Submitted 07/03/07 04:33 PM
Q. If I purchase a home that has a propane tank attached (for water heat, fireplace, and dryer), does the remaining propane in the tank normally convey with purchase? I have been informed that the local provider will come to the house after closing, measure the remaining fuel in the tank, and bill be at the current per gallon rate. "The price per gallon will be that of the day of the reading." (this is a quote from the e-mail). Is this correct?
Submitted 07/03/07 08:56 PM
No, the fuel does not convey with the purchase, as part of the purchase, that is. See, it brings no equity value to the transaction for the lender, so the lender will not include that cost in the mortgage. You will have to pay for it separately.
It is handled in the NC Realtors standard "Offer to Purchase and Contract" in Section 9, "Buyer agrees to purchase the fuel from the Seller..."
If you are not using that form, or not borrowing money to buy, it is quite negotiable. Just make sure the details are covered in your contract.
Your agent can explain the process to you, but what you describe seems typical to me.
Submitted 07/03/07 09:26 PM
I don't see how what you stated in your question has anything whatsoever to do with what Mike has provided here. So one of us doesn't understand the question, and it's probably me.
But I get the impression that you think the provide is going to come measure what's left in the tank, and that the provide is going to send you a bill for it, even though it belongs to the Seller. Surely that's not right. Maybe the provider measures the remainder, gives the Seller credit, and then rebills you for what's there?
Gee, what a lot of trouble to go through for a few bucks of propane. Glad we use natural gas where I am and that it comes through pipes in the ground, and it never runs out. Yea 20th and 21st Century technology!
Submitted 07/03/07 11:43 PM
Now I dont know about North Carolina but.....
My father-in-law owns a propane company in Alabama and the only gas in the tank is gas that has been paid for. They cant come back out and make you pay for something that the previous owner has already paid for.
I suppose the seller could ask you to pay for it but I doubt they would even think to do so. If they did and you said no, what are they going to do take it with them?? :-)
I personally and high falutin' like Bill and have pipes bring in my gas!
Submitted 07/04/07 12:17 AM
Sounds similar to the way we do oil around here. Basically the provider comes and fills up the tank with a rate per gallon or whatever you measure propane in. Then you know the capacity of the tank and a full tank would be at whatever the current rate is. In our regular P&S, I don't think anything is mentioned about it specifically. Most people just pay it at closing, but I did hear from one realtor who said one response would be to tell the sellers to take it we don't want to buy it.
Submitted 07/05/07 03:11 PM
There are many cases where the service provider can bill the home buyer for the gas, so just because it is int he tank doesn't necessarily mean it has been paid for yet. As for the gas, I frequently advice my clients to have the seller have the gas removed by contacting the vendor and have them pump it back out. Especially here in Michigan where you could have $500 worth of propane in a tank! If it is July, do you really need four months worth of propane when you are buying a home? probably not, at least not until October, then buy it then (time value of money). Then there is really one less thing to cause chaos at closing!
Submitted 07/10/07 12:22 PM
Their is a paragragh in the offer to purchase contract that discusses the propane. This is a negotiable item if handled on the front end. If left alone in the contract the contract states that you the buyer owes the seller for any remaining propane, and the propane company will come out and measure prior to closing. Sometimes the tank is leased and sometimes the tank is owned you need to find this out prior to writing the offer as this is all negotiable.