New Oil Tank Law Causes Dilemma For Homeowners

On the list of things some homeowners would like to ignore, unused underground oil tanks are probably near the top. But beginning Friday, that will no longer be possible.

And what if owners try?

Those hoping to sell their homes may find they can't until they deal with the ghost of a heating system past that's buried in their yard.

June 30 is the date the state adopts the 1994 version of the Uniform Fire Code as part of the State Building Code. In conjunction comes a new regulation that says underground oil tanks and piping that have been out of service for a year must be removed or abandoned in place.

Here's where things get confusing:

The fire code states that residential tanks can be abandoned in place (usually after being filled with concrete or sand) only if the local fire authority "determines that the removal of the tank is not necessary."

Those close to the issue generally believe this will mean leaking tanks must be removed, along with any contaminated soil, while tanks that don't leak can be left in place.

However, as Mike Spence, an attorney representing the Seattle-King County Association of Realtors, points out, the law actually provides "no guidelines for what criteria to use. So we have no idea from fire district to fire district what the chiefs are going to allow to stay in the ground."

What's more, fire officials in some jurisdictions - most notably Seattle, which has a lot of these tanks - say they have no plans to inspect them and thus won't be telling homeowners what to do.

Looking for help

Still, at the rate of a dozen a day, homeowners are calling the Seattle Fire Department for advice. Lynne Howard of the Seattle department says such calls "have been increasing. Clearly it's alarming to them."

Homeowners also have been calling tank-removal companies and real estate agents for advice.

"In the late 1970s, we had urea formaldehyde (insulation) to be concerned about; then, in the early '90s, everyone was hysterical over popcorn ceilings and asbestos," recalls Windermere broker Marcia Royer. "Now we've got underground oil tanks. It's difficult to know whether it's the issue of the mid-'90s or exactly what we've got."

Who needs to be concerned

Homeowners who are still heating with oil need not concern themselves with the new regulation.

Rather it's those untold thousands who converted from oil to gas, or who bought a home where that had been done by a previous owner.

How many unused residential oil tanks exist "no one really knows," says James Ulery, president of Seattle Tank Service. "But there was no residential gas in Washington State until 1956, and before that homes had oil, coal or electricity."

He says some years since then have seen 20,000 conversions to gas.

Ulery believes any home built 40 or more years ago likely could have had oil service. Most residential tanks were built to hold 250 to 500 gallons and last 30 years without leaking.

While Seattle fire officials neither inspect abandoned oil tanks nor require a permit to deal with them, other jurisdictions may.

Bellevue currently requires a permit, not of the homeowner, but of companies that decommission tanks. Unincorporated King County, Tacoma, SeaTac and Olympia are among the cities requiring homeowners to take out a permit. Edmonds' $25 permit is optional until July l; then homeowners will be required to have one.

Home sale may hinge on tank

Those wondering about their unused oil tank should call their local fire department to find out what local regulations apply.

Even if there are none, homeowners intending to sell may find they have no choice but to decommission their old tank.

That's exactly what happened to one Seattle seller, whose sale is closing next month.

"I had to deal with it; the buyers wouldn't accept the house otherwise," he recalls. They knew his home had an oil tank, last used a decade ago, because under a new state law sellers must fill out a disclosure statement about their property.

On the advice of his real estate agent, the Seattle owner got three bids from firms that remove oil tanks (they're listed in the Yellow Pages under Tanks-Removal). He paid one $700 to drain and rinse the tank, then fill it with a thin concrete called slurry.

"It didn't seem like I had an option," he says.

"Sellers are frightened," notes Windermere's Royer. "Often they converted to gas or electric 15 or 20 years ago, and nobody then said, `oh, by the way, you should have the oil in this tank removed.' Now they're concerned that maybe the oil has leaked out into the dirt.

"Often times we hear sellers say, `if you want to buy my house you deal with it,' " Royer adds. "But it's not quite that simple. Most potential buyers want this issue resolved before purchase."

Virginia Stewart, Phoenix Mortgage's vice president for underwriting, says the majority of lenders are probably going to require that an unused tank be decommissioned before approving the purchaser's loan.

"If we're aware of an abandoned oil tank on the property, we'll verify the law is complied with," Stewart says.

"But I don't know how this is going to be monitored," she observes, "because there are an awful lot of oil tanks in the Seattle area, and sometimes appraisers know they're there, and sometimes they can't tell."

How to find a tank

Likewise, owners of vintage homes may not even know they have an abandoned oil tank on their property.

How can they find out? Often an old oil line leads into the house. Sometimes title companies have such information. And Royer says it's possible to locate a tank with a metal detector.

Then comes the question of what to do about it.

Royer says, "the smartest thing is to deal with it up front rather than waiting until you get a purchase-and-sale agreement. Take care of it in the process of getting your home ready to sell."

A look at the costs

Seattle Tank Service's Ulery charges $600 to fill a tank with concrete, and $800 to remove a tank that's not leaking. If one is, and contaminated soil must also be removed and disposed of, that naturally increases the bill, depending on the severity of the contamination.

Ulery favors leaving a tank in place if it's under a house or entwined in the roots of a large tree. Otherwise, he recommends removal because "then it's ultimate and final. We don't warranty subsoil condition in ones we fill because we don't do any digging."

And that can be a problem. Windermere broker Royer says she's seen cases where owners have filled tanks with concrete, but potential buyers haven't been satisfied. They've wanted to dig down and test the subsoil anyway.

If there's any good news, it's perhaps this: Ulery says that tanks are usually dug out manually without the use of a backhoe. As a result, landscaping is preserved. "We transplant rhodies and cut the sod out and put it back," he says.

So the oil tank dilemma is resolved without the demise of prized landscaping.