THE PROBLEM WITH RESIDENTIAL HEATING OIL STORAGE TANKS

If you live on Martha’s Vineyard the most common fuel sources are Propane and Oil, oil having been the most commonly used for decades not to mention the most efficient (BTU) heating source. 

Before I discuss the problem I want to explain that Martha’s Vineyard Island is a very fragile ecosystem relying on a common aquifer for its drinking water. Once that aquifer has been compromised to the point that it is no longer potable – suitable for drinking, life will change.  I am not saying we are doomed, but our quality of life will suffer significantly.  Right now, today, we are still in good shape and I know my drinking (well) water is delicious.

We have done a lot to protect the ground water with the implementation and regulation of engineered Title 5 waste water systems and limited expansion of the sewer system networks, but that is topic for another conversation.

First of all, residential “consumptive” use fuel oil storage tanks are not regulated by the Federal Government.  The Fed focuses on the commercial sector because the fuel containers are huge (e.g. gas stations, etc.) and the consequences of a breach would be catastrophic.  Normally, for residential consumption, whether the oil storage tank is above or below ground the capacity is between 275 and 288 gallons.

In my two and half decades in the real estate business on Martha’s Vineyard I have witnessed some very unfortunate costly mishaps concerning fuel oil storage tanks.  For example, two 275 gallon single wall storage tanks above ground connected in series; one tank begins to leak and siphons the second tank’s contents out and into the earth below.  Why did no one notice what was happening? Because the owners were absentee seasonal occupants like so many other property owners on Martha’s Vineyard. The area had to be excavated and all – I mean ALL, of the contaminated soil had to be removed, and then it had to be carted off-Island to an approved disposal center for HAZARDOUS WASTE materials.  Would you like to guess how much that cost?  In another situation a tank leaked in a basement in a heavily populated area. The basement had to be excavated as did a portion of the exterior beyond the foundation. Soil samples had to be taken not only at the subject property but for the properties abutting the area of the fuel oil spill.  Also, the contaminated earth had to be packed into dozens of large storage drums for transfer off Island. Would you like to guess how much that cost?

Single wall steel fuel oil storage tanks have been used since before I was born, but they don’t last forever and like everything else it seems, the quality has diminished.  Normally, the wall thickness of a 275 gallon single wall tank is 12 gauge but when “off shore” tanks were introduced into this country, quality control suffered.  

Thus, the introduction of the ROTH stainless steel “double wall” fuel oil storage tank. However, they are not cheap. You can buy a single wall 275 gallon tank for about $1000.00, whereas a ROTH tank will cost you triple that amount – but you will have it forever, if there is such a thing.

Is there an alternative or “band aide” if you don’t have $3500?  There is a company, Boston Environmental that has been administering the TankSure Program inspection services for a number of years.  I recently observed a demonstration and I have to admit, even though this is a serious matter, it made me chuckle. Why? Because it reminded me of a pregnancy ultrasound. First they smear some clear jell on the transducer probe that is used to send and receive sound waves, then they move the probe around, usually to 10-12 locations along the lower tank wall while reading the measurements on a digital display.  

Through analysis the condition of the tank is rated.  The generally accepted minimum wall thickness measurement to pass a tank is 0.100”.  If the average is significantly less than that the tank will fail the inspection. 

Some companies offer incentives and a limited warranty, but in my opinion there are no guarantees even though the tank passes the test.  If the test results are marginal you may be advised to have the tank replaced or at the very least tested every year. Some fuel oil companies may even refuse to fill a tank that is below the accepted range.  What do I tell my Buyer Clients? REPLACE THE TANK with a ROTH tank.

So, if you are as concerned about contamination to our aquifer as I am and you heat your home with fuel oil but cannot afford to replace your single wall tank right now, what should you do?  You can start by being proactive and contract with a fuel oil company that is also proactive.  Currently the first service provider on Martha’s Vineyard to offer the TankSure Program for oil tank & equipment inspection services is Island Energy, Inc (www.islandfuelinc.com).  Give them a call.  Jay McMann is the President and he can be reached at (508) 696-5959.

For more information, Mass.Gov has a great section under Energy and Environmental Affairs:  RemovingYour Underground Heating Oil Tank - A Homeowner's Guide

RADON ... It's a Gas!

It’s not as though we don’t already have enough to worry about with Global Warming, chemical and waste water contamination of our drinking water and all the other ecological mysteries that we think are threatening our demise. Do you remember when everyone was concerned about contracting cancer simply by sitting too close to an electric heater or using an electric blanket?  The big scare back in the 90’s was all about Electromagnetic Radiation or EMFs.  Even today there is no definitive answer to whether living next to a utility easement where there are high tension wires or step-up and step-down transformers within close proximity to a home will emit enough radiation to be harmful to your health. However, whether the danger is real or not the concern is there and it has stigmatized many properties perceived value.

Now there is RADON!

Once upon a time Radon was of no concern here on Martha’s Vineyard, but neither was smoking cigarettes. Some people still don’t care. The common belief was, it was only present in up-Island towns where the heaviest concentration of glacial rock existed. Today Radon is being found in every town on the Island and in some areas in quite high concentrations. 

