Underground oil tanks can hold staggering costs

When Marianne and Matthew Schottenfeld began thinking of selling their home in Waldwick, N.J., in early 2009, a real estate agent advised them to remove the underground heating-oil tank.

"We thought it was going to be pretty painless and inexpensive," Matthew Schottenfeld said. "But the contractor discovered that the tank was corroded and oil had leaked into the ground. It was downhill from there."

The Schottenfelds' Bergen County property is completely clean now, but getting it that way took more than $60,000 and 21/2 years. Although theirs was an extreme case, it illustrates the trouble such hidden tanks can create for homeowners, buyers, and sellers.

There are an estimated 120,000 buried residential oil tanks in the state, according to the New Jersey Fuel Merchants Association. That number has been shrinking as homeowners remove the tanks, either by replacing them with above-ground tanks or switching to natural-gas heat.

In many cases, a home sale forces the issue. Because of the tanks' potential for pollution, most buyers demand removal before the deal can go through.

"I haven't had a buyer in years who accepts a house with a tank in the ground," said Sheldon Neal, a Re/Max agent in Oradell, Bergen County.

Mortgage lenders and homeowners' insurance companies also are wary of underground tanks. As a result, many real estate agents advise sellers to deal with the tanks before they even put their houses on the market.

Sellers don't always know whether there are oil tanks on their properties because previous owners may have abandoned the tanks years earlier. If there's a question, home inspectors often look for such signs as old pipes or oil-feed lines in the house.

In the Philadelphia area, both in Pennsylvania and South Jersey, most oil tanks are above-ground and "nowhere near the concern" they are in North Jersey, said Roy Patterson, executive vice president of the Delaware Valley Fuel Dealers Association in Richboro, Bucks County, whose website offers information about residential storage tanks (http://is.gd/S28YEq).

"I have never seen it hold up a home sale," Patterson said Thursday. "The worst thing I've seen is that a buyer might ask that a tank be tested."

Homeowners should check with their fuel suppliers about individual tank-insurance policies and look into installation guidelines established by their state's Department of Environmental Protection, Patterson said.