Tenant Must Pay Underground Storage Tank Fees

May 31, 2002

After a tenant signed a lease for a gas station and food mart, the owner had underground petroleum storage tanks installed on the property for the tenant's use. According to local law, the tanks’ owner had to pay underground storage fees for each gallon of petroleum stored in the tanks. The owner asked the tenant to pay these fees, but the tenant paid only part of them. The owner was eventually notified that the outstanding fees due—plus interest and penalties—exceeded $81,000. So the owner sued to evict the tenant and collect damages.

After a tenant signed a lease for a gas station and food mart, the owner had underground petroleum storage tanks installed on the property for the tenant's use. According to local law, the tanks’ owner had to pay underground storage fees for each gallon of petroleum stored in the tanks. The owner asked the tenant to pay these fees, but the tenant paid only part of them. The owner was eventually notified that the outstanding fees due—plus interest and penalties—exceeded $81,000. So the owner sued to evict the tenant and collect damages. The tenant claimed that the owner was responsible for paying these fees because it owned the property and the tanks.

A California appeals court ruled that the tenant was responsible for paying the underground storage tank fees. The lease required the tenant to comply with local, state, and federal authorities. Also, the fees were levied on the petroleum owned by the tenant—not the tanks. The court ordered the tenant to pay the owner nearly $95,000 in rent, damages, and attorney's fees [Andranian v. Almasad].

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