May the seller remove the contents of a fuel tank after going under contract?

QUESTION: I am about to list a property that has a large propane tank on it that the seller leases from her propane fuel provider. It has just been filled. I anticipate that the property will sell quickly. I have been reviewing the newly-released version of the Offer to Purchase and Contract (Form 2-T), and I see that there is a new paragraph on fuel tanks and fuel. Have the buyer and seller’s rights and duties regarding fuel tanks and fuel changed in any way? I want to make sure I handle things properly.

ANSWER: A new paragraph has been created in Form 2-T that is devoted exclusively to fuel tanks and fuel. Wording that appeared in paragraphs 2 and 4 of the previous version of Form 2-T has been consolidated into a single new paragraph 7(d), and new wording has been added that will require sellers to identify whether there are any fuel tanks located on the property, and if so, to provide information about them. Sellers are already required to provide information about fuel tanks when they list their property using the Exclusive Right to Sell Listing Agreement (Form 101). It is believed that requiring a seller to provide information in the contract about any tanks, including whether they are leased or owned, and the name and contact information of the fuel vendor and the owner of a leased tank, will help reduce disputes. Note that if the seller indicates in paragraph 7(d)(i) that a tank is leased, it will no longer be necessary to identify the tank in paragraph 2(d) in order to exclude it from the sale. See the last sentence in paragraph 2(d). On the other hand, any tank that the seller identifies as seller-owned will be included in the sale unless it is excluded by identifying it in paragraph 2(e). See paragraph 7(d)(ii).

It is very important for you and your seller to understand that although she may use any fuel in the tank through Settlement, the new version of Form 2-T provides that the seller may no longer remove the fuel or resell it. See paragraph 7(d)(iii). Thus, if there is a significant amount of fuel in the tank at the time of an offer, your seller should take that into account in determining an acceptable sales price since all fuel remaining in the tank at Settlement will be included in the sale as part of the purchase price (whether the tank is owned or leased). In addition, she should be advised to consult with her fuel provider to discuss the manner in which the tank will be refilled between the dates of contract and closing, including the possible discontinuation of any periodic refilling. (A new “Note” to that effect has been added to the Fuel Tank/Fuel provision in the listing agreement.)

Summaries of the recent changes to NCR’s residential, commercial, property management, and auction forms are available on the NCR website in the archived Q&As under Forms/Summary of Forms Changes.

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