Updated October 2026.
Two pipes sticking out of the dirt next to the foundation. One is capped and about two inches across. The other is thinner and bends over at the top like a candy cane. If you're walking an older house in Traverse City this fall, in Central Neighborhood, Oak Park, Traverse Heights, over in Slabtown, or a farmhouse out toward Cedar or Kingsley, go look for those two pipes before you look at the kitchen.
That's a fill pipe and a vent pipe, and together they mean a heating oil tank is, or was, buried in that yard. A lot of houses up here burned fuel oil before the gas main reached their street, and out past where the main ends plenty of them still do. When a house switched to natural gas or propane, the furnace got swapped and the tank usually stayed put, because digging a 275 or 550 gallon steel tank out of a lawn is a rotten Saturday and nobody had a reason to spend it.
Steel in wet ground rusts from the outside in. Fifty years is a long time.
Why nobody catches it
Home inspectors don't look for these. A standard inspection covers the visible systems, and a buried tank with its lines cut in 1987 is not a visible system. If the seller doesn't mention it and you don't ask, it comes with the house.
The Seller's Disclosure Statement does ask. The form set out in MCL 565.957 has a line in its environmental section for "fuel or chemical storage tanks and contaminated soil," and a separate question about underground storage tanks. But the SDS runs on what the seller knows. An estate, or someone who bought in 2009 with gas already in the basement, can check "unknown" with a clear conscience, and I've written before about how much that form does and doesn't promise you.
What the state wants done with it
Michigan regulates home heating oil tanks under the fire code, not the environmental code. The rules are the Flammable and Combustible Liquids rules, R 29.5101 and following, written under the Michigan Fire Prevention Code of 1941. The commercial tank program in Part 211, the one that covers gas stations, exempts residential heating oil tanks outright. That's why there is no registry. You can look up the tanks under any gas station in town. You cannot look up the one under the lilacs on Webster Street.
The page to read is on LARA's site under Bureau of Fire Services, titled "FAQ: Home Heating Oil Tanks." It's short. A tank that's been out of service more than 12 months has to be pumped empty, the pipes emptied and capped, the tank cleaned, and then the tank and pipes removed. If pulling it would undermine a foundation, it can be closed in place, filled with sand, gravel or cement so it can't cave in ten years from now. A basement tank that gets removed needs its fill pipe blind flanged (a solid disk set into the pipe joint), so a delivery driver working off an old route sheet can't pump 200 gallons onto your basement floor. (I have not seen that happen up here. The rule exists because it has happened somewhere.)
A tank sitting in the basement doesn't count as underground, by the way. EGLE's homeowner brochure puts a basement tank in the aboveground category, even though it's below grade in every ordinary sense, and the LARA page says an aboveground tank can stay where it is once it's emptied and cleaned, provided it's secured and the fill ports are locked.
A soil assessment is required for tanks of 1,100 gallons and up and only "recommended" for smaller ones. Nearly every residential tank up here is 275 or 550 gallons. So the fully legal route for most of them is to empty it, clean it, dig it up, haul it to the scrap yard, backfill the hole and never sample what was underneath. The paperwork comes out clean, and whatever leaked in 1981 is still down there when you take title. The soil test is on you to order. Order it. If the hole shows dark soil or a sheen on the groundwater, the state wants a call to the PEAS hotline at 800-292-4706.
One boring detail that saves a phone call. Which EGLE district office handles a release depends on the county. Grand Traverse, Leelanau, Benzie and Kalkaska go to Cadillac. Antrim goes to Gaylord.
The FAQ also says to "contact the local authorities to see if any permits are required for tank excavating." Inside the city that's the Traverse City Fire Department. In the townships I don't know what each one wants for paperwork (some send you to the fire department and some to the building department), and I'd rather someone ask before the excavator is sitting in the driveway.
Who pays
Michigan does run a cleanup fund for leaking underground tanks. It pays up to a million dollars, with a $2,000 deductible for an owner with fewer than eight tanks, and it was built for the gas station on the corner. The statute's definition of an underground tank system leaves out any tank that stores heating oil burned on the same premises, which is yours. So if the excavation comes up smelling like diesel, it belongs to whoever owns the parcel that day, and the day after closing that's you.
