Thank Guys, yes it is in my agreement about not being responsible for in ground oil tanks however the buyers are claiming I missed the lines in the basement which lead to the tank and if they knew it before buying the home they would of had the owners remove the tank and my insurance broker had said that lawyers make a living through grey areas in contracts
I’m still not seeing the gray area… contract and SOPs say you’re not looking for tanks. Tell them to go pound sand. Our industry needs to stand up for ourselves and stop caving to these lunatics.
Joe Ferry (“The Home Inspector Lawyer”) did a great thing at a conference once. He told everyone to close their eyes and then asked a question - “How many of you have refunded a fee or paid money when you did nothing wrong per your contract and SOPs?” Presumably a lot of hands went up and he yelled “STOP DOING THAT. Every time you do a puppy dies.”
Seriously, our industry has gotten A LOT better at protecting ourselves but these freaks still try to shake us down. Don’t let them!!!
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Afternoon, John Dominick. Welcome to the forum.
Please describe, what used fuel oil in the residence. Heating, Hot water?
I ask because if you inspected a property with oil fueled appliances there is a oil burner, and an oil line would be connected to a burner. So you should be able to report an oil line.
As for a buried oil tank. The venders or past owners are liable. I do not see why your clients should point to you. Attorneys usually go after prior owners.
Does the seller declaration or listing for the home mention fuel oil?
95%+ of the time when I have heard of a buried oil tank it’s been abandoned.
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Whatever happens, please come back and give us an update. Too often these scenarios come to the forum but we never get to find out how it turned out. It can help everyone if you let us know how it went down and what the resolution was.
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Oil is used for heating on this home, the tank in the ground is now about 83 years old and oil tank excavation company indicated there was about 35 gallons still in the tank. They stopped using the tank in the ground many years ago and added a tank in the basement and then replaced the tank in the basement with a second tank in the basement. The owners claim they were
not aware of an oil tank in the ground, not sure if they filled out a disclosure or not when they sold it.
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Of course there are a lot of details unknown to us, but obviously if the sellers were the ones to have the initial tank installed in the basement, they knew about the one in the ground. How long have these sellers lived there?
Not sure if a disclosure statement is law in every state, but it is in mine. There are some instances though where the seller does not have to disclose much of anything, such as selling a property they did not live in (on behalf of a deceased parent for example).
@mfellman or anyone else.
I just checked my agreement. I use InterNACHI’s California specific agreement. We are not a licensed state so I reference that I inspect per InterNACHI’s SOP.
Here is the only line in my agreement that might apply to underground tanks (beside referencing the SOP): Unless otherwise indicated in writing, we will NOT test for compliance with applicable building codes or for the presence of or for any potential dangers arising from the presence of asbestos, lead paint, soil contamination, or other environmental hazards or violations.
Do you feel I’m protected in the OP’s scenario by the InterNACHI SOP and this wording in the agreement or should I add some additional wording to my agreement? I would love to see an example of what others include in their agreement regarding not inspecting or reporting on underground storage tanks 
Thank you for the reply.
A procedural question is, who is They, and why did They replace it? Likely the insurance company due to age.
You can apologize to your clients by saying you are sorry they are in this situation but it was through no fault of your own. Explain, just because there are abandoned oil lines does not mean there is a buried oil tank or I could see them during the inspection. The ominous is on the venders, current or past, to disclose buried oil tanks.
I still use the old original NACHI agreement with some modifications.
This is wording pulled from my PIA.
The Home Inspection report(s) does not cover (unless specifically stated):
- underground utilities * playground equipment * fuel tanks* the suitability of the property for any specialized use * wells/springs *
cosmetic items * drain fields * the market value of the property or its marketability * solar systems * security systems * personal property * the methods, materials and costs of corrections* underground items * sprinkler systems * cesspools * any component or system which was not observed * pools * central vacuum * appliances * life expectancy of any component or system * septic tanks * detached structures * water treatment * the advisability or inadvisability of purchase of the property * elevators * defects unobserved * code compliance * items not permanently installed * environmental hazards * fuel quality * chimneys/flues *the cause of the need for repair * The presence or absence of pests such as wood damaging organisms, rodents, or insects.
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I don’t specifically exclude them in my agreement, other than what NACHI states in the SOP and the boiler plate MN agreement.
That said, I am in an area where fuel oil was once very popular (I actually still use it myself as a backup to my off-peak electric heat). When inspecting an older home in my area, I am always on the lookout for signs of abandoned buried oil tanks. If the evidence is not visible though, there isn’t much you can do.
There are companies out there though that make a living from scanning for buried tanks. Probably wouldn’t be a bad add-on service for those of us in fuel oil heating areas.
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Not sure how long the present owners have been there, this inspection was done about 1.5 years ago
Below is part of my inspection agreement
- Systems, items, and conditions which are not within the scope of the building inspection include, but are not limited to: radon, formaldehyde, lead paint, asbestos, toxic or flammable materials, molds, fungi, other environmental hazards; pest infestation; security and fire protection systems; household appliances; humidifiers; paint, wallpaper and other treatments to windows, interior walls, ceilings and floors; recreational equipment or facilities; underground storage tanks, energy efficiency measurements; concealed or private secured systems; water wells; heating systems accessories; solar heating systems; sprinkling systems; water softener; central vacuum systems, telephone, intercom or cable TV systems; antennae, lightning arrestors, trees or plants; governing codes, ordinances, statutes and covenants and manufacturer specifications. Client understands that these systems, items and conditions are accepted from this inspection. Any general comments about these systems, items and conditions of the written report are informal only and DO NOT represent an inspection.
The insurance company originally indicated they will not cover the cost however then talked to the homeowner and decided to cover the cost of tank removal and backfill soil, still waiting to hear about if
they will cover soil cleanup if it needed
Wow! Who is your insurance if I may ask?
The tank removal and backfill won’t be too bad. Basically a day with an excavator and a load of backfill. Hopefully they don’t find that it has been leaking.
Good luck with that. It could cost thousands.
I just don’t see how you as the HI should end up with a claim on your record for this. Maybe I’m an oddball but I fight for the insurance company’s money as if it were my own. I’ve had to make one claim in 20 years and +/- 25,000 inspections for my company and it pisses me off to this day. It happened roughly 8 years ago and I absolutely HATE having it on my “record”. I fear getting elevated rates or canceled if I have something else happen. On a more global level I HATE our industry getting screwed by lunatic clients and their lawyers. Your contract and SOPs specifically exclude underground tanks. Why on earth would you be anything close to okay with making a claim for this??
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In his defense, he did the right thing notifying his insurance in my opinion. The potential cost here is too much not to follow proper protocol to the T. What his insurance did after that point I would think was out of his control.
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- A statement that the report does not address subterranean systems or system
components (operational or nonoperational), including:
(i) Sewage disposal;
(ii) Water supply; or
(iii) Fuel storage or delivery
Just cut and paste…
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