I’ve heard of some people who have had problems with oil tanks and sewer issues when they bought homes. What do I need to know about these if I buy a house?

These are two items that require mini-inspections in addition to the general “whole house” inspection you want to get before buying any home. In real estate, all things are negotiable, and there are no set rules about who pays for what. However, these are two issues that have customarily come to be viewed as the seller’s responsibility, and in most cases, should a problem be found, the seller will agree to pay for repair and/or replacement. Can you count on it? No. But has it become the norm? Yes.

In older homes, it was common for folks to have used oil as their heat source and, particularly in the 1930s-1950s, they would have underground tanks installed to hold the oil for their furnaces. Unfortunately, we’ve discovered that over time the metal tanks rust and will leak, with oil seeping into the soil under or around peoples’ homes without their knowledge. This can represent a health hazard as well as a waste of money/oil. Before buying any older home, without explicit knowledge to the contrary, you should investigate whether or not an underground oil tank exists. The seller may truly not know. Some oil tank providers will search for free, but they are diminishing in number. “Tank locators” can go to the property and search for the presence of an underground tank, and this can cost roughly between $75-150. In the event a tank is found, and certainly if you already know the seller uses an oil furnace which is hooked up to an in-use underground tank, the currently accepted method to detect whether or not the tank is leaking is to sample the soil underneath and around the tank. You must contact a DEQ licensed oil tank provider to do this soil sampling. They collect samples of soil which are passed on to a DEQ approved laboratory to detect for oil contamination and the results are usually known within 1-2 days. Typical costs for soil testing run about $250 +/-. Obstacles to collecting the samples, such as rocky soil or the need to drill through concrete pavement can increase these charges. The Buyer will typically pay for the soil sampling, tank locators and any other “inspections” they carry out before agreeing to buy the home.

In cases where none or only a very minimal, trace amount of oil contamination is found, this is considered “non-detectable” and there are no reporting requirements. If the determination is made that exceeds this minimum standard (so many ‘parts per million’), then the homeowner is under legal obligation to notify DEQ. (Barring this notification to DEQ, there is no requirement on the homeowner’s part to “decommission” the oil tank.) DEQ will then notify the homeowner that they must have the contents of the oil tank pumped out and removed and “clean-up” the site. Years ago, this was a more unwieldy and expensive process, but this has become streamlined and made less expensive. Licensed oil tank providers are required to submit a report to DEQ and, often, the report can demonstrate that the amount of oil left behind presents no ongoing health hazard, and the site can be determined “cleaned up” without actually removing any soil or contamination. However, the tank itself will need to be “decommissioned” which usually involves cleaning out the inside of the tank and filling it up with a slurry mix or gravel. Depending on the size of tank and the amount of contamination, this can usually be accomplished from about $1,800 - 4000. (Decommissioning a tank that has not leaked will typically cost about $900 - 1,500 or thereabouts.) There are extreme and even catastrophic incidents involving contamination to neighboring properties and to the groundwater, but this is far more rare than not. Obviously, the costs for such cases can be quite large; one of the reasons you want to make sure to do this testing before you agree to buy the house.

In order for a home to be approved for financing by a bank, and unless you’re a Viking that doesn’t mind living in the arctic tundra, you will still need some sort of heat source. What will you do, then, if a leaking underground tank has been removed, but the furnace is otherwise in good working order? Most people will elect not to put another underground tank in the ground, to avoid the same problems in the future. The seller will be under some obligation to “make things right” in order to preserve the sale and keep the buyer, but not necessarily wanting to spend more than necessary. They will usually suggest to have an above-ground oil tank installed in place of the underground tank, which can then be routed to the same furnace. This would usually be installed in a basement or outside of the home on a concrete pad. Typical costs for this would usually be about $1800 - 2500 or so. Most buyers, however, would prefer to “start from scratch” and get a natural gas furnace installed. Typically, this would run about $3500-5000. What to do? Again, everything in real estate is negotiable. Often the Seller will agree to credit the Buyer what it would cost him or her to put in an above ground tank, and the Buyer would agree to pay the difference to have a new gas furnace installed in it’s place.

Times change, tests change. When I started my career as a real estate broker in 1995, hardly anyone “tested” underground oil tanks. It really emerged as a cottage industry in the late 90s. Similarly, up until four or five years ago, buyers did not routinely check the condition of the sewer system. Back then, we only verified that the house was indeed connected to the public sewer, and thought that was good enough. We’ve since learned that in time, sewer lines can crack or rust or develop other problems, often from the intrusion of aggressive tree roots, poorly done backfills of soil after sewer line installation, repeated clogs in the system due to flushing debris down the toilet, etc. So, for the last several years, sewer inspections have become de rigeur. Welcome to another cottage industry! J

Before buying a home, unless you have recent verification that the sewer line is in good condition, you want to have the line “scoped” by an experienced professional, usually an excavation company who specializes in this. Typical cost for a sewerscope is $100 +/-. This will determine if the line is in good condition or if repair or replacement is needed. Typical repairs might cost $750-1500 or so; typical replacement might be about $2,000-4000. If the sewer is a “party line” and needs to be divided, or there is a great expanse of line from the house to the street or other installation issues, the costs could go up. Better safe than sorry, so get the test done. The test normally takes about 15 minutes. If repair or replacement is required, a good, reputable company can usually get the work done and have it inspected by the City in less than a week’s time.

Most importantly, be healthy and happy in your home!

Zach Newman is an experienced, reliable and trusted Realtor in the Portland area. He is an agent for Re/Max Equity Group and he is a longtime member of PABA - Portland’s GLBT Chamber of Commerce. Call Zach at 503.287.8989 or visit his website at: http://www.equitygroup.com/zach.  

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