10,000 gallons underground Kerosine tank. Deal breaker?

Phase 1 discovered this huge kerosene tank buried somewhere in the park.
Is this a deal breaker? Should I back out?

I have no idea. I’d likely ask the company who conducted the report for an estimate of potential remediation costs, and/or some other engineers for a ballpark estimate, and then figure it out from there.

An abandoned tank doesn’t necessarily have to be a deal breaker. I would think it just depends if it is still in use, how old it is, leaking, etc. I would speak with the owner and get more clarification as well as the environmental engineer.

buried since 1950. The seller doesn’t even know it exists.

Definitely would require some phase 2 work to quantify issue or lack of issue. You will need to do some test holes around parameter and send samples to lab to see if it leaked $2,000 to $5,000 ish. Then you will know if it leaked… if no leak tank could be abandoned per local deq regs. If it leaked then everything changes. All contaminated soil would need to be removed or remediated…

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Do you suggest seller paying out of his pocket to remedy before closing or give credit for remediation upon closing?

First off - really great job having a Phase 1 performed. This is exactly why you do them, and irrespective of the outcome here…kudos so that you can make an informed decision. With that said, this is a really sticky situation.

From the EPA website: “Until the mid-1980s most underground storage tanks (USTs) were made of bare steel, which is likely to corrode over time and allow UST contents to leak into the environment.”

So your phase 1 located a ghost tank. Damn. If you were to locate this tank on the property, it has probably already corroded and leaked whatever was inside…out of it. And if it hasn’t it will upon removal.

I could give you ideas how to find the tank, but this is pandora’s box. Don’t get yourself into a situation where you ask the Seller to dig into this and then they find out it’s 100K worth of remediation and they come after you for it.

The other thing that you need to look at it is whether the DEQ requires the removal of said tank now that you know it’s there. State laws vary a lot. The company that wrote the ESA should be able to give you some guidance on this matter if they did not already say so in their recommendations / conclusions of the report. If they don’t know find a local environmental attorney to give you guidance. Don’t disclose anything until you have solid footing.

Most deals these days don’t have enough upside to absorb remediation costs, so I’d walk away unless you are getting this for a steal.

Keep us posted…


You the buyer DO NOT close until the above named problem is totally resolved. Until you buy it, it is the seller problem even thought he was unaware of it. There is NO hurry to be in a major issue involving government–red tape can be very expensive.

Personally I wouldn’t touch this deal with a 10 foot pole…or 100 foot pole really. Good for you having a phase 1 done whether it was for the bank or peace of mind.

You have 2 options:
1: Run!
2: Order a phase 2 and have soil samples tested. If it comes back contaminated then it will have to be pulled out and remediated. Not sure how big the park is or the parameters of the deal but I’m willing to bet this won’t make sense. Tank removal won’t be terrible but the remediation and paperwork will kill you. Dirt is $12-15 per cubic yard to move in and out plus you have to take contaminated dirt to a designated fill site. You’re looking at a 16-24 month journey.

On the off chance this park is on well water, DO NOT buy it. Whether the water tests positive or not, that’s an enormous liability even if you converted to city water.

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not a deal breaker…have seller empty/remove it, or have it emptied, pressure tested and abandoned it per state law…usually filled with sand.

testing determines if it leaks and if it does, it could cost millions as the soil must be removed.
do homework. make sure everything is by the book…licensed remedial etc.
there may be state money to use.

A couple people have mentioned that the excavation being a burdensome cost. That’s actually the cheapest part of contaminated soil…

The expensive part is where you have chemicals injected in the ground to counteract the toxins released by the fuel into the soil and water table that an excavator can never reach. Then you have monitoring wells set up to periodically test the ground water to see if they have done their job. Resources, lab testing, chemicals, paperwork, dealing with the state - that is where it gets expensive. Depending on the extent of the leak this can be up to a decade of recurring work.

Just want to make sure you get the whole story. Good luck! :slight_smile: