Underground Oil Storage Tanks (USTs): What You Need to Know
What Are Underground Oil Storage Tanks (USTs)?
Underground Oil Storage Tanks (USTs) are tanks buried underground that were commonly used for heating oil storage in homes built before 1957. While they were once a standard feature, many USTs have since been abandoned or forgotten. Unfortunately, these tanks pose significant environmental, legal, and financial risks due to potential oil leaks and soil contamination.
Why Should I Be Concerned About USTs?
Environmental Risks: Leaking or corroding USTs can release oil into the soil, contaminating both the property and adjacent properties. In extreme cases, contaminants may reach nearby waterways, exacerbating environmental damage.
Legal Liabilities: Under British Columbia’s Environmental Management Act (EMA), property owners—current and previous—may be held responsible for remediation if a property is deemed a contaminated site. The cleanup costs can easily run into tens of thousands of dollars.
Financial Impacts: Beyond the direct remediation costs, having a UST on a property can make it harder to sell or significantly reduce its market value.
What Are the Relevant Laws?
- BC Fire Code: Governs the handling and removal of USTs across British Columbia.
- Municipal Bylaws: Some municipalities have additional regulations requiring removal or in-situ treatment of USTs. Requirements and associated costs may vary.
- Environmental Management Act: Assigns liability for soil contamination to property owners and past owners unless specific exemptions apply.
What Happens if a UST Leaks?
If a UST leaks, the resulting environmental and financial consequences can be severe.
- Environmental Contamination: Leaking oil can infiltrate soil and groundwater, causing long-term damage to the surrounding ecosystem. In some cases, contamination can even spread to nearby waterways, as seen in the case of Dolinsky v. Wingfield, where oil from a leaking UST migrated downhill and into the Gorge Waterway.
- Legal Liability: Under the Environmental Management Act, both current and previous owners of a property may be held responsible for cleanup costs. This was evident in Dolinsky v. Wingfield, where multiple past and present property owners were found liable for cleanup costs totaling $123,000. Past owners may only avoid liability if they qualify for the “innocent buyer” exemption. To qualify, they must demonstrate that they conducted due diligence before purchasing the property, including investigating prior uses and ownership, and had no reason to suspect contamination.
- Joint and Several Liability: The law often applies a “joint and several liability” principle, meaning that any one responsible party can be held liable for the full cost of remediation, even if others share responsibility. For example, in the Dolinsky case, a couple who owned the source property briefly during the contamination period was held responsible for 35% of the cleanup costs, despite warnings from neighbors and officials.
- Negligence Considerations: Buyers who neglect to investigate the possibility of a UST, as well as sellers who fail to disclose known issues, can face significant legal repercussions. In Dolinsky, the court noted that the couple ignored warnings, failed to inspect for a UST, and waived the Property Disclosure Statement, all of which contributed to their liability.
What Should Buyers Know About USTs?
- Inspection Is Key: If you are considering purchasing a property built before 1957, investigate the presence of a UST.
- Property Disclosure Statements (PDS): Ensure the seller’s PDS is accurate and complete. However, even disclosed UST removal or treatment may require further investigation, as current legislation, not past actions, governs compliance.
- Protect Yourself: Work with your agent to include clauses in the purchase agreement making the sale contingent upon inspection and, if necessary, UST remediation.
What Should Sellers Know About USTs?
- Disclosure Obligations: Sellers must disclose any latent defects that render the property dangerous or unfit for habitation, including the presence of a UST.
- Pre-Inspection: Consider inspecting the property for USTs before listing it to avoid surprises during the sale process.
What Are the Steps for UST Removal or Remediation?
- Hire Professionals: Engage certified contractors to locate and assess the UST.
- Municipal Compliance: Ensure all removal or treatment procedures meet provincial and municipal regulations.
- Soil Testing: Conduct soil testing to determine the extent of contamination.
- Remediation: If contamination is found, follow the necessary steps for cleanup, which may include soil excavation and disposal.
Key Takeaways
- USTs pose significant environmental, legal, and financial risks.
- Both buyers and sellers must conduct due diligence regarding the presence of USTs and potential contamination.
- Professional inspections, legal advice, and clear documentation are critical to minimizing liability and ensuring a smooth transaction.
By staying informed and proactive, property owners, buyers, and sellers can mitigate the risks associated with underground oil storage tanks and protect their investments.
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