Buying a gas station: environmental due diligence on tanks and leaks
Assume a gas station has had a release. The questions are when, how big, and whether the state closed the case.
Why gas stations and convenience stores with fuel carry this risk
Fuel stations store thousands of gallons underground in tanks and lines that age. Federal tank rules came in 1988 and upgrade deadlines followed in 1998, so many older sites had releases before modern leak detection.
The tank system is the property's biggest liability. A clean store with an open leak case can be worth far less than the sales numbers suggest.
What usually turns up
Past and current tank leaks
Often seriousLook for leaking tank case numbers on the site. An open case means cleanup is unfinished; a closed case may still carry limits on use.
Tank age and compliance
Often seriousSingle-wall steel tanks and old lines are the usual source of leaks. Registration records show install dates, materials and removals.
Neighboring stations
Worth checkingCorner stations often face other stations. A plume from across the street can reach your tanks' area and muddy who is responsible.
Vapor into the store
Worth checkingGasoline vapor can move through soil into the building, which lenders and buyers now ask about under the current Phase I standard.
What the pre-screen checks for a gas station
- State registered tank records: how many tanks, when installed, what they are made of, and any removals.
- Leaking tank cases on and around the site, with status and closure dates.
- Historical aerials to find where older pump islands and tanks sat.
- Federal enforcement records for the operator.
Pre-screen a property before you spend on a Phase I
A desk review of one address: past uses from historical photos and maps, federal and state environmental records, and flood risk, ready usually within the hour. $100 for one report, or $100/month for 3.
Questions to ask the seller
- Can you share tank registration, leak detection and tightness test records for three years?
- Has the state ever opened a leak case here, and do you have the closure letter?
- Is the site enrolled in the state's petroleum cleanup fund?
- When were the tanks and lines last replaced?
When to order a full Phase I
Always order a full Phase I for a gas station, and expect it to recommend a Phase II with soil and groundwater samples. Use the pre-screen to decide whether to spend that money, not to skip it.