Brenda Kellen: How does the propane in my tank get accounted for if I sell?
Thoughts on Real Estate
Often times the real estate contract will stipulate the terms for pro-ration. Typically, a day or two before closing, the seller reads the gauge on the tank and determines the amount of gas (by percentage point) that is left in the tank. Call the propane provider with this information and ask them to calculate the amount in gallons relative to the percentage and tank size, then multiple the number of gallons by the price that was paid at the time of most recent fill. This number is what the title company will use on the settlement statement to debit buyer and credit seller. Example: 500 gallon tank at 50% = 250 gallons multiplied by $2.25 = $562.50.
FYI – if the tank is leased, the propane company who owns the tank is the only company who will fill it. If the tank is owned, any propane company can be called to fill the tank.
A couple other propane tips – this last winter the heavy snowfall made access to propane tanks sometimes impossible. For 2nd homeowners especially, this can be a major challenge. Propane is likely the heat source for the home and when the tank is empty, there will be no heat. No heat and cold weather = frozen pipes. When the house is brought back up to temperature, the pipes will likely compromise and leaks will show themselves. Be sure to have your tank accessible, set up with the propane company for automatic fills and stay in touch with the company to confirm your tank is being maintained. I have dealt with the consequences of a frozen home more than once and it is very difficult, time consuming and expensive to repair. Even more so if the property warms up with no one home and flooding occurs as a result of the broken pipes.
Check to see if your propane company offers any discounts for long term contracts or signing a contract during the summer months when usage is lower than the winter months and pricing may be more competitive.
Q. If there is a well on the property I am buying, does this mean I own water rights?
A. No. The well is a permitted water usage; water rights are transferred via special warranty deed and are typically expensive. Obtain a copy of the well permit to determine the allowed usage. Can you use the water indoors, outdoors, watering livestock?
Brenda Kellen has been selling for over 10 years with Omni Real Estate and helps buyers and sellers in both Grand and Summit County. If you have questions/comments or need assistance, please e-mail email@example.com or call 970.485.1115
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