Insurance is the part that catches people. EGLE's brochure says most insurance companies won't cover the cost of cleaning up a heating oil release, and suggests asking whether your carrier offers a rider. Given what Michigan homeowners insurance has done in the last two years, I wouldn't assume that rider is cheap, or that it's on offer at all. Ask your agent, in writing, whether the carrier will write a house with a known underground tank and whether the policy carries a pollution exclusion. Some carriers decline. Better to hear it in the first week of the inspection period than at the closing table, and it fits with the rest of the insurance headaches on older houses up north.
Cost
These are rough numbers from what I've seen quoted, not a bid. Pulling a residential tank that comes out clean runs a few thousand dollars including the hauling and the soil samples. A tank that leaked is a different category. Now you're paying an environmental consultant, soil disposal by the ton, possibly a groundwater question, and there's no ceiling on that. I don't have a reliable Leelanau County number for you and I'm not going to pretend otherwise. Call an excavator who has done a few up here and ask what the bad ones turned into.
Closing in place is cheaper, but you'll be explaining a filled tank to your own buyer someday, and they'll ask the same thing you're asking now.
How to check
Walk the perimeter and look for the two pipes. The fat one is the fill, and if the tank was retired properly its cap should be shut tight or the pipe cut off below grade. The skinny one is the vent. On a tank that's still in service it has a whistle in it so the delivery driver can hear when the tank is getting full. Sometimes the vent is gone and the fill has been cut flush and paved over, so look for a round patch in the sidewalk or a square of newer concrete against the house.
In the basement, look for copper line coming through the wall near where the old furnace sat (often two cut-off stubs about six inches apart, painted over), a second chimney thimble, or an oil stain that's older than you are.
Other tells, in no particular order, and EGLE's brochure lists some of the same ones: a patch of lawn deader than everything around it, stained soil, a ring of settled ground about the size of a bathtub, a whiff of fuel oil in the basement on a humid day, dead arborvitae on one side of the house only.
Ask the seller straight out when the house converted to gas and who did the work. Ask the fuel oil dealers that deliver around Traverse City if they have history on the address, because some of them keep route records going back decades. If any of that comes back as a maybe, hire a tank sweep. It's a person with a magnetometer walking the yard for an hour. It costs a couple hundred bucks, and it is the cheapest environmental test you will buy on this house.
Writing it into the offer
If there's an unexplained pipe and the house predates 1975, I'd make the tank its own contingency instead of folding it into the general inspection. Removal by the seller before closing, with soil samples taken from under the tank bottom and under the fill end, and the disposal receipt and the results in your hands before you're committed. Or a credit, and you handle it after. Either works, as long as somebody puts it on paper instead of hoping the tank is dry.
There's also a Michigan tool worth knowing about if the soil comes back dirty. Part 201 lets a buyer do a baseline environmental assessment, a BEA, which documents the contamination that was already there when you bought. Done correctly it shields you from liability for the last owner's mess. The timing is unforgiving. Under MCL 324.20126, the BEA has to be conducted before, or within 45 days after, the earlier of your purchase or your occupancy, and it has to reach EGLE within six months of that same date. Miss either deadline and the protection is gone. I'm not an environmental consultant or a lawyer, so take this one to your attorney before you waive anything.
I wouldn't close on a pre-1975 house with a mystery pipe in the yard without getting the tank out first. That's my line, and I'll hold it even on a house I love.
This is the same family of problem as radon and the propane question. It's cheap to ask about before you close and expensive to find out about in April, when the snow goes and the yard smells wrong.
If you're looking at an older place in town or out in the county and you see those two pipes, send me a photo. I'll tell you what I think it is and what I'd do about it before you write anything. Most of the time there's no tank and it's a ten-minute conversation.
Taylor Brown, Realtor
Taylor@taylorbrownrealtor.com
(231) 360-1510
