Underground storage tank liability and removal

Underground storage tanks (“USTs”) are a potentially major source of liability for residential property owners.  These tanks can contain contaminants and corrode over time, polluting soil and groundwater.  Removing USTs and remediating the land they pollute can be very expensive – in one recent case, costs exceeded $200,000.

The law may require landowners to remove a UST and remediate land contaminated by the oil that escaped from it.  New Westminster and Vancouver bylaws require landowners to remove a UST if it has not been in use for more than two years (Richmond, Port Moody and Maple Ridge have similar requirements).   Provincial law may also require landowners to remediate not only their own land, but also the land of neighbouring properties affected by contamination.

Real estate buyers and sellers should know that liability is not necessarily borne by the current landowner alone.   A current landowner may bring a court action to recover remediation costs from prior landowners.   In determining liability, a court will consider (among other things) whether the oil leaked from the UST for a significant period of time prior to the transfer of property, and whether the buyer knew of contamination at the time of purchase.

A seller of a property with a UST or contaminated soil must be careful not to misrepresent the presence of a UST or contamination to the prospective buyer.  Purchasers of contaminated real estate may also sue the seller for misrepresentation (even if the seller did not know about a UST but is found to be negligent in not knowing) or failure to warn of a latent defect.

The seller of land with a UST or UST-contaminated land may avoid liability by negotiating an indemnity and release with the buyer in relation to the contamination and removal of the UST.  Contact Jamie Woods or Greg Greiner for more information.

Located in: Real Estate Law