Propane/heating oil in all POHs. No gas line!. Good or bad? Should I walk away?

Essentially all POHs in this deal.
Every home has either propane tank or heating oil tank above ground.
No gas line I believe which is wierd as this park is in major metro area.

What are my options? having many fuel tanks sound like a ticking time bomb to me.

  1. stay with propane
  2. convert to all electric.

My concern is would it be harder to sell the home if I convert to all electric given higher electric bill for tenant? The park is in midwest.

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Are you concerned about maintenance or liability for explosions or what?

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Be sure to get a good Phase I as those heating oil tanks are a known source of potentially failing the environmental report. Often the residents or park owner don’t maintain them and let them leak for prolonged periods. Propane tanks – to my knowledge – are not typically pollution sources.

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I concern about liability once I acquire the park ; Leaking and explosion.

I plan to convert all POH to TOH so I’m wondering if converting propane heating to all electric heating would be unattractive to sell the home to tenant.

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I would say that it depends a great deal on your area to choose between propane or electric. As far as oil is concerned many insurance companies will no longer insure when oil heat is involved and others may require that all tanks be fiberglass. I required all my tenants that had oil to convert and all chose propane. Community owners should insist that all homes eliminate oil heating.
Metal oil tanks are certified for 10 years. If you have tenants using oil heating they should all be required to converted over to propane when the tanks reach that age. It is expensive for residents, they often can not afford the cost of a new furnace, but you simply can not take the risks of maintaining oil. Liability risk is simply too high.

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DO you know the cost of switching from metal to fiber glass?

Having been in the heating oil and propane business for 35+ years, and also a mhp owner here is what I have to say about that.

I have no fear of propane tanks. Propane is very safe when handled correctly. You can require evidence of a “leak check” by the propane supplier. Natural gas companies have a worse accident record than propane.

I do fear oil / kerosene tanks. In my MHP I do not accept or set up homes with oil/kerosene heat and am looking for how to get rid of the existing ones. An environmental survey is a very good idea and also inspecting the oil tanks to see they are supported on a non combustible base, are at least 6" above the ground, and show no signs of leakage or seeping.

I dealt with a lot of spills big and small when in the fuel business. I also had a 200 gallon spill in one of my mhps I didn’t know about until Encon had spill contractors on site which resulted in a $22,000.00 bill from Econ for which I was responsible jointly and severally along with my tenant and her fuel company.

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In my home state of Pennsylvania, the oil tanks can become an environmental issue for park owners. Oil heat is very common as are leaks from tanks. If reported to the EPA, remediation costs are in the $10,000 range. Insurance is available to park owners. We have many of these in our parks.

One solution may be to require all new tenants to use propane or electric furnaces and require existing tenants with oil tanks to acquire insurance. You, as the park owner, can backstop it by acquiring insurance of your own.

Jon

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My suggestion would be to convert to electric, then take steps to decrease electricity use in the home. For example:

  • I help my boss to manage his MHPs in Jackson and Buncombe Counties, NC. Both of these counties have programs set up to help low-income residents insulate their homes. The weatherproofing measures and the installation of storm windows goes a long way in reducing electric bills.
  • Install fans and instruct tenants how to use them (counterclockwise in summer, clockwise in winter). In the summer this will add windchill to the AC temperature so they can turn the AC up. In the winter this will push hot air down towards the tenants.
  • Regular maintenance of appliances and HVAC can also reduce electric bills. Using a fridge brush to clean out refrigerator coils, replacing the HVAC air filter, and cleaning out the ducts (take up vents, ShopVac with long nozzle) are some possible examples.
    Would be interested to hear what you all think along these lines.