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BUYER BEWARE: Underground Storage Tanks Create BIG Liabilities.

Property sellers and buyers must be careful whenever there is any evidence of an underground storage tank on the property—especially if the tank contained any type of fuel, pesticides, or other toxic chemicals.  Claiming ignorance of the storage tank or any leaks from it will not, in all likelihood, prevent a liability that could run to tens or hundreds of thousands of dollars.   

For people who have underground storage tanks on their property, Ohio’s Bureau of Underground Storage Tank Regulations in the State Fire Marshal’s office is a starting point for determining how to comply with the law.  The State’s regulations are promulgated pursuant to the federal Resource Conservation and Recovery Act and state laws which addresses liability for owners of underground storage tanks.  The state and federal rules are very complicated and they include requirements about record keeping, corrective action, financial responsibility, and reporting obligations.  What is required depends in part on the ownership history of the underground storage tank system and the type of materials that were or are stored in it.  Depending on the circumstances, a property owner can be held strictly liable, at great expense to the property owner, for leaks.  Merely selling the property to some unsuspecting third party will not help the seller avoid liability in the future.  Liability remains with the seller even after the sale.  And, the buyer will take on the liability, too.

 For people considering buying property that may have underground storage tanks, it is important to understand that you will, in all likelihood, be taking on significant financial responsibility for legal compliance as well as maintenance of the underground storage tank system.  Even though the seller remains liable in many circumstances, the buyer also can become liable.  While there are ways to minimize the potential for liability, such as engaging an environmental professional to assist you in an environmental site assessment to satisfy the EPA’s “all appropriate inquiries standards” and participating in Ohio’s voluntary action program if necessary, it is almost impossible to avoid any responsibility for adverse environmental conditions contained on the site. 

 Importantly, the risk of liability to property owners does not merely come from enforcement by state and federal regulators.  In some cases it can come from private lawsuits from neighbors, municipalities, conservation organizations and environmental action groups.  Indeed, such lawsuits are an important means to enforcing the environmental laws.  A lawyer knowledgeable with the environmental laws can help a property owner or a victim of contamination analyze the legal liabilities related to underground storage tanks and what can be done about them. 

About D.J. Young

D. J. Young writes the DelawareO legal blog. He is a 1998 graduate of the University of Notre Dame Law School. He is a partner with the Delaware, Ohio law firm of Firestone, Brehm, Wolf, Whitney & Young LLP, and can be found on the web at www.fbylaw.com. This blog contains news and commentary and is not intended to be legal advice directed to any particular group or person. Interested persons must see an attorney to discuss their particular factual and legal circumstances.

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