Real estate licensees and consumers may have many questions when a property has an aboveground or underground storage tank. Dealing with storage tanks can seem daunting, but the WRA and the Department of Agriculture, Trade and Consumer Protection’s (DATCP)
Bureau of Weights and Measures have collaborated to guide you through the sale of a property that has a storage tank.
What are the most common types of tanks found on residential properties?
The most common storage tanks found on residential properties are aboveground and underground storage tanks used for home heating oil and pressurized
LP tanks containing propane. The DATCP regulates underground storage tanks (UST) over 60 gallons and aboveground storage tanks (AST) over 5,000 gallons used to store flammable, combustible and hazardous liquids. The Department of Safety and Professional
Services (DSPS) regulates pressurized LP tanks. Inquiries about pressurized tanks can be made by contacting the DSPS directly at 608-266-2112 or dsps@wisconsin.gov.
How can I find out if there is a DATCP-regulated tank on the property?
The
Bureau of Weights and Measures maintains a public storage tank database that is available on the DATCP website. There may be some ASTs with a capacity of less than 5,000 gallons listed in the storage tank database, but those tanks are no longer regulated
by the DATCP. Although those tanks are not regulated at this time, the DATCP encourages property owners to submit updated registration forms if the tanks are removed so the database can be updated.
Must an abandoned storage tank be removed before the property can be sold?
The
presence of abandoned tanks does not prohibit the sale of a property. However, the buyer’s lender may refuse the buyer’s financing unless the storage tank is properly closed, removed or otherwise brought into compliance with state law.
Although
the presence of an abandoned storage tank does not prohibit the sale of a property, the buyer should be aware that the responsibility of the tank maintenance and compliance transfers to the new property owner upon completion of the real estate transaction.
Additionally,
the new owner must notify the DATCP of the change of ownership within 15 business days of new ownership using the applicable form. Property owners can obtain the applicable change of ownership form by contacting the DATCP.
What is required to properly close an abandoned storage tank?
Abandoned
storage tanks registered by the DATCP must be closed by a Wisconsin-registered tank specialty firm and a credentialed storage tank remover/cleaner.
A licensee has an upcoming residential listing, and the seller indicated that a pipe sticking up from the ground is an abandoned fuel oil tank. The pre-listing inspection confirmed there is a UST. The seller said they signed some sort of waiver 18 years ago when they bought the house without a REALTOR®. Is there a way for the seller to have a clause or waiver or a less expensive solution so they do not have to bear the cost to remove the tank?
The
property owner is responsible for any regulated tank on the property. If the tank remains on site and the property is sold, the new owner assumes that responsibility. Even though the tank may not be routinely inspected by the DATCP, it is still required
to be compliant with Wisconsin Administrative Code Chapter ATCP 93. If the tank is no longer in use, it must be permanently closed, and the tank registration must be updated with the DATCP.
A property owner removed a buried fuel oil tank, but they did not have the removal done by a licensed contractor. A licensee has a potential buyer for the property. Is there liability that the buyer would be assuming if the tank issue is not taken care of by the seller?
In
the event a registered residential tank went through an undocumented closure, the responsible party should contact the DATCP’s compliance team.
In most circumstances, a Wisconsin-registered tank specialty firm may be required to complete
closure paperwork, and the property may be subject to inspection by the DATCP. If this is not done prior to the sale of the property, the new owner becomes responsible for the compliance of the tank and any potential contamination upon completion
of the real estate transaction.
The buyer should also be aware there may be financing complications if their lender requires proper closure or removal of the storage tank before closing.
The licensee has a seller with an unused home heating oil fuel tank. The property was converted to natural gas, but the old fuel tank was left in the basement. Is that covered under item D6 on the Real Estate Condition Report? Does the tank need to be removed or can it simply be disclosed?
The
disclosure obligation in the Real Estate Condition Report (RECR) requires the seller to answer whether there are storage tanks on the property. If there is a storage tank on the property, the tank should be disclosed on the RECR. Item D6 on the RECR
provides the following:
“Are you aware of underground or aboveground fuel storage tanks on or previously located on the property? (If “yes,” the owner, by law, may have to register the tanks with the Wisconsin Department of Agriculture, Trade
and Consumer Protection at P.O. Box 8911, Madison, Wisconsin, 53708, whether the tanks are in use or not. Regulations of the Wisconsin Department of Agriculture, Trade and Consumer Protection may require the closure or removal of unused tanks.)”
ASTs
with a capacity of less than 5,000 gallons are not regulated by the DATCP at this time. As a result, unless the residential AST in question has a capacity of 5,000 gallons or more, removal would not be required by the DATCP.
What action must be taken when a UST is found to be leaking at removal?
Anytime a UST is closed or removed, and a suspected or obvious release is determined, a Tank Site System Assessment (TSSA) must be completed and documented on the DATCP Form TR-WM-140. In the event a release of product has occurred, the owner is required
to immediately report the release to the Wisconsin Department of Natural Resources (DNR). Any remediation is determined by the DNR.
Resources
As of October 1, 2019, the DATCP no longer enforces portions of Wis. Admin. Code Chapter ATCP 93 that conflict with Wis. Stat. Chapter 168. As such, the DATCP no longer routinely inspects ASTs less than 5,000 gallons, and tank owners are no longer required to register ASTs less than 5,000 gallons. Additionally, technician and company credentials are no longer required for any work on ASTs less than 5,000 gallons including installation and removal. Credentials are still required for work on ASTs 5,000 gallons and larger.