Posted by David Krulac on December 22, 2000 at 18:59:08:
my point was not to discourage but to stress due diligence. Learn all you can, get help from knowledgable professionals, and if you feel comfortable, then you make that decision.
Underground Storage Tanks - Posted by TeddyB_SC
Posted by TeddyB_SC on December 21, 2000 at 23:35:21:
I am currently looking at a piece of property that was the site of a gas station. The business was closed in early 1973 and the building demolished. Since that time the site has been vacant. The underground storage tanks are still in the ground.
I checked with our state health dept and they told me that they do not regulate anything prior to 1973. Therefore, they have no control over them(said I could fill them in with sand, cement,etc.)
The property has been rezoned to rural residential. My concern is the water. The property has a well and the area is not currently served by our city water system.
If I have the water tested from the well and it is not contaminated, is safe to think that if it has’nt gotten contaminated in 27 years, that it probably won’t get contaminated.
If this property was 3 miles closer to town (and zoned commercial) it would sell for $75-100K. The seller is only asking $15K. I need some advice from people that have been through this. Thanks in advance for your help.
Don’t be victims of hype - Posted by ray@lcorn
Posted by ray@lcorn on December 22, 2000 at 16:05:46:
Hello all,
I hesitate to comment here because this is a topic that everyone has heard at least one horror story about. Yes, it is true that there are cases where the expense of cleaning up old tanks is horrendous. But just as the news media doesn’t tell us about the planes that don’t crash, there are many, many cases of underground tanks being removed at little expense,with no lingering liability. As evidence of this, there are even insurance policies available today for indemnification of liability after proper remedial action has been performed.
In the case of a station closed for almost thirty years, I would bet that the removal of the tanks will be routine. We just finished a project for a national pharmacy chain on the site of an old filling station, and were able to get not only clean title and a clean slate from the state agency after less than $5T in costs, but the developer also was able to sell the deal before completion.
So don’t automatically assume that tanks are the kiss of death. There are thousands of sites that can be bought for a song because of this exact perception. Be careful, of course, and always do your homework. Put contingencies in the contract to protect you during the remediation, and use competent legal counsel to do the CYA docs. you can often get property for pennies on the dollar because most folks think the worst, and the seller doesn’t know any better. There are even firms that specialize in nothing but these sites, and advertise nationally to find them, for just this reason. Think they might know something?
ray
Re: Underground Storage Tanks - Posted by David Krulac
Posted by David Krulac on December 22, 2000 at 08:47:41:
let me add to evrything said so far that the cleanup cost can be extremely expensive. if the soil is contaimiated it needs to be removed to a hazardous land fill just like radioactive soil. You are on the hook for liabilty FOREVER. Even if you are making a $million on the deal it still bears considerable thought before purchasing. The enviornmental cleanup can easily be $250,000. Besides the current well you may need to drill additional wells and core samples. The property may need to be fenced and the contamination contained. There’s a lot of easier ways to make money in real estate. This is not amateur hour.
Re: Underground Storage Tanks - Posted by Jim Locker
Posted by Jim Locker on December 22, 2000 at 08:05:41:
This is a dangerous property for you to purchase. The fact that there is no contamination at the present time means nothing, since tanks age and the liklihood of leaks increases with age. If contamination appears 20 years from now, and you are in the title chain, the EPA will come after you personally.
If you purchase this property, at a minimum you should have the tanks thoroughly flushed out THEN removed from the ground. Before filling the holes, have the soil around the tanks tested for contamination. If you find any, remove the contaminated soil. Then refill the holes.
Any other course of action is too dangerous to contemplate.
Caveat Emptor.
Re: Underground Storage Tanks - Posted by Brent_IL
Posted by Brent_IL on December 21, 2000 at 23:54:56:
By law, the EPA will hold you personally responsible for any claims for damages due to environmental hazard, plus the cost of clean up and tank removal. Forever. Even long after you?ve sold the property. That?s why it?s $15,000. Relatively little profit compared to the magnitude of the risk.
Ray, you’re right however… - Posted by David Krulac
Posted by David Krulac on December 22, 2000 at 18:51:47:
its not a novice territory, and there are easier ways to make money in real estate. There are many cases where there is an UST on a farm and removal is as simple as hiring a back hoe and taking lots of pictures. However, in many ways the 50 or 60 year old filling station can be a big problem. People did anything then including dumping dirt oil and gasoline into a pit in the ground. I’m seen old abandoned USTs that still contain gas, oil, diesel, or home heating oil and have not been in service for years and never were drained.
One horror story that I personally know about involved a service station from the 1930 on a two lane country road. The station was closed many years ago and the islands removed and the building remodeled into a nice cape cod house. There was no visible signs that this lovely house in a tranquil country setting was anything other than it appeared. A friend bought it at a bargain price after quickly doing a lein search on a Friday afternoon. But as the courthouse was closing he didn’t have time to research suits. He bought the property on Saturday paying the seller cash for the full price. Monday morning he found out that there was a lawsuit from a neighbor, alleging that gas from the never removed USTs had polluted there drinking well and had caused the birth defect of there child.
Re: Don’t be victims of hype - Posted by JohnBoy
Posted by JohnBoy on December 22, 2000 at 17:01:53:
I’ve also heard that on some of the older sites that were contaminated way back when may have had insurance coverage that would still be liable to pay for clean up costs. A lot of attorneys dig back to previous owners looking for insurance policies where they can go after the insurer to pay for clean up costs! Back then insurance companies didn’t have clauses excluding soil contamination.
Re: Underground Storage Tanks - Posted by TeddyB_SC
Posted by TeddyB_SC on December 22, 2000 at 14:09:24:
Thank You for the valuable info. I am definitely passing on this deal.