Furthermore, insurance companies are starting to drop homes with oil tanks. They don't want the liability.
In this market, with so many homes available, I wouldn't even consider a home with an underground oil tank unless the sellers agree to remove it. In the final analysis, they will have to remove it whether they want to or not if they want to sell the home.
And I must repeat, oil tank insurance policies are NOT sound protection. Once a tank is leaking, the EPA gets involved. And if there is an aquifer running under your house that needs remediation, your house may have to come down. Even if there was insurance that covered all this, which there isn't, who needs the aggravation?
On the other hand, there are hundreds of thousand oil tanks in use in the state, some of which are in-ground. Some sellers can be convinced to pull the in ground tank, others won't (or canâ€™t) do it. So you have the first issue, that of: do you want the property badly enough to assume the risk, if the owner does not yield the removal?
Insurance. You have had at least one negative report on the value of tank insurance. Within the last year, I have heard from a representative of the oil industry say that adequate insurance was easy to obtain. I have not found it to be so when calling oil dealers lately but truthfully, I did not press the issue.
You may also look into the cost of removal and decide if it is such that you are willing to take on the risk. I recently received a quote from Quick Environmental Oil Tank Specialists that was very modest and, in my opinion, low enough to be a way for someone to get the house they wanted at a reasonable total acquisition price. I have not had Quick actually do any work, so I am not recommending for or against them but merely pointing out a firm I know to be willing to respond with a quote. You will have to determine if you want to opt for them and that solution.
Having said all this, I would, of course, say that if you can convince the seller to take on the expense and risks associated with removing the in-ground tank and replacing it with a better system, you should do so. It doesn't hurt to negotiate for the best situation you can get, no matter what the issue. That's part of what Realtors do; attempt to get the best for their clients!
If it is a minor or non-issue, why hasn't the owner dealt with this situation and resolved the problem? Unless this is a very, very desirable property or you have plans that are unique to the property, the risk may be too great to move forward. Something only you can respond to..............
Be wary of the tests that indicate no leaks as I have seen first hand where tested tanks which were supposedly ok were not.
That aside, I would have the owner remove the tank. I have seen costs at about 5,000 without any problems to 10 - 12,000 with soil removal. You need to have an inspector look into it and give you a price.
There are a lot of home in NJ that have oil tanks and there is a remediation process if there is any issues.. you can have it looked at and make decision from there.
You should have the seller remove the tank or provide a valid closure certificate if it is no longer in use. You simply cannot buy a home with unresolved oil tank issues. If there is an aquifer on your property and there is a leak, the cleanup costs can run above $100,000.
FORGET OIL TANK INSURANCE. It's not worth the paper it's printed on. Many sellers and sellers agents will tell you not to worry, there is insurance. Don't listen.
Your agent and attorney will corroborate what I'm saying.
In either event, make sure that your rights with regard to the tank are spelled out during Attorney Review, and make sure that addressing the tank is the seller's problem, not yours.
Good luck, Jim