What are the obligations of a seller and a listing agent when an underground storage tank is discovered?

QUESTION: I represent a seller who has only owned her home for two years. When we went over the Residential Property And Owners’ Association Disclosure Statement (RPOADS), I asked her if there was an underground storage tank on her property. She said no and checked the “no” box in the RPOADS. The property recently went under contract, and during the home inspection, the inspector found an old underground storage tank (UST) behind the house. What are my obligations as a listing agent? What are the seller’s obligations now that we know that a UST is present? Is the seller obligated to conduct any sort of soil testing to determine if there is any soil contamination?

ANSWER: As listing agent, you need to make sure the UST is disclosed as a material fact. And the seller must update the RPOADS and may need to take some action regarding the tank if there is evidence that there is a leak, spill, or contamination.

Section 47E-7 of North Carolina’s General Statutes requires a seller who discovers a material inaccuracy in a previously delivered RPOADS to promptly correct the inaccuracy by delivering an updated disclosure statement to the buyer. The statute also provides potential remedies for a buyer if the seller fails to do so. Therefore, you should advise your seller to promptly update the RPOADS to reflect the discovery of the UST and provide the corrected statement to the buyer. Although you have a separate obligation to disclose the UST as a material fact, your disclosure does not necessarily satisfy the seller’s obligation to provide an updated RPOADS.

Given a buyer’s potential liability for future cleanup costs, the North Carolina Real Estate Commission has taken the position that the presence of a UST on listed property is a material fact that must be disclosed by the listing agent, even if there is no indication that a leak has occurred. So, even if your seller decides to update the RPOADS and choose “no representation” for the UST question, you will need to disclose the UST as a material fact anyway.

As for potential cleanup, commercial oil tanks are regulated by the North Carolina Division of Waste Management’s Underground Storage Tank Section (the “DWM UST”). However, home heating oil tanks are considered non-regulated. That means that, among other things, they are exempt from the “closure” requirements that apply to commercial tanks. “Closure” refers to either removing the tank from the ground or filling an empty tank with a solid inert material such as sand. Because of this exemption, if the buyer in your transaction demands that the seller remove the newly discovered tank, or fill it, the seller may refuse to do so. A Q&A on “Home Heating Oil Tanks” published by the DWM UST is available here.

Your seller does not need to contact the DWM UST unless there is some evidence of a leak, spill, or contamination. And if there is no such evidence, the seller is not obligated to test the surrounding soil. But if there is a red flag, i.e., some reason to suspect that the UST on her property has leaked and caused soil contamination, advise your seller to hire an appropriately trained environmental consultant to inspect the tank and determine whether a leak has occurred. If contamination is discovered by the consultant, the seller will need to promptly notify their local DWM UST regional office. If that office determines that the seller is the party responsible for the cleanup, it will provide the seller with the information for sampling and cleanup. If your seller has additional questions, you can refer her to the UST Guidance Documents available here.

Release Date: 10/8/2026

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