500 Gallon Propane tank buried in front yard

[csoukup6]

I'm trying to purchase a home built in 2006. It has a 500 gallon propane tank buried in the front yard approx. 25ft from the home. This is a short sale and the original owners have vacated the property. The FHA appraiser has noted that a "tank" is buried in the front yard and now the underwriter is requesting it be inspected by a lic. Engineer to make sure its structurally good and under 100 gallons.

To me it sounds like the underwritter thinks this is a heating oil tank or something but its a propane tank used to heat the pool and power a generator incase of power outage.

I had it leak checked and safety inspected by the local gas company. The technican said the tank and equipment it powers are all in great condition with no leaks.

Does anyone know the guidelines for buried LP tanks for FHA. I'm a little worried this underwritter will want me to dig this thing up or something stupid like that.

 

[Ken B]

The FHA restriction is a 1000 gallon tank. The UWer is looking at an old, uncorrected document that was initially issued years ago.

http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502c2HSGH.pdf

The appropriate reference is found on page 2-12

 

[csoukup6]

The FHA restriction is a 1000 gallon tank. The UWer is looking at an old, uncorrected document that was initially issued years ago.

http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502c2HSGH.pdf

The appropriate reference is found on page 2-12

Thanks for the reply. So I'm under the 1000 gallons but does the tank need to be inspected by a Lic. Engineer for integratity or should a technician from the local gas company who is trained in servicing and inspecting the tank be sufficiant to satisfy this UW concern.

 

[Ken B]

It would be most unusual to require an inspection of the tank unless there was a reason to suspect an unsafe condition.

These tanks are often leased from whatever gas company installs and fills the tank. The property owner will not necessarily pay a rent for the tank, but will pay indirectly whenever they get a fill. If the UWer absolutely insists that the tank be inspected, I would first contact the company that fills the tank.

See page 5.

http://www.HUD.gov/offices/hsg/sfh/appr/aprval.pdf

 

[Smokey Bear]

I dunno, the presense of an UST (underground storage tank) would trigger a Phase II audit immediately on a commercial property. While there is an innocent buyer's defense in residential, I don't think that applies when you KNOW it's present. It's been years since I worked on Superfund at EPA, but I think it might need some checking since it's underground.

 

[Mr Rex]

They are fairly common in this area, and are typically dual wall due to being buried, some folks don't like the big honking tank in the yard. I have a 500 gal above ground LP tank in the side yard, but its pretty well hidden.

 

[Ken B]

This is not a commercial property.

 

[Ken B]

I had a buried 500 gallon propane tank in my last home. It is very common. There was a big hooplah a few years back, and in retrospect, I think it was VA, not HUD, who came out with a prohibition against fuel storage tanks larger than 100 gallons within a certain distance of the property. The error of their ways was quickly corrected and the tank size was increased to 1000 gallons. The concern, obviously, was not with tanks used for residential purposes, but larger tanks used for commercial purposes which might have substantial leaks and, thus, contamination.

On the bright side, if a propane tank develops a leak, the problem will be quickly identified by the first person who lights up a cigarette in the vincinity of the tank. No need to worry about ground water contamination there.

 

[Mr Rex]

Click on the little diagram for the distances:

http://www.propane101.com/propanetankdistancerules.htm

 

[csoukup6]

Thanks all for the input!