousands of dollars to the cost of clean-up.
Recently New Jersey set-up a program issuing a special license to some tank remediation contractors that allows them to certify the remediation has been completed successfully. This avoids the NJDEP determining if the remediation has been completed properly. The contractor after the remediation has been completed sends a certification to the NJDEP and the NJDEP will issue a NFA within max 14 days. This is a great program and all people contracting to have a tank removed should use one of these contractors. Call our office or go to the NJDEP to find a list of these contractors.
The suggestion by Lawrence Marz for sellers to have the tank removed before listing the house is a good one. If the seller refuses it is critical that you hire a licensed testing company to evaluate the tank and the soil. Also if you do not plan to remove the tank buy a $100,000 ProGuard tank policy that will pay you for clean-up cost if the tank leaks.
New Jersey does have in place a grant program that will pay $3000 for the removal and installation of another tank. If the tank is accessible by machine and it has not leaked the grant of $3000 will cover most of the cost. Even if the tank was found to be leaking NJ also has a program that will reimburse any cost beyond insurance coverage. Most people do qualify for the grant money. You can go on line to apply or hire a company like mine to fill out the paperwork and guarantee you will receive the grant money if we determine you qualify. There is also a program where the removal and installation of another tank can be done and the contractor will wait for the grant money.

The letter you are referring to is called a "No Further Action” letter or notice", often called an "NFA" letter. It is issued by the State of New Jersey Environmental Protection Agency. Whenever an oil tank leak is discovered, it is legally required that it be reported to the EPA. That filing then prompts a series of events that must take place. The prompt filing to the EPA of the fully and accurately completed paperwork is key to how soon they will respond with the much needed NFA letter. Of course the backlog at the EPA is also a major factor as well. I am told that if the contractor filing the paperwork to the EPA explains that a real estate closing is on hold waiting for the NFA letter, they will try and expedite the issuance. I think that 4 to 8 weeks from time of filing paperwork showing all work was completed is probably the earliest you can expect to see the NFA letter.

As far as walking away from the deal, check with your attorney and be very careful before making that decision. If the contract of sale and subsequent "attorney review" letters addressed the issue of underground oil tanks and potential remediation responses, that will govern what you legally can do without risk of financial exposure. Several years ago buyer clients of mine decided they did not want to wait for remediation and the NFA letter and backed out of the deal. Every situation is different, of course, but in this case they had their escrow money tied up for almost a year, and had to pay the sellers thousands of dollars for illegally breaking their contract.

I try to explain to sellers with underground oil tanks to remove them BEFORE they put their home on the market. It makes the home much more marketable, more valuable and reduces the risk of complications like this one.

I can't tell you how long it will take for the letter to be produced but I can say one thing. In my opinion if I were buying the home and now know this condition occurred I would obtain my own independent inspection and soil tests to ensure the job was performed properly. It would really be the pits to find out later that the company performing the remediation and/or testing did not properly clean it up or was found to be running their business irregularly and have issues with the final clearance letter. Keep in mind that the state or local official who is issuing any clearance approvals is only working on the documents they receive from the remediation/testing company and most likely are not checking it themselves.

Good luck!

Emmanuel J. Scanlan
PS Inspection & Property Services LLC http://www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
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CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!

It could take 6 - 10 weeks for the letter. Your mtg comapny will not close unless you have it. See if your mtg company will extend the mtg commitment period and rate, and at what cost. (you can ask the seller of the home to pay it, reduce the price, or credit it to you at closing)
If you love the house, it is worth the wait, just do not let the seller know hat if you are looking for that give-back.
Good luck