Since January 1, 2013 in Ontario, the Technical Standards and Safety Authority (TSSA) has required that all new oil storage tanks, both indoors and outdoors, be installed with a double bottom, double wall or secondary containment.
HIGHER COST OF REPLACEMENT
When negotiating purchase and sale agreements, homebuyers and their agents should be aware that the cost of tank removal and replacement with one of these new tanks will be at least $1000.00 more than what you may have been accustomed to.
* Before finalizing an agreement, be sure to contact at least one local fuel supplier or heating contractor to verify the updated cost of a tank replacement.
If a Homebuyer cannot obtain a new insurance policy for a pre-existing tank, and the Seller agrees to replace the tank before closing - well that's pretty straightforward.
If the Homebuyer is going replace the tank, whether it be as a result of a price rebate or cash allowance from the Seller, or out of their own pocket it makes sense to first look at the age of the oil furnace. If the furnace is very new, say five years of age or less, the most immediately cost-effective choice might be to simply switch out the tank - at a cost of about $2000.00 typically, and we're back in business - and our oil furnace has a long life ahead of it.
However if the oil furnace is older, say 15 years or more - then if the Homebuyer is in a position to ante up the other half of the cost, it might make more sense to put the money toward a hi-efficiency propane furnace.
A high-efficiency propane or natural gas furnace, starting at about $4000.00 installed will cost less to operate, doesn't need an expensive oil storage tank and doesn't even need a chimney!
Gil Strachan is a professional home inspector, representing Electrospec Home Inspection Services in east-central Ontario since 1994.