Oil Tank Clauses: Contract for Real Property are specific clauses that can be used in real estate contracts that provide protection from liability for environmental damage caused by the existence or use of an underground oil tank. These clauses address issues related to the cost of remediation, insurance, and other factors associated with underground oil tanks. Types of Oil Tank Clauses: Contract for Real Property include: 1. Indemnification Clause: This clause outlines the responsibility of the seller or owner of the property for any costs associated with environmental damage caused by an underground oil tank. 2. Insurance Clause: This clause states that the owner or seller of the property must maintain adequate insurance coverage for any costs related to environmental damage caused by an underground oil tank. 3. Release Clause: This clause outlines the release of potential liability for environmental damage caused by an underground oil tank. 4. Inspection Clause: This clause outlines the responsibility of the seller or owner of the property to provide an inspection of the underground oil tank to determine its condition and any potential risks associated with it. 5. Disclosure Clause: This clause outlines the responsibility of the seller or owner of the property to disclose all known information related to the underground oil tank, including its condition, use, and any potential risks associated with it.
Oil Tank Clauses: Contract for Real Property
Description
Definition and meaning
An oil tank clause is a provision in a real estate contract that addresses the presence and condition of any oil tanks on the property. This clause typically includes statements regarding the seller's knowledge of existing underground tanks, their maintenance, and any potential environmental concerns associated with them. Understanding this clause is critical for both buyers and sellers to ensure compliance with environmental regulations and to avoid unforeseen liabilities.
Key components of the form
The oil tank clause generally includes the following key components:
- Seller's Representations: The seller must disclose any known oil tanks on the property and their condition.
- Responsibility for Decommissioning: The seller agrees to decommission any abandoned tanks at their expense before the sale closes.
- Environmental Inspections: The buyer has the right to request inspections to assess the structural integrity of any active tanks.
- Permitting Requirements: Sellers must acquire necessary permits and provide documentation prior to closing.
Who should use this form
This form is essential for property sellers and buyers in real estate transactions where oil tanks are present. Additionally, real estate agents, attorneys, and environmental consultants should utilize this clause to help ensure that all parties are protected from potential legal and environmental issues stemming from underground oil tanks.
Common mistakes to avoid when using this form
When filling out the oil tank clause, it's important to avoid some common pitfalls:
- Incomplete Disclosure: Sellers must be thorough in their disclosures regarding the presence of oil tanks.
- Neglecting Inspections: Buyers should not skip requested inspections that can reveal issues with oil tanks.
- Ignoring Permits: Failing to secure permits can lead to legal complications during the closing process.
- Outdated Information: Ensure that all representations are current and accurate to prevent misunderstandings.
What documents you may need alongside this one
In addition to the oil tank clause, consider preparing the following documents:
- Inspection Reports: Any reports related to oil tank inspections should be included.
- Environmental Assessments: If available, these assessments can provide context about the property’s condition.
- Permits and Certificates: Documentation of any necessary permits related to oil tank decommissioning.
- Property Disclosure Statements: These provide a full overview of property issues, including environmental concerns.
What to expect during notarization or witnessing
When finalizing the oil tank clause, notarization may be required to validate the agreement:
- Identification: Parties involved must present valid identification to the notary.
- Verification: The notary will verify the identity of the signers and ensure they are signing voluntarily.
- Signing Procedures: All parties will need to sign the document in the presence of the notary.
- Certificate Issuance: Upon successful notarization, a certificate will be issued confirming the act.
How to fill out Oil Tank Clauses: Contract For Real Property?
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FAQ
A residential fuel oil tank is generally 275 gallons. Some homes have two tanks, which are piped together to provide double the storage. Less common sizes, like 225 or 330 gallons, are also available.
There is currently no regulation prohibiting anyone from selling or buying a home with an underground oil tank in NJ. The fact of the matter is homes with underground oil tanks are less likely to sell as quickly as those with above-ground tanks or gas.
Petroleum Vapor Intrusion Petroleum vapors from leaking underground storage tanks have the potential to enter buildings, where they might pose a risk to the health of occupants. This problem is called Petroleum Vapor Intrusion (PVI).
Erosion And Scour Floodwater can erode the soil and backfill material or scour the soil that surrounds an UST system. Loss of the surrounding soil and scour may expose the UST system to damage, for example buckling and detached piping, that could lead to a release of product into the environment.
The greatest potential hazard from a leaking UST is that its contents (petroleum or other hazardous substances) can seep into the soil and contaminate ground water, the source of drinking water for nearly half of all Americans.
Oil tanks with a capacity of 3,500 litres or less should be fitted at least 1.8 metres from non-fire rated walls or from flu outlets.
Hazardous material storage tanks (active or inactive) must be properly managed due to their potential risk to human health and the environment. Spills or leaks may result in soil, water, or air contamination, fire or explosion, or chemical exposure. In addition, some tanks present a confined space hazard.
Determine whether existing tanks have leaks If underground storage tanks are found on your desired commercial property it does not necessarily mean you shouldn't buy the property. The main concern is whether the tank is leaking. If the tank is a newer double-walled model then the ESA will likely uncover leaks.
