There is a white tank beside the house and you have been buying gas for it for years. Then a buyer asks whether the tank is included and you realise you have no idea whether you own it. On rural Oklahoma property the answer is usually no, and the consequences of finding that out at closing are worse than they sound.
This article covers how to establish whether the tank is yours, what happens to a leased tank when the property sells, who owns the gas inside it, and what to sort out before you list.
We buy houses, so read the last section knowing that. We are not gas suppliers. Tanks are governed by the agreement you signed with the supplier and by that supplier's own practice, which varies, so the tank agreement and a phone call to the supplier are the authority here, not any article.
Establishing whose tank it is
Start here, because everything else follows from it and most owners genuinely do not know.
Two arrangements are common. The supplier owns the tank and leases or loans it to you, usually at a nominal annual charge or free on condition you buy gas from them. Or you own the tank, having bought it outright at some point, frequently when the house was built.
A tank you have paid to fill for fifteen years is not a tank you own. Those are different things and the paperwork settles it.
How to find out:
- Look for the agreement. A lease, a tank agreement or a customer agreement with the supplier
- Look at the tank. A supplier's name and a tank number on the dome usually means theirs. It is an indication rather than proof
- Ring the supplier and ask directly whether the tank is theirs or yours, and ask them to confirm it in writing or by email
- Check the paperwork from your own purchase. If you bought the house with the tank included, it should appear somewhere
What happens to a leased tank at a sale
The important point: a leased tank is not yours to sell. It is not part of the property and it cannot simply be handed over with the keys.
In practice one of two things happens. The buyer opens their own account with the same supplier and the lease transfers or is rewritten in their name. Or the buyer does not, and the supplier comes and removes the tank.
That second outcome is the one to plan around. A house in January with no tank and no heat is a genuine problem, and it is a problem that arrives after closing when nobody is in the mood to solve it.
There may also be charges attached to removal, to termination, or to the pump-out of remaining gas. Those sit in the agreement, and they are exactly the sort of thing nobody reads until they are invoiced.
Some suppliers restrict who may fill a tank they own. Where that applies, a buyer who dislikes the supplier is not simply free to choose another one while the tank stays.
Who owns the gas in it
A small question that produces a surprising number of arguments on closing day.
The propane in the tank is a consumable you have already paid for, and unless the contract says otherwise it is generally treated as yours. Practice varies: some transactions have the buyer reimburse the seller for the remaining gas at a rate agreed in advance, some treat a part-full tank as included, and some have the seller run it down.
Whatever you decide, put it in the contract, with the method of measuring it. A tank gauge reading, a date and an agreed price per gallon settles in one line something that otherwise becomes a phone call on moving day.
And if the tank is leased, remember the gas and the tank are separate questions. You may own the contents of something you do not own.
If the tank is yours
Then it is an asset that goes with the property, and there is more to do rather than less.
Say so explicitly in the contract, because a buyer used to leased tanks will assume otherwise and an owned tank is worth real money.
Have it looked at. Age, condition, corrosion at the base, the regulator and the lines all matter, and a supplier will not fill a tank they consider unsafe. A buyer discovering that after closing has bought a house with no heating.
Gather the paperwork: the purchase record, any inspection or recertification, and the installation details. On an owned tank the file is what turns an unknown into an asset.
Our page on selling a house with acreage covers the wider set of rural features that narrow a buyer pool, and our article on a shared water well covers another one that behaves similarly: fine for years, then a lender asks.
Running it down, and the mistake that comes with it
Sellers frequently decide to use up the gas rather than argue about it, which is reasonable, and it has a failure mode worth naming.
Do not run a tank to empty. Beyond leaving a cold house for the walk through, taking a tank right down commonly requires a leak test and a relight of every appliance before the supplier will refill it, which is a booked visit rather than a delivery. On a buyer's first weekend in a rural house in winter, that is a bad experience with your name on it.
The sensible target is a modest working level agreed in the contract rather than zero, and a reading taken on the day.
Two related points. A tank that has sat unused for a long time, on a property that has been empty through an estate or a long listing, may need the same treatment before anybody will fill it. And if the house has been vacant, our article on vacant property insurance covers the other thing that quietly lapses meanwhile.
If the property is heated by propane and you are selling in winter, the tank level is part of the transaction rather than a detail. Treat it that way in the contract and nobody has to solve it on moving day.
What to sort out before you list
- Establish ownership in writing from the supplier. One call
- Read the agreement for removal charges, termination terms and any restriction on who may fill the tank
- Ask the supplier what a buyer has to do to take the tank on, and how long it takes. Then you can answer the question instead of guessing
- Decide the gas question and put it in the contract with a measurement method
- Disclose which it is. Leased or owned, and the supplier's name. Our article on Oklahoma seller disclosure requirements covers the position
- Do not describe a leased tank as included in the listing. That is a representation about something you do not own
Where we come in
This is admin, not a reason to sell differently. One call to the supplier and one line in the contract deals with almost every version of it, and no part of this should cost you a sale or a discount.
