Underground Storage Tanks (USTs) and the New York Real Estate Closing.

No matter who your attorney is when buying a parcel of New York State real estate, s/he should ask you whether you have investigated whether there are (or were) Underground Storage Tanks serving the heating needs of the house (or a Phase I search in a commercial transaction).

An underground storage tank is a tank and any underground piping connected to the tank that is at least 10% buried underground. They were very popular during the 1970s as this area increased in population, and oil heat was cheaper than gas. The result, however, is hundreds of USTs rotting and leaking causing much litigation and consternation to buyers and sellers of real estate.

New York State is a “caveat emptor” or “buyer beware” state that requires little by way of disclosure relating to known and unknown problems. USTs are a commonly “unknown” and hard to find because they are literally a ticking time bomb buried under the lawn. If you or your real estate inspector finds an underground oil storage tank (UST) during a real estate purchase, you, as the potential buyer, should take immediate steps to ensure that the tank is sound (through a pressure test) or was legally and properly “abandoned.” If there is any suggestion that the tank is not sound, or that it was not officially “abandoned” you should demand that the Seller immediately abandon the UST before the transaction takes place. “Abandonment” involves licensed contractors sealing the tank and verifying that it was not leaking, or removing the problems if they were leaking. Demand that the Seller provide you with a “spill closure” letter proving that the tank was abandoned.

If the oil or fuel tank is found to be leaking, the owner of the property and any licensed contractors have a duty to inform the Department of Environmental Protection about the alleged “spill.” You can sometimes locate other homes or businesses that have had “spills” in your neighborhood .

Unfortunately, however, if no one catches the buried tank, any existing contamination will be the new owner’s responsibility under the New York State Navigation Law. If, you opt to keep the UST in operation after the sale, liability transfers to you (the buyer) when title is transferred.

The best piece of advice for buyers – particularly for those concerned with the presence of underground oil storage tanks on a piece of land – is to request an investigation of the property.

The bottom line– any remedial actions required to be performed must be completed before you take possession and title to the property.

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