Oil Tank Leak in Basement - Impact on Value?

[redmg]

A Realtor friend bought a 250+ year old Victorian last Spring and proceeded to put $250K in renovations to bring it back to its' previous glory. It appraised for $850K. The house is beautiful.

He had the oil tank (located in the basement) serviced a couple of weeks ago and the filter was reinstalled incorrectly. He woke up in the middle of the night with a terrible headache, overwhelming smell of oil and a basement floor covered with a tanks worth of oil. The engineer he hired confirmed the oil had leaked through to the soil underneath. They are jack hammering his floor to remove the earth. He cannot presently use the home due to the oil oder. At the end of it all, he is suppose to get a cert that all is well. The oil firm is paying for all the repairs.

His question to me is will this have an impact on the value of the home and if so, how can this be quantified. He will have to disclose the accident when he goes to sell the home.

Your thoughts and input are appreciated.

 

[Tim The Enchanter]

Hopefully they clean it up 100% so you wouldn't know.
That way he can disclose they fixed it good.

If you don't have historic sales with similar issue,
I don't how you can quantify.
Maybe there's no stigma.

 

[Tom Woolford]

My experience with cat pee houses is that as long as the problem is remediated, there is no effect on value. If they never get rid of the stink, thats a whole 'nother critter.

 

[William Rightsell]

There was actually a home here that had an old unused oil filler pipe leading into the basement....tank had long since been removed and replaced with an underground tank. Oil company came by to fill the oil tank...and proceeded to fill up the "old" filler pipe....Long story short, the oil man pumped half a truckload of oil into the basement, went back, filled the truck- and came back to pump some more....:Eyecrazy:

Well..the house sat empty for 15 years...even AFTER the basement floor was jackhammered and dirt removed (same "fix" you mentioned)....owner tried a time or two to sell it I think (not positive about that). But it was uninhabitable...even after a dirt removal AND a new floor...Not sure if anybody lives there now or not.

todd

 

[Ray Miller]

Should be no problem once he has a certificate of remediation that all is well and done. I would assume they are going to do a complete clean up, replace the floor and dirt, replace anything that soaked up the oil.

Sounds like a mess and something that will cost tens of thousands of dollars.

I spent over thirty thousand on a property, that had less then a yard of dirt removed. But by the time all the certified work was done and inspected the bill was over thirty thousand dollars.

 

[Mztk1]

There was actually a home here that had an old unused oil filler pipe leading into the basement....tank had long since been removed and replaced with an underground tank. Oil company came by to fill the oil tank...and proceeded to fill up the "old" filler pipe....Long story short, the oil man pumped half a truckload of oil into the basement, went back, filled the truck- and came back to pump some more....:Eyecrazy:

Well..the house sat empty for 15 years...even AFTER the basement floor was jackhammered and dirt removed (same "fix" you mentioned)....owner tried a time or two to sell it I think (not positive about that). But it was uninhabitable...even after a dirt removal AND a new floor...Not sure if anybody lives there now or not.

todd

I had that same story told to me in an NAIFA course back in the early to mid-90s but the house was in NJ not NC.

Wonder if it is an urban legend?

The oil in the basement is not a question of "value" but of "marketability". The house currently is not saleable and until the basement gets a clean bill of health, no one who knows about it will buy it, and definately not with financing.

I lived in historic houses and restored them for years and years. It is possible, especially if he has a Yankee basement, that the dirt below the concrete is the famous red dirt used during the period (1700 to 1800s). If that is the case, and it can all get cleaned, the owner may be wise not to pour new concrete but look at it has a bonus by brining the house back even more in line with its original glory. We had a 1790 mansion - stunning - stayed in the family for about 10 years, and its basement was the red earth. The new owners were going to put a restaurant in it, dimly lit, colonial food, it was well equipped with a cook's fireplace - about 7 X 12 - and had gotten the permits and acceptance. We moved and I don't know if it opened. But those type of floors are desirable. Had them in a 1850s Victorian as well, but it was a true Yankee basement with 5' ceilings through most of it.

 

[murray stroupe]

At the end ,suppose to get a cert all is well

A Realtor friend bought a 250+ year old Victorian last Spring and proceeded to put $250K in renovations to bring it back to its' previous glory. It appraised for $850K. The house is beautiful.

He had the oil tank (located in the basement) serviced a couple of weeks ago and the filter was reinstalled incorrectly. He woke up in the middle of the night with a terrible headache, overwhelming smell of oil and a basement floor covered with a tanks worth of oil. The engineer he hired confirmed the oil had leaked through to the soil underneath. They are jack hammering his floor to remove the earth. He cannot presently use the home due to the oil oder. At the end of it all, he is suppose to get a cert that all is well. The oil firm is paying for all the repairs.

His question to me is will this have an impact on the value of the home and if so, how can this be quantified. He will have to disclose the accident when he goes to sell the home.

Your thoughts and input are appreciated.

=========================
Hope all turns out well;
& no one in that neighbor hood has well water.

Wonder if tomato juice would kill the smell;
it works on skunk smell.

 

[Mike Boyd]

5' ceilings in a restaurant? Is there a market for restuarants in your area for "little people?"

The oil tank in the basement must not be uncommon. I don't know whatever came of it but there was one in the city of Ukiah, Mendocino County that became a real issue. This was about 25 years ago. It was buried beneath a slab floor and the only way to get it out was to raise the house and move it out of the way, dig up concrete, remove the tank and excavate the dirt. Then the remaining soil had to be monitored for two years before the house could be moved back onto the original footprint. In the meantime, the owner quit making payments, the lender did not want to take it back because of the liability. Agents were sued, the lender was sued, the former owner was sued, and, curiously, the appraiser was never mentioned. Maybe his E&O carrier made a settlement. It was in court for years and may still be in litigation for all I know. The house was moved back onto its footprint and is now occupied. I don't know if ownership transferred or not.

 

[Tim Schneider]

I had that same story told to me in an NAIFA course back in the early to mid-90s but the house was in NJ not NC.

Wonder if it is an urban legend?

I think so, unless there are heating oil companys around the country doing the same thing, I've heard the story here too.

 

[William Rightsell]

I got curious...

Google "oil pumped into basement of home" - the search results have several articles from newspapers all over the country with stories just like this. Several in Virginai in the past few years....One in NJ. Never found the one I am referencing here in NC (this was close to 20 yrs ago).

The results look pretty legit to me. Quite a few cases of this happening. Interesting.

todd