Here is the point I want to make.
I think doing a Radon test should be the first thing any home buyer does before having a complete structural inspection performed. Repairing a fully depreciated roof or replacing a heating system is no big deal compared to finding Radon gas. Radon is a health hazard.

What is Radon?
It is a particulate gas that constantly emanates from disintegrating glacial rock formations or ledge rock, but there can be other sources. The EPA has set the ‘action’ level for Radon at 4 pCi/L (picocuries/liter). In Europe where they are less conservative the action level is 10 pCi/L.  To give this some perspective, since Radon is the #2 cause of lung cancer, the EPA guidelines state that a reading of 10-12 pCi/L is "equivalent to smoking one pack of cigarettes a day".  Am I getting your attention?

I have a section on my website http://www.splitrockre.com/environmental-radon.shtml explaining in more detail about Radon with links to resources. For further detail or if you want to schedule a consultation with a Radon Mitigation expert you can contact the company I use. http://www.blackdogin.com/

This is how the Structural Inspection process works.
As a buyer, before the Purchase and Sale Agreement is signed and you are in too deep, a Structural Inspection is performed.   The home inspector will usually recommend a Radon test as an ‘add-on’ or optional test. The test can be static or active and usually takes 24 hours and is best done in the colder months when a house is closed up.  The cost of the test is nominal, usually under $100.00 but it can run as high as $300.00. Compared to the cost of a complete structural inspection which usually averages $400.00 to $600.00 or even more depending on the size of the premises being inspected.  Finding a high level of Radon could possibly derail a home purchase more easily than most other findings in a Structural Inspection. 

Radon in the Water?
If it isn’t enough to find radon gas in the air, it can also be found in well water.  It is not as serious in well water but when it becomes airborne as spray that is when it can affect your health.  Well water systems can also be treated to neutralize the Radon by using high maintenance filtering systems.  If the initial Radon test shows high levels it is advisable to have a well water test done. Of course, if the property is on town water then you don’t have to worry.

My recommendation
Home buyers should investigate whether or not Radon is prevalent in the area they are thinking of purchasing a home.  Good sources for that information can be a structural inspector, an attorney or a well installer. As I said before, contract for a Radon test before having a full blown structural inspection performed.  If the levels are below the action level you are good to go. If the levels are within the margins, let’s say between 4 pCi/L and 12 pCi/L you can have a mitigation system installed for somewhere around $1500 to $3000.00 depending upon the complexity of the installation. If a mitigation system is installed and the after installation Radon levels are not well below 4pCi/L further ventilation work may need to be done.  Do a Radon test first and then you can worry about the rest. That is my advice.

Dreamers Dream, Martha's Vineyard Winners Act!

I realized a long time ago that I do not have the heart of a salesman.  I have the heart of a teacher, an advisor and a protector. 

I empathize with anyone who longs to make a buying decision on Martha’s Vineyard, because it is their dream and they know it will be good for them and will enhance their life in ways that almost nothing else will.  When I made the decision it was like immersing myself in the fountain of youth and from that decision many other positive life enhancing events sprung forth.

I find that many people today are scared to make that huge decision so they imagine all the reasons why they cannot or will not have what they want.  For many people that means assuming that they will not be able to qualify for a mortgage or have enough cash for a down payment.

I would like to present some graphics to enhance this conversation.

According to Freddie Mac, approximately 42% of all 30-34 year old potential buyers believe that they need a minimum of 15% to buy a home.

 

 

Relating this to Martha’s Vineyard, if you are purchasing as a first time home buyer or purchasing a residence either as a move up buyer or as a first time home buyer there are local programs allowing a down payment as little as 3% down.

 

I am not a mortgage expert but I am the source to the source.  With the disclaimer that all loans are made according to the specific profile of the applicant, Santander (Formerly Bank of Martha’s Vineyard) has given me this brief summary:

A 30-year fixed rate loan with 95% financing is available for a primary home purchase and is not restricted to first time home buyers.

The Mass Housing Program (MPH) has 97% financing available to first time homebuyers and restricted to low & moderate income families.

FHA has 96.5% financing available on qualifying purchases for both primary purchases and is not restricted to first time home buyers.

Here are a couple of charts to give you something to think about if you are unsure about waiting another year to make your life more complete, or if you are thinking the prices are going to go down significantly.

 (Please note that the interest rates were as of the time this chart was created) 

 

I do believe prices will go down more on Martha’s Vineyard but not in double digits as they have in the past. As soon as the inventory starts to get absorbed, and it will, prices will start to increase and then the path will be clear.  First we will enter a neutral market and then a seller’s market. This is the normal cycle for Real Estate and we go through it about every 15 years.

 

And where do we go from here?

If you want to do more than just dream about Martha’s Vineyard I suggest you start now by getting in touch with a lender and find out what you can comfortably afford. List your ‘wants’ and ‘needs’ and then in the fall you can get out there in the market and be clear, confident and focused.  Be a winner!