"digging Up Old Gas Tanks"?
I was looking at a house for sale today and a cop pulled over and started to talk to me about the property. Turns out that he was interested in the property a little while back. While he was doing his research on the property he found out that there are old gas tanks buried in the ground. There used to be an old gas station on the lot.
He told me that he talked to the guy who bought the lot next to the one in question, and he had to pay around $55,000 to have some dug up and removed from his own property. Does this sound about right?
The house is banked owned. He said that the bank is playing dumb on the tanks. Wouldn't the removal of the tanks have to be disclosed?
Has anybody run across anything like this?
Sean [ Edited by wishbonejones on Date 04/12/2004 ]
Yes, $55,000 is a possible price for the removal of underground tanks. Insist on a phase one enviornmental survey if you think you might buy.
The bank is probably liable for the removal of the tanks before they can sell it. The EPA does not look kindly on title transfers of polluted property and will go back to all owners in the chain of title to pay for cleanup.
All of that is IF there are tanks there. Your cop buddy could be a competitor.
Removal of tanks can be expensive. I had a client several years ago who paid $10-12K for proper removal, closure, etc. of one residential tank.
I don't know what the lawyers would tell you, but I believe that if the bank knows there are buried tanks on its property, it must disclose. At the very least, i's a material fact.
I agree with commercial King. If there are tanks on the property then it can and will be expensive to clean up. The main scare factor being that there could be leakage and the soil around the tank would have to be removed as well to prevent more contamination. You can call a local environmental firm and get a ballpark figure. Just ask who handles there LUST/UST problems (Leaking Underground Storage Tanks/ Underground Storage Tanks)
You can also find out if your policeman buddy is correct by doing a simple title search on the property and get a history of who has owned the property.
There many ways to get around disclosing that there are tanks on the property legally, so dont expect the bank to tell you. If you were to sue them later, you would win but it wouldnt be worth the time unless you already had counsel on staff.
One last thing is that there could be gas tanks, and it not have been a gas station. Like heating fuel, propane, etc etc. You may want to talk more with your new friend and ask how he got the info or better yet have him show you the info so you can fax it over to the bank to reduce the price. If he is correct, you might form a partnership with him as he is apparantly good enough to do adequate due diligence, and he has access to state records, and state employees which could be extremely helpful.
Good Luck,
Kyle
In the top of the driveway you can see three of the hookups where they used to fill them up. I unscrewed one of them and it is filled with sand. So I don't think they are leaking any more. Do they still have to be removed?
If I brought it to the banks attention, won't they have to start the process of removing them? They can no longer play dumb on the issue. And there is no way that they are going to be able to sell the place if it is going to cost that much to have them removed.
Thanks for the responses. I'm going to research it today and find out for sure. Just thought i''d pick your brains a little bit more.
Sean
If they have been sanded, then it was temporary solution. They used to get away with that, and you could still buy it with them on there. You will however need to find out which environmental company did the sanding. If it was proffesionally done then they were cleaned out and sanded, which is a good thing, since there will be no leakage. But you will need a copy of the environmental report that showed what was done, and that it was given a clean bill of health. Ask the bank for a copy, since there are tubes sticking out of the ground, there is no way they can refute it. You didnt mention that before, it changes everything. Dont forget that you can use this as a negotiation to get the price lowered. Get three quotes for the removal and show them the largest to get the price down.
Kyle
[ Edited by KyleGatton on Date 04/14/2004 ]
Sean,If the property is worth it offer the bank $1.00 for the property. Tell them that you will pay for the tank removal and soil remediation if necessary. You will have to get a company which handles environmental cleanups to do the work. Knowing about the tanks could work in your favor.
Wishbonejones:
Back in 1997 legislation was passed that forced gas stations to install tanks
with a leak detection system. The old rule of "pre-existing non-conforming" did
not apply in this situation. To remove a tank properly, you could reach 100k easily. You will have to obtain permits from the Fire Department. You will have to hire a company to come out and pull the tank. The tank will have to be tested
for any residual product and then marked properly for disposal. There are only a limited sites where you can transport the tank to as well. The soil will have to be tested and if there is any contamination it will have to be removed and back-filled.
Did you notice in the late 90's or even recently that there were a lot of gas stations that suddenly shut down?
This was the reason.
I would recommend running comps on the property and then get bids to
pull and remove the tank. You can then
evaluate if it is worth it.
Best Riches,
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 04/14/2004 ]
Ok, so you've got a tank what comes next?
What you are eventually going to need is a Phase II enviornmental survey. Assuming that there are tanks there and that they used to be gas tanks this means that a guy will come out and drill cores around the tank and send the cores out for chemical analysis. This will make it possible to determine if the tanks have leaked or not. If they are full of sand and have not leaked then removal of the tanks is going to be relatively cheap. If they have leaked and contaminants or present then the cost of removal is going to be determined by how big the "Plume" is.
I looked at an industrial building once where there had once been a feather factory. They took feathers and fluffed them to down. Unfortunately they did this by pouring solvents through the feathers to remove the oil. They just let the solvents run off into the ground. 35 feet down the polution plume was still getting wider.
But they had a "no further action" letter from the EPA which said that the gvt. would not prosecute for cleanup as long as they never opened the floors. If they did then all the dirt removed had to be treated as a hazardous material and disposed of in a special dump.
I took a pass.
Thanks for all the priceless advice. I think I'm just going to move on to the next property. It sounds like way too much work for my first investment.
I appreciate all the quick posts.
Thanks,
Sean
Sean,
If you're really moving on why don't you send me the info on this deal (private message me). I like to deal with these kinds of problems.
Mark
By itself this language would not require him to put in any road at all-- mearly allow you to cross his land for an "Access easement". I think you need an attorney to represent you on this one. Easements are a bit complicated and Florida has some very specific laws regarding them.
I ordered survey, Once i have the survey done i will consult a rela estate attorney. Thanks for your reply
Thanks guys for all your replies. The land is 40 acres
in okeechobee county. I closed on the property last month but still waiting for the developer to put the roads. He said he will do it, But lets see.
[ Edited by alexanderwyoung on Date 01/29/2010 ]
Well its been a couple of years so my memory is fuzzy but I think Frank is wrong about not being landlocked in Florida. You will notice I mentioned this in my first post in this thread but FL has a very specific ordanance about land-locked property and easements, etc. This is in contrast to most states which fall back on the Common Law maxim that you cannot be landlocked.
The result is that yes, you can be legally landlocked in FL.
[ Edited by alexanderwyoung on Date 01/29/2010 ]