I represent a buyer who is interested in purchasing a property in NJ that is several months into the short sale process at Bank of America. The seller just disclosed that there is an underground oil tank on the property and does not have money to remove the tank. Buyer is willing to pay for its removal if they can do this before closing title and in the event that contamination is found would like the reserve the right to either negotiate for a reduction to their current offer or walk away from the contract. The seller is concerned that Bank of America would also walk away from the property and not foreclose on him in the event of contamination. The bank has not been made aware of the UST by the seller's attorney. One thing to all note is that in NJ you cannot obtain normal homeowners insurance with a UST on the property. Is there any chance that BOA would not continue the foreclosure property if contamination were discovered? Has anyone had this experience before? What is a bank's position typically?
Thanks for your responses,
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Thanks for your response. If that's the case, then if my buyer finds contamination when he removes it, would the current owner still be responsible since he's the chain of title? Would my buyer have to get permission to remove the tank prior to closing title to make this be the case?
No, my assumption was that your owner "was concerned B of A.....would not foreclose" because he thought if the bank took title, he was off the hook. Your owner won't have any liability to any future owner, who buys with disclosure. He might be concerned about the liability from contaminating neighbors, etc. if it's in the water table.
I think your seller has nothing to lose by letting the buyer do his due diligence.