Home Buying in New Jersey>Question Details

daniel.perce…, Home Buyer in Hoboken, NJ

NJ oil tank soil remediation process....

Asked by daniel.percella, Hoboken, NJ Tue Jun 11, 2013

I'm in contract to buy a home in nj. The seller had an oil tank that was recently pulled out. Contractor doing the removal found soil contamination. They are performing tests to determine extent of contamination. Seller has insurance and is willing to pay for remediation costs. However, we are approaching the scheduled closing date and we don't seem anywhere close to the end of this process. Seller wants to escrow a worst case remediation cost value. I'm not sure if this protects me. And if I don't close, I lose my rate lock. To top it all off, we sold our home and can't push off that closing much longer. Thoughts? Advice?

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wait for the job to be done AND NFA letter issued. I had a cleanup of over $300,000 personally. It could even be worse. If sellers insurance doesnt cover all clean up where will you be? If your lender knew about the contamination they may be unwilling to finance. Have you asked/disclosed it to them?
0 votes Thank Flag Link Wed Jun 12, 2013
Speak to your attorney... I agree with Marc, it's hard to estimate a "worst case", but maybe you can rent the house until it's done and then close. That will solve your "where to go" problem, but not your rate lock. Rates are going up, it would be disappointing to lose that lock - maybe you can extend it. That costs money, but since it's a seller issue holding you up maybe the seller can pay that fee for you.

Good job getting the tank out before closing!!

Best of luck to you,
Jennifer
0 votes Thank Flag Link Wed Jun 12, 2013
No, no, no. Do not close until the property is fully remediated and there is an NFA letter from the DEP. There is no"worst case" escrow big enough to cover the worst case. I have heard of cleanups that run into the millions. Leaks can run into aquifers or under adjacent properties.

My advice is do not close until the property is clean and documented. Period.
0 votes Thank Flag Link Tue Jun 11, 2013
Hey Daniel,
Yes, this can be a long process. The problem is that you sold your house and you need a place to move into...I believe that the grounds can be cleaned, it will cost money, but the seller is paying for it.. After the cleanup they will have to take further samples to make sure it is OK.
The biggest wait can be getting an approval from the DEP..
I believe that if the seller is willing to put money in escrow, you should be OK.
Find out from the contractor how much it will cost for the clean up worst case scenario, and then add another 10-15k to be safe, but i would also have your attorney draw up a letter stating that the seller is responsible for any cost, repair, damage, fines, incurred due to the oil leak in the ground.
Also make sure the neighbor property has been checked for any leakage from the sellers oil tank.
On many policies, the insurance covers the neighbor on the left and right but not the actual property...Once you get the paperwork from the DEP you should be OK..
If you like the house, and don't want to lose your rate lock ..it can be a hard decision...
Find out what will be your new rate, if it will the same and you will feel more comfortable , then wait..
good luck
0 votes Thank Flag Link Tue Jun 11, 2013
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