Where we are relevant is the wider situation these tanks tend to sit in: rural property, well water, outbuildings, sometimes a manufactured home on the same parcel, each of which narrows the pool of lenders willing to fund a purchase. Our page on selling a house with acreage covers that, and our article on financing land-heavy property covers why those purchases are harder to fund.
The tank itself is a phone call. Make it before you list rather than during a closing.
The short version
- Most rural tanks are owned by the supplier and leased or loaned to the occupier. Paying to fill one for years does not make it yours
- Establish it in writing from the supplier, and check the agreement
- A leased tank is not yours to sell. Either the buyer takes on an account with that supplier, or the supplier removes the tank
- A house in January with no tank and no heat is a real problem, and it arrives after closing
- Removal, termination and pump-out charges sit in the agreement
- The gas inside is generally the seller's. Put the treatment and the measurement method in the contract
- If the tank is yours, say so explicitly and have it inspected, because a supplier will not fill a tank they consider unsafe
- Never describe a leased tank as included
Frequently asked questions
Do I own my propane tank?
On rural property, usually not. Most tanks are owned by the supplier and leased or loaned to the occupier, often at a nominal charge or free on condition you buy gas from them.
I have paid to fill it for years. Does that make it mine?
No. Buying the gas and owning the tank are different things, and the agreement settles which you have.
How do I find out?
Look for the tank or customer agreement, look for a supplier name and tank number on the dome, and ring the supplier and ask them to confirm in writing.
Can I sell the house with a leased tank?
Yes, but the tank is not yours to sell. Either the buyer opens an account with that supplier and the lease transfers, or the supplier removes the tank.
What if the buyer will not use that supplier?
Then the tank is likely to be removed. Plan for that rather than discovering it after closing, because a house with no tank has no heat.
Are there charges for removal?
There can be, along with termination charges and charges for pumping out remaining gas. Those sit in the agreement, which is worth reading before you list.
Can anybody fill a leased tank?
Some suppliers restrict who may fill a tank they own, so a buyer is not necessarily free to shop around while the tank stays. Ask the supplier.
Who owns the gas in the tank?
Generally the seller, since it has been paid for. Practice varies, so put the treatment in the contract rather than leaving it to closing day.
How should the gas be measured?
A tank gauge reading on an agreed date at an agreed price per gallon settles it in one line. Without that it becomes a phone call while somebody is moving.
What if the tank is mine?
Say so explicitly in the contract, because a buyer used to leased tanks will assume otherwise and an owned tank is worth real money.
Should I have an owned tank inspected?
Yes. Age, corrosion at the base, the regulator and the lines all matter, and a supplier will not fill a tank they consider unsafe.
What happens if a supplier refuses to fill it?
The buyer has bought a house with no heating, which is a dispute you do not want. That is why the inspection is worth doing before listing.
What paperwork should I gather?
The purchase record, any inspection or recertification, and the installation details. On an owned tank the file is what turns an unknown into an asset.
Do I have to disclose whether it is leased?
Disclose which it is and the supplier's name. It is exactly the sort of thing a buyer assumes wrongly.
Can I list it as included?
Not if it is leased. Describing a leased tank as included is a representation about something you do not own.
Does the tank affect the buyer's mortgage?
Rarely by itself. It sits alongside the other rural features, well water, outbuildings and sometimes a manufactured home, which together narrow the pool of lenders.
What should I ask the supplier?
Whether the tank is theirs or mine, what a buyer has to do to take it on, how long that takes, and what charges apply on removal or termination.
How long does a transfer take?
That is one of the questions to ask, because the answer decides whether it can be done around your closing date or needs starting earlier.
Is an above-ground or buried tank different?
A buried tank raises further questions about condition and access, and is worth establishing carefully. Our article on an old underground fuel tank covers a different buried tank problem entirely.
Do you buy houses with leased tanks?
Yes, and the same rules apply to us as to anybody: the tank belongs to the supplier and the arrangement has to be dealt with.
Is this ever a reason to sell for cash?
No. This is admin. One call and one line in the contract deals with almost every version of it.
What is the first thing to do?
Ring the supplier and ask whether the tank is theirs or yours. Everything on this page depends on that answer.
We buy houses, so read the last section knowing that. We are not gas suppliers. Tanks are governed by the agreement you signed and by that supplier's own practice, which varies, so the tank agreement and a call to the supplier are the authority here rather than any article.