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Underground Storage Tanks: What You Need to Know

As an environmental lawyer, leaking underground storage tanks (USTs) are not by any means a new phenomenon to me. But if you’re a homeowner, or potential homeowner, having issues with an UST, the odds are that it will be the first time that you've encountered them and you might be overwhelmed by what it entails.

I’m here to tell you that you can survive a leaking UST. It might seem scary at first, but with proper guidance and the correct professional approach, you can and will survive.

How do you know when your underground storage tank is leaking? There are various ways for the discovery to be made. Often, clients come to us because their furnace or heater stopped working. Once that happens, one of the first questions that must be asked is whether or not there is a hole in the UST that contains the oil. If there is a hole, you might be losing the oil to the environment, and therefore nothing is left to feed the furnace.

Other clients learn that they have leaking tanks when they try to sell their homes. It is now commonplace as part of transactions involving USTs for purchasers to insist that sellers prove that the tanks are in good working order. Often some kind of test is involved, and when necessary the seller is required to remove the tank before the sale can proceed.

Under many state and federal laws, there is a requirement that the tank leak be reported to the government. Often, this will result in the leak being assigned a case number and a case manager will be assigned to oversee the cleanup of the spill. Oil leaking into the environment violates state and federal laws. It is certainly no laughing matter, and knowledge that your tank is leaking oil requires immediate action.

If you find out that your tank is leaking, here are some measures that you may want to consider:

  • Reach out to an environmental consultant as soon as possible to stop the discharge and minimize any environmental problems that might have resulted. As the owner of the tank, you are responsible for the discharge. If any third party, including persons with drinking water wells who are downgrade from your well, are affected it is your responsibility. So the first thing is to address the emergent conditions.
  • Place any applicable insurance carriers on notice; many people are not aware that their insurance may respond to a leak. Homeowners and renters policies should be examined, as well as any other applicable policies.
  • Very often, legal assistance is required in order to insure that the cleanup is being undertaken properly and that all possible sources of funding have been tapped. Legal counsel can also interact with carriers, neighbors, and regulators. Counsel will also ensure that you are being protected from possible civil, or even (but not usually) criminal, action.
  • Work with your environmental consultant and attorney to develop a cleanup plan that satisfies the regulatory agency in charge of the cleanup. This involves an understanding of the extent of contamination and the cleanup options that are available, as well as the preparation for submission of any necessary reports required by the agency in charge.
  • Determine whether any other individuals may have legal responsibility for the leak. Of course, if the tank leak is minor and not expensive to address, this might be irrelevant. But if the problem looks like it will be prolonged, it might be important to determine whether any third parties are responsible. This can include the former owner of the tank, the tank manufacturer, the tank installer, the maintenance company that serviced the tank, and in certain instances perhaps even the oil company may have liability. Do not forget any fraud or negligent remediation claims that might exist.
  • Determine whether any other sources of funding might exist. For example, many governments have local funding available for tank removals. There might be loans and grants from other sources that are available. Every resource should be evaluated to determine if there exists a funding source.

 Often, insurance companies will initially deny these types of claims. If that occurs, it is important for your attorney to evaluate the claim denial and determine whether an appeal should be filed. There might be an administrative appeal available, and there might also be a need to resort to the Courts. A word of warning: if you need to file suit, there is usually a very short time period allowed for such a suit to be filed. If you miss it, you may lose you right to file suit forever.

Tank cleanups can often involve groundwater contamination. If groundwater contamination is involved, there are varieties of technical methods available for addressing it. It is up to you, your consultant, your lawyer, and the regulatory agency to determine which method makes the most sense under the circumstances. And it will be important for everyone to agree on a single approach.

You should know that oil tank leaks also result in injury to third parties, specifically neighbors and anyone else with drinking water wells that may be impacted. Sometimes, those neighbors commence suit or file a notice of claim against the owner of the leaking tank. Should that happen, it is important that you provide the notice of claim or the lawsuit to your lawyer and insurer as soon as possible. Your lawyer will want to defend you properly and may very well tender the defense of the claim to your insurance company.

If you are currently having issues with a leaking UST, please feel free to contact our office to speak with a member of our legal team. Our firm has assisted many clients with UST leaks; including parties who own or inherited a leaking tank, as well as nearby property owners affected by UST leaks from other properties.

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