One of the biggest concerns purchasers of real estate in New Jersey have (from both a residential and commercial perspective) are environmental issues. Part of this stems from health concerns, and part of it stems from remediation costs concerns. While the potential environmental issues that can occur are vast, for purposes of this blog we are going to limit our attention to environmental concerns regarding underground storage (fuel) tanks (hereinafter referred to as “UST”) in the purchase of residential properties.
While USTs are becoming less common today than they were years ago as a source of heating residential properties, they still exists. This in and of itself should not be a cause of alarm, as if the UST is properly maintained, it can be as good a source as any for heating a home. However, USTs are problematic if they are not adequately maintained and fuel is either leaked when refueling the same or a whole in the tank. Such scenarios could result in fuel seeping into the groundwater – which can lead to possible health issues and be costly to remediate.
As a result of the forgoing many lenders are skeptical in terms of lending on properties with active or inactive USTs. Many times a lender will require that either (i) insurance be taken out on the UST in the event of a spillage or (ii) the tank be decommissioned and/or removed and the property be converted over to another choice of fuel. In either scenario, the cost can be expensive, and who will be responsible for such payment (especially the latter scenario) can often result in a deal being terminated. The lender’s position as to how the UST shall be dealt with varies from lender to lender.
The above is not raised to scare a person off from buying a home with a UST. Again, much more often than not there are no issues regarding USTs. However, when there are issues they can be costly and as such it is something that should be taken into consideration when a purchaser is making an offer on a home or a seller is contemplating a listing price for his/her home. It is also something that should be immediately presented by a prospective buyer to his/her lender when contemplating an offer, to see what if any requirements may result from the same. For more information regarding USTs you should seek out an attorney and/or mortgage broker.
The information in this blog posting is for general information purposes only. Nothing in this blog or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information in this blog is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.