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Underground Oil Storage Tanks

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Claudia Cullen

Sophomore Member
Joined
Dec 18, 2002
Professional Status
Licensed Appraiser
State
Massachusetts
Hi everyone,
I'm currently working on an assigment where the homeowner stated that there is a 1,000 gal. underground oil storage tank in his front yard. This is the first time I've come across this situation. I have the feeling that this could raise some concerns to lenders. I don't want to turn down this assignment since I will be able to learn from it.

What questions should I ask of the Building Inspector and or Fire Marshall? What adjustments (if any) should I make for the presence of the UST? I plan to speak with brokers to find out what, if any, impact the presence of an underground tank had on the sale of properties they listed.

Any and all help is greatfully appreciated!
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
Underground oil tanks were common. In my experience, unless the tank is leaking there is no problem.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Note it's presence and state that if further information is wanted regarding this situation, a professional environmental inspector would be necessary.

It's then up to the underwriter and you have covered yourself.
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Hi Claudia;

Exactly what Pam said. Be like Fox News, you report let them decide. I am mentoring my wife, (dont try this at home kids) and I tell her there is only one place in an appraisal where you express an opinon. That's the final opinion of value. EVERYTHING else is fact supported by research. Yes you could do alot of research and perhaps arrive at some adjustment, but there is much you could not know like leakage from the bottom of the tank etc. You dont have X-ray eyes and you may/will expose yourself to needless liability. there are companies out there with the means and the willingness to undertake a full investigation---- let the underwriter order that inspection.

Sorry for the long winded response to Pams good answer, but wanted to put my $0.02 in.

One of my guiding principals is that I do not take on more responsibilities than I contract for. For example I am not an environmental expert, termite, expert, housing inspector, etc. And yes if I see mud tunnels running up the foundation walls and along the floor joists. I would report that as follows
The appraiser has noted mud tunnels typical of termite activity.

I would probably take a picture of them. Point is you report what you see, let the LO or UW decide what to do.

Regards

Hal
 

xm39hnu

Senior Member
Joined
Jul 10, 2003
Professional Status
General Public
State
Florida
With regard to UST's, I would state,

The owner reports that there is a 1000 gallon underground oil storage tank in the front yard. The appraiser noted no stained soil, stressed vegetation, or other evidence of leakage or pollution in the reported vicinity of the tank. The opinion of value expressed herein is based upon the extraordinary assumption that this tank does not present any form of environmental hazard which would affect the value of the subject property.
Be sure to include a statement in your addendum which explains what an extraordinary assumption is, along with a disclaimer that you're not an environmental inspector or engineer. Also, check your local zoning and land use regulations to be sure such tanks are not outlawed. If they <are> outlawed, (assuming yours isn't "grandfathered") then the tank's presence may constitute deferred maintenance. If they're not outlawed, but your market shows a preference for homes which do not have such tanks, then you may want to assign functional obsolescence to the tank, and adjust accordingly.
 

Claudia Cullen

Sophomore Member
Joined
Dec 18, 2002
Professional Status
Licensed Appraiser
State
Massachusetts
Thanks everyone for your responses. Your advice has been great!
 

Ken-NC

Sophomore Member
Joined
Feb 21, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Page one of 1004, under Adverse Environmental Conditions:

"The home is heated with home heating oil and has an inground oil storage tank. The appraiser did not note any spillage or detect an odor that would be normally associated with a leak, however the appraiser is not qualified to determine this."

Works for above ground tanks as well. And if the home is no longer using the tank, just change the first part to, "The home was at one time heated with..."

How's that, all?

Oh, also, if the home is 30 years old or older and you're a real stickler for details, you should probably also comment on the fact that the typical lifespan for home heating oil storage tanks is approximately 30 to 40 years!
 
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