 Underground
propane tank may not be yours
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 Dear
Steve,
We bought a new-construction home about a year ago. The developer
gave us the number of the propane company who installed our tank,
and that company told us we'd have to pay a per-gallon fee of 25
cents since we were "renting" their tank. I was under
the assumption that the tank was sold to us with the property. The
propane company told me I could either pay the fee, buy the tank
for $2,500, or they would just come and remove it. So I paid the
fee for the first few months until we saved up enough to buy it.
Should we have paid for the tank at all? Our title insurance company
stated there were no liens on the property. Do I have any course
of action to get my $2,500 back? -- Brad
 Dear
Brad,
As you have probably guessed by now, the time
to clear up questions about infrastructure, utilities, easements
and services to a new home or subdivision is firstly, when you are
making your initial inquiries about the property; secondly, before
you signed the contract and finally before you completed the closing.
(There's an old axiom about the word "assume" that I won't
repeat here.)
Unfortunately, there's no stock answer as to who owns
the tank and if you should have paid for it. It all depends on the
agreement between the developer and the gas company, the wording
of your sales contract and the laws in your state.
But you're probably stuck, although you really may
not be out as much money as you originally thought. Obviously, you
needed propane service when you bought the home, presumably because
there is no natural gas line servicing your area. For that, you
needed a tank, which you would have had to pay for one way or another.
(Of course, this doesn't address the fact that you never planned
for the additional $2,500 expenditure.)
Since you bought the tank after only a few months
of paying that dubious 25-cent surcharge, you did lessen your financial
burden. And I say "dubious" because none of the three
propane companies I contacted in different parts of the country
had ever heard of such a thing. The fact that a specific company's
tank is already on your property practically assures them of your
propane business anyway, so you'd think they wouldn't want to give
you an incentive to have it removed and use another supplier --
unless they have an absolute monopoly on the area. Hank Hill, the
propane-selling hero of the animated TV series, "King of the
Hill," would never do you that way.
Asking the company to remove the tank and buying another
one may have been your only option to get out of the situation.
However, in some areas of the country, propane companies have up
to a four-month waiting list for tank delivery!
Ethically, the developer should have been clear about
this arrangement upfront instead of letting you assume the tank
came with the house. A good real estate agent would have probably
pointed this out as well. Perhaps you overlooked this fact in the
fine print of your closing documentation.
While your title company should have advised you of
the existence of any utility easement(s) on the property, certain
"easements by necessity" that provide access to utility
or energy infrastructure on a property fall into a gray area. Laws
regarding this vary from state to state, and you may want to contact
a real estate attorney if it's really eating at you.
But it wasn't a lien on the property in the classic
sense, because there was no actual obligation attached to it.
As for that $2,500 price tag on the tank, I hope it was for the
jumbo 1,000-gallon variety. The manager of one propane company in
South Dakota said he would sell me all the 1,000-gallon tanks I
wanted for $1,800 each, installed. But one Texas firm said the price
of a new 1,000-gallon tank, installed underground, could run close
to $3,000 in some cases, so that $2,500 price may not be too much
out of line.
Propane is not always regulated by state utility or
transportation commissions, so if you're concerned about your propane
supplier's business practices, you should call your state's attorney
general's consumer-protection line to determine your next step.
Good luck -- it's been a gas.
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