Does a buyer have to pay for leftover fuel in an attached fuel tank at Closing?

QUESTION: Today I attended a closing with my buyer. The attorney had all the documents and funds ready so we could close, but while we were at the attorney’s office, the listing agent asked if my client had a check prepared for the fuel remaining in the propane tank attached to the home. I told him that I did not believe my client needed to pay for the fuel under the Offer to Purchase and Contract (Form 2-T), but he responded by saying that someone needed to pay for the fuel or his seller was not going to close. Does my client have to pay for the propane?

ANSWER: No. Leftover fuel is addressed in paragraph 2(b) of Form 2-T. The contents of attached or buried fuel tanks are included in the purchase price unless the seller uses, removes, or resells the fuel prior to Settlement. It appears in your case that the seller did not use, remove, or resell the remaining propane in the tank prior to Settlement, which means that your buyer is entitled to the fuel at no additional cost.

Agents should note that the seller’s deadline for disposing of fuel tank contents is Settlement and not Closing. Settlement is a step in the process of Closing, and the term is defined in Form 2-T as the “proper execution and delivery to the closing attorney of all documents necessary to complete the transaction contemplated by this Contract, including the deed, settlement statement, deed of trust and other loan or conveyance documents, and the closing attorney’s receipt of all funds necessary to complete such transaction.” Thus, a seller who refuses to close after Settlement because the buyer will not pay additional funds for fuel could be in breach of contract. If so, a seller’s refusing to proceed could trigger the buyer’s remedies under paragraph 8(n) in Form 2-T.

If, prior to Settlement, the seller chooses to use, remove, or resell the fuel, sufficient fuel should be left in the tank so the buyer can inspect any appliances or utilities that operate on the fuel.

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