Buried Oil Tank – a previous owner’s risk?

Oil Tank - Buried

Buried Oil Tank costs previous home owners tens of thousands!

While this event may have been in B.C., the same principals may apply here in rural Ontario.  Any previous owner may be partially responsible for probable awareness of a latent (hidden) defect even after selling a property.

Disclose what you know and have proof of disclosure.  It’s likely better than burying your head in the sand and hoping for the best.

Want to know more?  Call The Oldford Team!  We’ve seen oil tanks above and below grade with leaks and almost-leaks.  We’ve worked with environmental remediation companies to help Sellers get these items corrected, and we’ve helped Buyers make sure that the proper environmental records are in place to ensure the purchase of a clean property.  Whether you’re buying in Winchester, North Dundas, Ottawa’s rural areas, or Ottawa property, no purchase is without risk – whether it be for the buyer, seller, or even a previous owner as the article below details.

The article below is courtesy of the Times Colonist: http://www.timescolonist.com/opinion/editorials/editorial-beware-menace-of-old-oil-tanks-1.1772045

When it comes to underground oil tanks, what you don’t know has the potential to cause you severe financial pain. B.C. Supreme Court Justice Randall Wong ruled Thursday, February 19th 2015, that current and former owners of a Saanich home with a leaking oil tank must pay the cost of cleaning up their neighbour’s property at a cost of between $60,000 and $120,000.

In March 2012, oil was discovered leaking into the Gorge Waterway from a storm drain at the bottom of Adelaide Avenue. Saanich engineers found oil coming through drainage tile on Gina Dolinsky’s property at 2837 Adelaide Ave. Dolinsky hired an environmental consultant who determined the oil was coming from a neighbouring property but couldn’t pinpoint the source.

In December 2012, more oil flowed onto her property and into the waterway. The Environment Ministry stepped in and found that the oil was coming from a corroded underground tank on the property at 2839 Adelaide Ave.

The tank, which contained 80 kilograms of sludge and 1,900 litres of oily water, was removed, as was nearly 13 tonnes of contaminated soil from around the tank. Gavin Edwards and Donna Wingfield, the current owners of 2839 Adelaide Ave., hired an environmental company to remove contaminated soil from their property and Dolinsky’s property.

Dolinsky turned to the courts to recover her costs. Last week, Wong ruled that Edwards and Wingfield must pay 15 per cent of the costs. Roberto and Crystal Rael, who bought the property in March 2012 and resold it a few months later after renovations, were ordered to pay 35 per cent. Balwinder Kaur Bal, who had owned the property from 1968 to 2002, was ordered to pay 50 per cent of the costs.

Bal had the old oil tank decommissioned in 1981 after the house was converted to electric heat. Her oil-supply company drained the tank and disconnected it from the house.

It’s the stuff homeowners’ nightmares are made of. To think that you can be held responsible for damages years after you have sold a property, even if you took the right steps to prevent damage, is downright frightening.

If a house in the Greater Victoria area was built before the 1960s, the chances are good that there was once — and still might be — an underground oil tank on the property. The property owner is liable for all damages if such a tank leaks, even if she or he was unaware of the tank’s existence.

And as Wong’s ruling illustrates, that liability potentially extends to the whole chain of property ownership.

The Victoria Real Estate Board constantly reminds agents to advise their clients of the dangers of hidden oil tanks, and urges that properties be properly inspected before changing hands.

Many municipalities require that unused oil tanks be removed or rendered inert — which usually involves filling them with sand. But removal appears to be the safest course, and does not cost substantially more. That cost could be from several hundred to a few thousand dollars, not a large amount, considering that cleaning up after an extensive oil leak could total more than the value of the property where the tank is located.

It would strike most people as unfair that a person can be held liable for a situation he or she had no knowledge of, even years after the fact. The Adelaide Avenue situation seems especially unfair, given that the person who owned the property from 2002 to 2012 couldn’t be found, and so escaped having to share in the costs.

It’s a cliché that life is often unfair, but true nonetheless. If you own a 50- or 60-year-old house, don’t go looking for fairness; rather, go looking for old oil tanks.



3 Responses to “Buried Oil Tank – a previous owner’s risk?”

  1. Scott Reading says:

    The cost of oil tank replacement with an above ground tank can bring the cost of the entire project to $2700. In the event that minor contamination has been detected, the total oil tank removal cost can be as high as $10,000 for clean-up, I got the info from this article, http://www.costevaluation.com/how-much-does-oil-tank-removal-cost/

    • Clayton Oldford says:

      Hi Scott,
      Thank you for your input. That’s an interesting resource that you have posted. In our experience, oil tank removal costs can vary from under a thousand dollars for an above ground tank to many thousands for a buried tank. If the tank ruptures or there is evidence of contamination found as part of the removal, we have seen associated cleanup costs climb substantially. In one case, an oil leak was not noticed immediately and the oil made its way to a ditch before being found. The subsequent clean-up costs rose into the hundreds of thousands of dollars.
      We strongly recommend that anyone removing an oil tank consult with a licensed company that will hold liability as part of the removal.

  2. damn cool tips and tricks thank you for sharing it

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