Propane Tanks on Rural Property: Leased versus Owned
September 15, 2020
Rural properties commonly have a propane tank if a residence is on the property. When these properties are for sale, buyers often assume that the propane tank is part of the property being purchased. In many cases, however, the tank is leased equipment from a propane supplier to the previous homeowner.
This misunderstanding can cause issues when the new homeowner orders propane for the first time. If the homeowner orders from the propane company that actually owns the tank, the new owner is given the opportunity to sign a new lease, but this can become confrontational if the owner believes the propane tank came with the property. If the first propane purchase is from a propane supplier that does not own the tank, the owner runs the risk of paying for a delivery of propane and then losing it when the container is picked up by the rightful owner of the equipment. In this situation, the new owner may blame the real estate company for what the owner sees as a misrepresentation.
How To Avoid It
To avoid these issues, the listing or selling agent should ask the seller for the tank information. Specifically, the agent should ask for the name of the current propane supplier and whether the propane tank on the property is leased from that supplier or owned by the seller. While leased tanks often have stickers stating the name of the propane supplier, these stickers can fall off or be painted over. Providing this information to the potential home buyer prevents confusion, reduces risk to the real estate agents and the seller, and gives the buyer important information regarding future costs.