With the high cost of oil and the arrival of natural gas on the island, the question of oil in the tank can become an issue in conveyancing. Where a house has an oil furnace, it is generally assumed that the purchaser will want the oil in the tank. The vendor will normally want to be paid for it, too. What happens if the purchaser plans to convert to gas and doesn't want the oil?

The standard contract of purchase and sale says, "The Purchaser will assume and pay all taxes, rates, local improvement assessments, fuel, utilities and other charges from, and including the date set for adjustment." It does not oblige the purchaser to buy oil from the seller anymore than it requires the purchaser to order cablevision.

Conveyancing lawyers in Victoria, as elsewhere, prepare a statement of adjustments, dealing with commissions, taxes, mortgages, strata fees, and similar items. It is not generally the practice to include oil. This is left to the parties, themselves. Often the back of the statement of adjustments will include a statement like, "Miscellaneous items such as oil, utilities, water, etc. are to be adjusted and settled directly between the parties." Still there is no requirement to buy the oil.

In the case of the purchaser converting to gas, they may be entitled to say to the seller, "I have no need of your oil, thank you. You may remove it." I have even encountered ornery purchasers who are keeping the oil furnace, but who say such a thing for reasons known best to themselves. The vendor must then have an oil company remove the oil from the tank at a discount.

It would be helpful to discuss the matter of oil and address it in the contract when the house being sold includes an oil furnace. The Purchaser could be obliged to buy the oil upon presentation of a dip slip prepared by an oil company. Sometimes an oil company can be agreed upon and the oil adjusted by the oil company. Maybe the purchaser will not buy the oil. In this way misunderstandings can be avoided and time spent more profitably.

Please call or e-mail me with questions or comments you might have.