Handling Heating Fuel in a Real Estate Transaction

Handling Heating Fuel in a Real Estate Transaction
Posted By Jeffrey Hogue @ Nov 23rd 2016 3:10am In: Real Estate

If you have not sold a home in the past 15 years, be aware that heating fuel is now assumed to be part of the real property. Today, the fuel will be included with the sale of the home at no charge to the buyer if there are no changes to the standard Agreement.

When selling a home, there are times when it is not exactly clear what stays and what goes. Before 2000 it was clear that heating fuel was not included in the sale. Often the buyer reimbursed the seller for any oil, propane, coal, or even cords of wood on the property at settlement. Things have changed.


The people who fashioned the present Pennsylvania Standard Agreement for the Sale of Real Estate have decided to assume or suggest that heating fuel IS included as part of a home sale.


Paragraph 7, of the Agreement, Fixtures and Personal Property, states as follows: “INCLUDED in this sale, unless otherwise stated, are all existing items permanently installed in or on the property, free of liens, and other items.” Included in the list of items are cooking and heating fuels stored on the property at the time of settlement. The key to this paragraph are the words “unless otherwise stated.” Unfortunately, not everyone, including some real estate agents, combs through the Agreement efficiently enough to catch this term and ask the seller if they are willing to leave the coveted fuel at no cost to the buyer.


Home sellers often schedule oil and propane to be delivered by suppliers automatically. This practice could be an issue for a seller when their home goes under contract, there is no clear understanding they will not be reimbursed for the fuel, and they get an automatic fuel delivery a week before settlement.


In past years, when oil prices were through the roof home sellers would sometimes call their fuel delivery company and ask to have the heating fuel pumped out before settlement so they could get a credit. If the home had a wood burning fireplace and the seller stocked cords of lumber on the property they would ask if the buyer wanted to purchase it. When the seller was told that any wood on the property at the time of settlement would remain as part of the sale, they sell it to someone else before settlement.  While these practices comply with the agreement, they are not always admired by the home buyer and can set a bad tone for the transaction.


My solution to the heating fuel hot potato involves understanding, approval, and disclosure. I have the heating fuel inclusion discussion with the seller at the time I list their home. I revisit the conversation when an agreement is submitted and ask if the seller wants to include the fuel or not. If they want the fuel included I advise them to stop any automatic heating fuel delivery and leave a minimum of one-quarter tank for the buyer. I refer to this as the “good seller rule.”


If I represent the buyer, I am sure to contractually ask for the seller to leave no less than one-quarter tank of fuel for the buyer at the time of settlement. The buyer and I check the fuel level at the pre-settlement walkthrough to make sure the seller complied.


Personally, I am not sure why the heating fuel inclusion change was made. I do not understand how fuel oil, wood, etc. is considered a fixture that is permanently installed on the property, Fuel oil, wood and the like seem to be consumables and not fixtures unless you are making counter tops out of coal, of course.


Anything can be accomplished in an Agreement if you consider understanding, approval, and disclosure.


Knowledge is Power!

Jeffrey C. Hogue

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