Environmental concerns affect every area of our lives.
This is ever more evident in Real Estate, especially with Underground (Furnace Oil) Storage Tanks - also known as USTs.
There are thousands of old buried oil tanks in the Lower Mainland, and the B.C. Fire Code requires the removal of any buried tanks that have been inactive for more than 2 years. Each municipality has its own requirements, and checking with the local fire department will confirm how the regulations are applied. More importantly for owners, buyers, and sellers of real estate, however, is the fact that UST’s are considered as latent defects, and most banks & lenders may refuse to lend or advance funds on a property containing a UST – at least until the tank is removed with all of the permits and paperwork.
UST’s may not be obvious or visible – especially with older buildings - but they are usually easy to detect. Unless they have been contaminating the surrounding soils, they are relatively inexpensive to remove - costs for removal can be as low as $2,500. Once the tank is removed and the site declared free of contamination, the UST contractor will provide a report confirming that the UST has been dealt with according to requirements. In Vancouver, this report is provided to the Fire Dept and to the Environmental Services department.
If a UST has leaked, and the surrounding soils are contaminated, the property could be designated as a “Contaminated Site” under the Environmental Management Act of BC, and the EMA’s “Contaminated Sites Regulations” require the owner to remediate the property. This usually requires that an environmental engineering company oversee the removal of the contaminated material and prepare a report documenting the site remediation. Costs for this service may start at about $3,500, but can also run into the tens of thousands of $$ if the contamination has spread under buildings or on to neighbouring properties. The basic principle behind the Environmental Management Act is that “The Polluter Pays”, so that the liability for remediation can be traced back through the ownership history of a property, and be made the responsibility of owners who sold the property many years prior to the discovery of the contamination.
As a REALTOR®, I strongly advise owners to get rid of existing USTs asap, and definitely before listing or preparing to sell their property. An un-tended UST will lie in wait for the worst time to create a nasty, expensive headache for an owner, and Buyers will require, in a contract, that the owner remove any UST found. Removing a tank with the property under contract will complicate the transaction, and can also cause the lender to require additional, expensive investigations, such as a Phase 1 Environmental review. It might even kill the deal.
Environmental regulations continue to expand, authorities will demand more documentation and certification for UST removal, and this will cause more aggravation and expense. Acting early can eliminate the problem in an affordable & stress free manner.