If you’re a New Jersey homeowner looking to sell a house that still has an underground oil tank or one that was filled and “abandoned in place” years ago, you may be in for a surprise. What used to be a common way to decommission tanks is now a red flag to buyers, insurers, and lenders. In this guide, we’ll explain why oil tanks matter, how New Jersey regulations have changed, and what you can do to protect your home’s value when it’s time to sell.
⚠️ Why Are Underground Oil Tanks a Problem in New Jersey?
In the mid-20th century, oil heat was common in New Jersey. Thousands of homes were built with underground storage tanks (USTs), many of which remain today. These steel tanks corrode over time and can leak oil into the soil, causing environmental hazards that require cleanup.
Even a small leak in New Jersey can cost tens of thousands of dollars to remediate. If your tank has not been removed or properly documented, the liability is yours. The signs of a leak are not always obvious. Some sellers attempt to show clean boring samples to prove there’s no contamination, but that approach may not be accurate. Many tanks develop pinhole leaks at the very bottom, and those leaks often go undetected until the tank is removed and soil samples are taken directly from beneath it.
🚫 What About “Abandoned in Place” Tanks?
For years, the standard was to decommission tanks by draining and filling them with sand or foam. That method is no longer accepted. Today, most buyers and attorneys expect any tank to be removed from the ground.
A filled tank can still leak. Unless it is removed and tested, there’s no way to confirm whether it leaked. That uncertainty can cause problems with mortgage approvals and insurance coverage.
If your tank was filled years ago and you were told it was acceptable, that advice may not apply today.
🧾 Real Stories: What Can Go Wrong
In my experience working with sellers in New Jersey, I’ve seen often how oil tanks interfere with real estate transactions.
📍 Example: Hawthorne
I had a listing in Hawthorne where I advised the seller to remove a tank in the driveway before listing. He declined. We found a buyer, but they backed out during attorney review due to the tank. The seller later listed with another agent, and the property sat on the market for nearly a year. Eventually, he removed the tank and was able to sell.
📍 Example: Rutherford Foreclosure
I also handled a foreclosure in Rutherford where an underground tank had leaked. The sale was delayed six months due to scheduling the removal, soil remediation, and approval from the New Jersey Department of Environmental Protection. The situation created delays and complications.
These cases are common. Ignoring a tank issue often leads to delays and loss of value.
🏗️ Do You Have to Remove the Oil Tank to Sell?
New Jersey law does not require tank removal before selling. But in practice, most deals fall apart if the tank remains. If you have a buried tank, even one that has been decommissioned, you should consider:
- 🧹 Removing it before listing
- 🔎 Getting a tank sweep if you are unsure whether one is present
- 🛠️ Hiring a licensed tank removal contractor
- 🧾 Obtaining permits and closure reports
Removing the tank in advance gives you more control over the process and pricing. It can also help you avoid rushed decisions and strengthen your position during negotiations.
📄 What About Oil Tank Insurance?
Some New Jersey homeowners have purchased oil tank insurance to help cover removal or cleanup costs. However, this insurance has strict limitations. It generally only applies if you keep oil heat and switch from an underground tank to an above-ground one. If you plan to remove the tank and convert your home to gas heat, that change usually voids the coverage. Many homeowners assume they are protected, only to find that the policy does not apply when they upgrade their heating system.
Before relying on oil tank insurance, carefully review the policy terms and speak with your provider. Assuming you’re covered can lead to unexpected out-of-pocket expenses.
💸 What If You Can’t Afford Removal?
If you are on a limited income or cannot pay upfront, you still have options:
- 🤝 Sell as-is to an investor experienced in environmental issues
- 🏦 Use home equity or financing to cover costs
- 🔄 Work with a hybrid agent-investor who can help you compare listing and direct-sale paths
New Jersey once offered grants for tank removals and cleanups, but that program has ended. Homeowners are now responsible for these costs.
✅ Final Thoughts
If you’re planning to sell and suspect or know there’s an underground oil tank, act early. Buyers may walk away, and the tank could reduce your sale price. Whether it’s a leaking tank, a filled one still in the ground, or uncertainty about what lies beneath the property, addressing the issue early protects your equity and timeline.
I offer consultations, tank sweep referrals, and multiple options for selling. Let’s figure out the best path for your home.
📞 Contact me today to talk about your options and get your home sold.
