If Chicagoans find oil buried beneath their property, odds are they won’t get rich. In fact, the discovery could end up costing them at least a few hundred dollars.
That’s because oil is probably in a storage tank, left over from the days when the home was oil-heated. Many homeowners never know what lurks beneath their lawn until they’re ready to sell their home.
Especially if a home is older-say, 40 years or more-a mortgage lender is likely to require an environmental audit be conducted before granting a buyer a loan to purchase the home.
“Each lender has his own rules about when they require environmental audits,” notes Prince Williams, president of Axiom Mortgage Corp., a mortgage brokerage in Evanston.
“Lenders are afraid that the cost of the cleanup could force the homeowner to abandon the property, and they’d be stuck with the problem,” notes Donald Peck of Peck & Associates, a Blue Island environmental consulting firm.
Even if the lender doesn’t require an audit, homeowners are required to disclose the existence of a tank-if they’re aware of one-to a potential buyer under the Illinois Residential Real Property Disclosure Act, which went into effect last fall.
If you plan to put your home up for sale, you can eliminate hassles by removing the tank now, rather than waiting until a prospective buyer demands it.
“Many people are in a hurry to remove the tanks, because the sale of their house hinges on getting the job done within a certain time frame,” says Steven Tsarpalas, of Tsarpalas Enterprises, Inc., a Grayslake tank removal company.
How do you know if you might have a buried tank that might still be partially filled with oil?
“If you can smell gasoline or petroleum around your house, or especially near the fill pipe, which is a pipe that protrudes from the house where the oil truck would hook up, then you probably have a tank that is leaking,” explains Steve Young, staff attorney with the National Registry of Environmental Professionals in Glenview.
Other telltale signs, says Tsarpalas, include patches of lawn where grass won’t grow or unidentified oily smells.
Experts say that most abandoned tanks are probably leaking, at least a little. That’s because the life of the steel tanks is about 25 years, and many of them have been in the ground much longer than that.
The prospect of a leak and possible environmental contamination can strike fear in the hearts of homeowners.
“Most people who call and inquire about tank removal don’t even give me their names initially,” Tsarpalas says. “They are afraid they will be reported to the Environmental Protection Agency.”
That fear is largely unfounded. “The EPA doesn’t really concern itself with residential properties,” Peck says.
Adds Jim McCaslin, director of petroleum chemical safety for the Illinois fire marshal’s office: “Residential tanks don’t even have to be registered, just commercial tanks. Residential tanks are not under the law at all.”
However, McCaslin notes that some municipalities ask homeowners to remove the tanks, as does the Chicago Department of the Environment.
Actually, the most serious threat from an underground oil leak is if the area uses well water and the oil contaminates the water supply. Then, homeowners can be liable under environmental and clean-water regulations for very costly cleanups-sometimes running into six figures.
It’s a lot cheaper to remove the tank, which can run from $1,000 to $5,000, Young estimates, with the more costly removals involving chopping up a patio or digging out the tank manually because the area is too small to accommodate machinery, Tsarpalas says.
Tanks can be “abandoned in place,” or cleaned and filled with an inert material, such as a lightweight concrete. Experts usually don’t recommend this strategy, though, because the cost of removal is often not much more than the expense of abandonment.
Don’t look to your current homeowner’s policy for coverage on tank removal, because in the last five years nearly all homeowner policies exclude environmental hazards, including tanks, says Bill Reynolds, a partner with ISU-Cassady, Neeser & Brasseur, an Oakbrook Terrace insurance consulting firm.
However, if there is a leak, and you can prove that it started several years ago, you may be able to cover it with the insurance policy you had at the time. “The courts have interpreted in favor of the insured,” Reynolds notes.
Still, getting your old coverage to pay may involve hiring a lawyer-an expense that may run as much as removing the tank.
And even if you’re an accomplished handyman, you shouldn’t save dollars trying to do the job yourself. “It might be a weekend project to remove the tank, but once it’s out and it hits the public way, you are opening yourself up to more trouble,” warns Alan Berkowsky, division chief of the Evanston Fire Department.
“We had one family who removed the tank and then put it in the alley. It was turned over and the oil leaked. . . . It turned out to be a very expensive cleanup.”
Because vapors from the tanks can easily ignite during a removal, most municipal fire departments want to be on hand during the removal. The fire department recommends using an expert to do the job (see the Yellow Pages under “Environmental”).
If you’re still heating with oil and using a tank, you probably don’t have a leak problem, says Richard Greenberg, president of Environmental Waste Management Associates in Wayne, N.J. That’s because a hole in the tank would let water in, and you’d be having difficulty getting the burner to ignite.
The Illinois Petroleum Association says tanks are now made of corrosion-proof materials, and by 1998 all tanks must also have controls to prevent spillage as they are being filled.
