Is There an Oil Tank Buried Next to That Old Traverse City House?
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.
Michigan also has no state fund that pays to clean up a leaking home heating oil tank. A few states do. Here, 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.
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 concrete. A basement tank that gets removed needs its fill pipe blind flanged, 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 soil assessment is required for tanks of 1,100 gallons and up and only "recommended" for smaller ones. Nearly every residential tank is under that line, which means 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.
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, and I'd rather someone ask before the excavator is sitting in the driveway.
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. 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.
Insurance is the part that catches people. 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.
How to check
Walk the perimeter and look for the two pipes. 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 a copper line coming through the wall near where the old furnace sat, a second chimney thimble, or an oil stain that's older than you are.
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.
Then put it in the offer. Removal by the seller before closing, with the disposal receipt and the soil results handed over at the table, 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.
This is the same family of problem as radon and the propane question. It's cheap to ask about in September 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.
Taylor Brown, Realtor
Taylor@taylorbrownrealtor.com
(231) 360-1510
