Consumers buying or selling a property must carefully consider many issues, including location, condition, and history. And although a great-looking location may make a property attractive, buyers do not want to see property values fall because of unknown environmental dangers or restrictions.
Each year, the New York State Department of Environmental Conservation (DEC) Spills Hotline receives approximately 600 calls for petroleum and chemical spills in Region 6 alone. DEC often finds out about spills after the fact from new property owners.
“It is amazing how many retail gas stations have either been abandoned or converted into residences in the north country,” said Matt Duffany, regional spills manager.
For example, in Theresa, N.Y., a homeowner noticed a strong smell of gasoline vapors in the house every time it rained. She discovered that 30 years ago, the house was a gas station and the old gas tanks were still buried on the property. These tanks were corroded and leaked gas into the soil and created the vapors.
In another example, the drinking water wells of multiple residential properties were contaminated with gasoline from a station that hadn’t operated since the 1960s. In both cases, the DEC spills team oversaw the cleanup and excavation of the contaminated dirt to protect the groundwater.
“Due diligence is vitally important in this day and age. Potential buyers should do their part to determine if there has been a release or a spill onto the property. Buyers that purchase a property with tankage, piping, or appurtenances—knowingly or not—may not be responsible for the release of contamination, but as owners are potentially legally liable for the cleanup,” said Duffany.
A property without potable water is not as marketable and may not be eligible for bank financing. Even seemingly familiar parcels may present issues. Sites where people stored petroleum, such as gasoline for lawn mowers or fuel oil for heat, could have experienced a spill. In some cases, people who inherited property that has been in the family for years may learn about an unresolved environmental problem or even a lien when they attempt to obtain a mortgage or line of credit.
DEC encourages all prospective buyers to submit a Freedom of Information Law (FOIL) request about a property’s history before making an offer to purchase. FOIL requests can be submitted electronically by going to www.dec.ny.gov/public/373.html. The request can simply ask for any DEC records about the parcel in question by identifying the parcel by street address, current owner name, and any former owner’s name if known. A FOIL request can let buyers know if there were any known spills or underground tanks stored on the property. If there was a spill, check the records for a letter reporting the spill was “closed meeting standards.” This means the property was returned to pre-release condition or the level of contamination remaining does not pose a threat.
If DEC conducted the cleanup, the Attorney General’s Office may be involved to recover the costs. This also means there could be an environmental lien on the parcel. If the file is still open, additional work is required.
“All properties have pros and cons, and the environmental assets or liabilities are no different. To address environmental concerns, DEC has seen parties put cleanup contingencies into escrow, liability agreement buyouts, liability retainers with contingencies for needed future property access, or simply purchasing ‘as is’ if the purchase price is right,” said Duffany.
In addition to learning about any spill history, DEC recommends a residential walkover of the property to look for vents or fill pipes that may be an underground tank.
“In communities that have natural gas, like Watertown, buyers should be extra cautious of underground heating oil tanks utilized before the natural gas was connected. Many of these were abandoned in place and are a potential hazard liability,” said Duffany.
Home ownership can be an important part of financial and emotional security for many people. Gathering all the information possible about a prospective purchase can ensure the new property is an asset and not a liability.