California Real Estate Broker ExaminationPropertyMedium
A homeowner discovers that a previous owner installed an underground oil storage tank that was never properly decommissioned or removed. This tank could pose a significant environmental risk. What is this tank classified as in real estate terms?
- AAn environmental hazard
- BA fixture
- CA hazardous waste
- DAn encumbrance
Show answer & explanationAnswer & explanation
Correct answer: A. An environmental hazard
An underground storage tank (UST) containing hazardous substances is classified as an environmental hazard due to its potential to leak and contaminate soil and groundwater.
Why the other options are wrong
- B. While it was a fixture when installed, its current status as an undecommissioned tank highlights its hazard potential more than its fixture status.
- C. While the contents might be hazardous waste, the tank itself is broadly categorized as an environmental hazard.
- D. An encumbrance is a claim against a property (e.g., lien, easement), not typically a physical hazard.
Underground Storage Tank (UST)
A tank and any underground piping connected to the tank that has at least 10 percent of its combined volume underground, used to store hazardous substances or petroleum.
- Potential source of soil and groundwater contamination.
- Strict federal and state regulations for installation, maintenance, and removal.
- Discovery often triggers environmental assessments.
- Can significantly impact property value and marketability.
Memory trick: UST: 'U'nderground 'S'torage 'T'ank, 'T'oxic 'T'rouble.