The Green Monster
When I was appraising a house the other day I came across this fuel oil tank in the basement, which is slightly uncommon given where the house is located. I asked the homeowner about it, in which she replied, "You mean that dirty old Green Monster in the basement, we quit using that years ago."
So now it's gone from being just a fuel oil tank, to an abandoned fuel oil tank. So what is the appraiser going to do, well I'm glad you asked.
The MN State Department of Public Safety (State Fire Marshall) does have very specific guidelines for abandoned fuel oil tanks:
- The tank has to be completely drained.
- It has to be completely disconnected.
- Residential heating oil tanks don't need to be filled with an inert material, however, they do have to be permanently capped to prevent filling.
This is a truncated description, please see the following link for a complete set of guidelines.
So what does FHA have to say? Well HUD's handbook doesn't have any specific guidelines for abandoned home heating fuel oil tanks (see this link for HUD's guidelines) . So it's going to come down to being a safety issue, does the appraiser feel that this may be of some safety concern. It's very hard to argue that having an abandoned fuel oil tank in someones basement isn't a safety issue. Most of the time HUD has the appraiser refer to the state or local municipality for guidance. In nearly all instances when I've come across this, which isn't very frequent, I've conditioned the appraisal stating that the abandoned fuel oil tank be sealed or removed in accordance with state and local guidelines. Always bear in mind that the underwriter does have the final say, but no one is going to want to be responsible if something bad were to happen-like blowup!
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