Property Due Diligence: How to Check for Underground Storage Tanks
Essential steps for identifying UST risks in real estate transactions
Underground storage tanks represent one of the most significant environmental liabilities in commercial real estate transactions. A single undetected UST can result in cleanup costs ranging from tens of thousands to millions of dollars, making thorough due diligence essential for property buyers, developers, and investors.
Why UST Due Diligence Matters
USTs were commonly installed at gas stations, dry cleaners, auto repair shops, fleet maintenance facilities, and industrial sites from the 1930s through the 1980s. Many were removed improperly or abandoned in place, creating long-term contamination risks that may not surface until years after a property transaction.
Risk Alert: Under federal and state environmental laws, current property owners can be held liable for contamination regardless of who caused it, making pre-purchase investigation critical.
Step-by-Step Due Diligence Process
1. Desktop Historical Research
Begin with comprehensive historical research before setting foot on the property:
- Sanborn Fire Insurance Maps: Historical maps showing UST locations from 1867-1970s
- Aerial Photographs: Sequential aerial images showing property development and potential UST indicators
- Environmental Database Search: Check federal and state databases for known contaminated sites
- Local Fire Department Records: Permits and inspection records for UST installations
- Building Permits: Historical permits may reference UST installations or removals
2. Phase I Environmental Site Assessment
A Phase I ESA is the industry standard for environmental due diligence:
- Site Reconnaissance: Physical inspection for visual evidence of USTs (fill ports, vents, stained soil)
- Interview Process: Speak with current owners, operators, and local officials
- Regulatory Review: Check state UST databases and violation records
- Adjacent Property Review: Assess neighboring properties for potential impacts
3. Physical Investigation Techniques
Look for telltale signs during your site visit:
- Fill Ports and Vents: Metal caps or pipes protruding from pavement
- Dispensers and Pumps: Removed equipment may leave concrete pads or mounting hardware
- Stained or Dead Vegetation: Unusual soil discoloration or stressed plant growth
- Strong Chemical Odors: Petroleum or solvent smells, especially in basements
- Monitoring Wells: Existing groundwater monitoring infrastructure
When to Escalate to Phase II
If your Phase I ESA identifies a Recognized Environmental Condition (REC), you'll need a Phase II Environmental Site Assessment involving soil and groundwater sampling. Common triggers include:
- Historical records showing former UST presence
- Physical evidence of UST infrastructure
- Documented spills or violations
- Strong petroleum odors or visible contamination
- Adjacent contaminated properties
Using Digital Tools and Databases
Modern due diligence benefits from digital resources:
- UST Map: Search our database of known UST facilities and LUST sites by location
- State Environmental Databases: Check official state UST registries and violation records
- EPA ECHO: Federal enforcement and compliance history database
- Historical Topographic Maps: USGS historical maps showing land use changes
Risk Management Strategies
- Environmental Insurance: Consider pollution liability insurance for properties with UST history
- Purchase Price Adjustments: Negotiate lower prices or seller-funded cleanup for identified risks
- Escrow Accounts: Hold funds for potential cleanup costs until risks are fully characterized
- Seller Representations: Obtain warranties about environmental conditions and UST history
Actionable Takeaways
- Never Skip Environmental Due Diligence: The cost of a Phase I ESA is minimal compared to potential cleanup liability
- Engage Qualified Professionals: Use environmental consultants with UST experience and state certifications
- Document Everything: Maintain detailed records of all research, inspections, and findings
- Plan for the Unexpected: Budget for potential Phase II assessments and remediation costs
- Consider Future Use: Evaluate whether planned development activities might disturb contaminated soil
Ready to research a specific property? Search our UST database or learn about potential cleanup costs.
Frequently Asked Questions
What is the first step in checking for USTs during property due diligence?
The first step is conducting a Phase I Environmental Site Assessment (ESA) performed by qualified environmental professionals. This includes reviewing historical records, aerial photography, fire insurance maps, and conducting a site inspection to identify current or former UST locations.
How can I research the historical use of a property for USTs?
Research historical use through Sanborn fire insurance maps, historical aerial photographs, local fire department records, building permits, environmental databases like EDR, and interviewing long-time area residents or former property owners.
When should I conduct a Phase II Environmental Site Assessment?
Conduct a Phase II ESA when a Phase I identifies a Recognized Environmental Condition (REC) related to USTs, when historical records indicate former UST presence, or when physical evidence suggests potential contamination. This involves soil and groundwater sampling to confirm contamination.