Why are the Underground Oil Tanks so Dangerous?

Why are the Underground Oil Tanks so Dangerous?


Wells Peng


What is an oil tank? Why are there oil tanks under some houses in Greater Vancouver?


    In simple words, before 1960s most houses in Greater Vancouver were heated by burning furnace oil (with a few exceptions with coal). The oil was stored in tanks, usually of considerable size, and were buried underground in the front or back yard. When natural gas became popular, these tanks remained underground. Some tanks were emptied but some were not. Most older houses in Greater Vancouver have oil tanks.




Why did these tanks become a problem?


    Well, due to aging and the wet environment underground, corrosion eventually occur to these metal tanks, causing the remaining oil to leak. The soil becomes contaminated, and sometimes even the water source. The new Environmental Managing Act requires relocation of the contaminated soil when removing the oil tanks.



    How to find out if there is an oil tank in your back yard? Before digging up, there are some traces that MAY point to a tank, such as exposed oil tubes or gas tubes, or any parts of metal tubes in the back yard, front yard, or outside the house. However, these traces may be absent and is not a guarantee. In general, whether you see these traces or not, you should get professional inspection companies to do the job to determine whether there is an oil tank.



How to properly deal with the oil tank?


    If a tank is found, the procedure starts with the removal of the tank and inspection of the soil for contamination. Normally the soil besides the tank will also be replaced. These jobs can only be done by professional companies. After the job is done the related municipal authority will make an inspection and register that the problem has been properly dealt with.




 How much is the cost?


    In the late 1980s the cost used to be very affordable at around a hundred dollars. Currently the price starts at $2000, with most of the cases between $3000 to $5000. As the level of contamination increases, the cost may go up to tens of thousands. An owner should deal with the problem as soon as possible as delay may increase the level of contamination so the cost to fix the problem may go up dramatically---the worst case I know costs the owner over $100,000.


How serious is the oil tank problem?


    Some owners are slow to react with this problem. They either do not know the harmful potential of the problem or do not want to spend money. Unfortunately, this problem will usually become more and more serious, and the cost will escalate rapidly if the oil eventually contaminates the neighbor’s soil or the water source. Furthermore, if your house is found with an unsolved oil tank problem, it will be registered as so, making selling of the house nearly impossible. 



Why the new immigrants are more likely to neglect the problem?


    New immigrants are more likely to neglect the problem because they simply do not know the situation in a new place. It is then the realtor’s responsibility to give professional advice to their clients, or the clients may suffer serious loss. When a realtor is representing a buyer, the principle of “ask, inquire, confirm” must be carried out for the oil tank. That is, the realtor needs to ask the seller regarding the oil tank. If the seller is not clear about this issue, the realtor needs to inquire to the fire department or the ministry of environment to find out whether there is an oil tank and has it been removed and passed the inspection. If the seller confirms that the tank problem has been solved, the realtor needs to look at the related documents to reconfirm. Sometimes, it is most cost efficient that the buyer hires a professional company to do the inspection. 



Some words to the Buyers


    No matter how demanding the market is and how good the property is; the oil tank is a problem that can never be ignored. Signing a contract before finding out about this problem is very risky and is not recommended. Some sellers will take advantage of a serious buyer, leaving various problems behind for the buyer to deal with. If a buyer signs the contract without finding out all the possible risks, he may face endless trouble in a later date. Therefore, it is highly recommended that the buyer request the seller to deal with the oil tank problem before purchasing. 



 A real case


    I have been dealing with a seller and his realtor who are trying to hide the oil tank problem. Once I took a client to see a detached house in West Vancouver, and I noticed that the three-year new house has a much older foundation---this raised my alert immediately. I asked the seller’s realtor about the oil tank and he did not reply until the day of signing. On the signing day I insisted to add a phrase to the contract that the seller must confirm there is no oil tank problem and show the buyer document of proof. Then the seller’s agent finally admitted the existence of an oil tank. Fortunately, the problem is not serious, and the seller spent $6000 to solve the problem before my client sign the contract. Normally a three-year new house will not have an oil tank, and the problem will not be easily discovered without enough professional experience and responsible attitude of the realtor.


Oil tank and Mortgage


    The oil tank problem has been widely noticed recently. Currently the banks will usually not grant a mortgage loan unless the applicant can present a document of proof that there is not oil tank problem. The loan guarantee company also has specific requirements on this issue that must be met before they can provide any service. 

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