Residential underground oil tanks were common in properties across Ontario in the past. Used to store the fuel that would help heat homes, what was once a boon to residential neighbourhoods across the country is now a liability, especially if you plan on selling your house.
Due to their environmental risks and the onset of natural gas as a cleaner, safer fuel source, the province of Ontario mandated that, as of October 1, 2001, all steel underground oil tanks older than 25 years be removed from properties. If that’s not reason enough to invest in removal, then maybe knowing how they can cause your property value to tank will be. Here’s how a residential underground oil tank can affect the value of your home.
What is an underground oil tank?
Considering the large impact having an underground oil tank can have, let’s learn a bit more about the costly beast that beds beneath your property.
As previously mentioned, up until recently, underground oil tanks have been the standard for many residential properties for the last 70 years. The oil held inside was the fuel used to heat homes, which comes in handy in chilly Canadian winters.
Made of steel and able to hold between 275 to 1,000 gallons of fuel, these tanks would typically have a lifespan of roughly 20 years before they would start to break down and leak due to rust and corrosion. And therein lies the issue. Leaking even small amounts of oil into the local environment presents big problems, such as contamination of the surrounding soil and groundwater.
Luckily, natural gas proved to be safer for the environment and cheaper for homeowners, which is why it’s now the standard for heating homes.
How a residential underground oil tank affects your property value?
Considering the amount of damage an old underground oil tank can do to the environment around your home, it’s no surprise it can have serious negative effects on the value of your property.
That’s bad news for homeowners and anyone looking to sell. Here’s why…
Underground oil tanks leak.
Even though an underground oil tank is made of strong steel, various factors, such as weather and the oil inside the tank, can cause a leak. Because underground oil tanks are no longer a common part of residential infrastructure, any that remain are likely past their prime, not maintained and prone to leaks.
Even worse, some homeowners may not even know they have an underground oil tank or one that’s sprung a leak. This means harmful oil could have been seeping into the surrounding area for quite some time, which can affect the health of the homeowner and the surrounding environment. It can also translate into higher insurance fees because most standard home insurance won’t cover the cost of oil leaks.
Of course, if you have an underground oil tank, especially one that’s leaking, your property value will take a hit, meaning you won’t be able to sell at a higher price until it’s addressed. Suffice it to say; you’ll have to foot the bill for its removal and remediation, costs that any potential buyers definitely do not want to take on themselves.
The added costs.
Having an underground oil tank on your property not only poses threats to the environment but also to your bottom line. While you may want to sell your home for a highly profitable price, the added costs of dealing with an underground oil tank will quickly turn off anyone thinking of buying your property. Meaning your property value won’t be as high as it could be. So, let’s talk costs.
Location and removal.
Finding and removing an underground oil tank is no small task and requires certified professionals like the team at Waterline Environmental to get the job done right. Potential buyers will want confirmation whether there is or isn’t an underground oil tank located on the property. If there is, they will want further assurance that the costs of locating and removing the tank are covered by the homeowner before going forward with closing the deal.
There’s more to dealing with an underground oil tank than just the costs of locating and removing the tank. If it’s been leaking into the soil, it will need to be remediated. Once the tank is removed, the soil will be tested for contaminants, and if it exceeds the Ministry of the Environment’s limits, it will need to be removed and treated.
Again, this will be a cost potential buyers will want covered by the homeowner, so it’s best to invest the money ahead of time to protect your property value.
If an underground oil tank has leaked into the soil near a home’s foundation, that soil will need to be removed, compromising the support of the foundation it previously sat under. That’s why foundation underpinning is an important and necessary added step. This process ultimately stabilizes the structure itself or the soil it rests upon. Similar to the other costs mentioned above, homeowners will be expected to take this on before going through with the sale of their home.
While all these additional spends aren’t something most homeowners want to pay, they are necessary to maintain your home’s value and are a worthy investment.
Offputting to prospective buyers.
Considering the price tag that comes along with removing an underground oil tank, it’s no surprise that a property that still has one will drive away potential buyers, quashing any chance of a good sale.
For the many reasons detailed above, buyers will not want to take on the costs of removing an underground oil tank, at least not without knowing or without a substantial reduction in the asking price. That’s why it’s best for homeowners to address the location, removal and remediation of the tank ahead of time: not only does it prevent a hit to your property value, but it also protects you from potential legal headaches after the sale of your home.
Can you buy or sell a home with an underground oil tank?
While you can buy or sell a home with an underground oil tank, its existence should be disclosed to the buying party. Of course, this can result in the loss of the sale, which is why it’s recommended that homeowners remove the tank before the home is even listed on the market. Real estate agents should recommend this as well since it protects the value of the home and increases the chances of a good sale.
Protect your property value by calling Waterline Environmental for your residential underground oil tank removal and remediation!
While it can come off as a costly and inconvenient headache, removing a residential underground oil tank doesn’t have to be when you work with the experienced and licensed team at Waterline Environmental. We ensure the location, removal and remediation process is done right so that you or any new owners can enjoy the home for what it’s truly worth!
Contact Waterline Environmental
President: S.A. (Stu) Ferguson