April 8th - 2007

Underground fuel oil tanks: get the facts

Did you know that as of May 1, 2007, all existing fuel oil storage tanks (aboveground and underground) and associated appliances must undergo a comprehensive inspection?

Did you know that as of May 1, 2007, all existing fuel oil storage tanks (aboveground and underground) and associated appliances must undergo a comprehensive inspection? In addition to the requirement for annual maintenance (maintenance should also be in accordance with manufacturer’s instructions), a comprehensive inspection must be performed on all existing fuel oil storage tanks and associated appliances, at least once every 10 years; otherwise fuel oil distributors cannot supply fuel oil. Fuel oil distributors are required to prepare a report of each comprehensive inspection performed on a fuel oil storage tank and associated appliance(s) and to keep a copy of the most recent report.
 
If this is all news to you, then check out the revised Underground (Buried) Fuel Oil Tanks pamphlet that has been re-posted in the My OREA section of the OREA Web site at www.orea.com (click on the legal tab and then legal pamphlets). The pamphlet covers key matters surrounding oil tanks and where to obtain fuel oil tank information on specific properties.
 
OREA’s legal pamphlet was recently updated to reflect the new REBBA Code of Ethics and the new REALTOR® Code of Ethics. The revised pamphlet also reflects changes to the Ontario regulations and codes governing the handling and storage of fuel oil, as well as new information released by the Technical Standards and Safety Authority (TSSA).
 
Insurance at issue
REALTORS® need to be aware of the issues surrounding fuel oil tanks in order to protect their clients and avoid potential problems. When representing sellers with fuel oil tank issues or buyers who are purchasing a property that may contain a fuel oil tank, REALTORS® must ensure that they comply with the various sections of the REBBA Code of Ethics. And it’s not just breaching the Code that’s at stake. There have been cases where real estate deals have fallen through because insurance companies refused to insure properties with underground oil tanks. The Fuel Oil Regulation (Ontario Regulation 213/01) puts into effect strict guidelines for property owners to follow to help prevent the environmental damage caused by oil tanks leaking into the ground.
 
For example, fuel oil distributors cannot supply fuel oil to an underground tank unless it is registered with the TSSA. Regulations have also been established for when underground tanks must be removed or upgraded depending on their age, and even a tank that is no longer in use must be removed within two years of disuse no matter how old it is. October 1, 2006 was the first deadline for removal or upgrade of underground fuel oil tank systems aged 25 years and more as of October 1, 2001.
 
So far, tanks in the basements of homes (provided that they are free-standing and not in direct contact with backfill material), or above-ground, do not have to be registered and the legislation has not set an age at which above-ground tanks must be replaced. However, insurance companies still may not be willing to insure an older tank.
 
OREA’s SPIS (Seller Property Information Statement) contains several questions to help REALTORS® to identify the critical issues concerning fuel oil storage tanks. Standard real estate clauses to deal with fuel oil tank issues are also available in the Ontario Edition of the Provincial Reference Manual and in the Members’ Only section of the OREA Web site, under Forms, Real Estate Clauses.

Using the information from a completed Seller Property Information Statement, listing brokers will be in a position to advise their sellers as to what types of conditions and warranties to expect from buyers’ offers. Sellers who are reluctant to disclose information regarding their fuel oil tank or sellers with leak/spillage concerns should be strongly encouraged to discuss the potential liability issues with their solicitors. Buyers should be encouraged to discuss the potential issues with both their solicitors and their insurance brokers and, if necessary, to consider retaining the services of fuel oil tank inspectors.
 
OREA also offers continuing education courses on “Fuel Oil Appliance and Underground Tanks” and “Environmental Awareness for Residential Properties”. For more information, check the course listings in the Continuing Education section of www.oreacollege.com or contact your local real estate board to find out when the courses will be offered.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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