New rental property with oil boiler

Hi Jonathan,

You have two options:

1. Make the tenants pay upfront for the amount of oil in the tank, take a reading and record this on the inventory and ensure that there is the same amount in the tank at the end of the tenancy, if there isn't charge at the going rate to top up to what it was. This will often be an estimate agreed with the tenant.

2. Do not charge the tenant upfront and at the end of the tenancy the tank will need to be filled to the same level as when they moved in.

However, a tank which holds £1500 of oil is very large (around 5000 litres) and because of this i would use option 1 and fill the tank before the tenants take occupation. The problem with this is that you are asking for an additional £1500 upfront which will limit the number of people who can afford to occupy the property, however it will reduce your risk in losing all of the deposit re-filling the oil tank at the end of the tenancy.

Your best bet is to make a judgement call as to what you would accept to limit your risk at the end of the tenancy or alternatively install a smaller oil tank the most common is 1500 litres, which would limit your liability to a maximum of £500

Hope this helps

Chris

I have been in this situation as a tenant and I am afraid there is no easy answer: the manufacturers of these tanks simply do not think about the needs of tenants and landlords. The trouble in my experience is that you can't fill up an oil tank like a petrol one in a car. You are expected to order a certain fixed number of litres from the oil supplier, so you can't adopt a full-in, full-out approach in the tenancy agreement. This may not however be true with your supplier, so it's worth checking.

The only solution in my case was to rely on the gauge that comes with the oil tank, but unfortunately these are often pretty rubbish: just a plastic tube dangling out of the tank where someone has made a "full" and "empty" mark. I had a partly-full tank on move-in, which was at the X centimetre mark on the gauge, and a partly-full tank when I moved out, at the Y mark. My landlord and I had to negotiate what the pro-rata difference was between the X and Y figures, and just trust that the full and empty marks had been made correctly ten years ago!

If you are worried about disputes and the quality of your gauge, I suggest you investigate with tank manufacturers what is available in terms of gauges, and get the best one you can afford.

Also, ask your neighbours about local bulk-buying schemes. In many rural areas and villages, people club together and get a better price for their oil purchased in bulk - the supplier benefits because instead of their tanker doing lots of small deliveries spread all over the county, it just visits one village and does 10-20 people in a series of short runs on the same day.

Hi Jonathan, we have a lot of property in the villages that have oil fired central heating. our standard advice to landlords is to fill the tank at the start of a tenancy and ask for it to be filled at the determination of the agreement. It is then critical to do an accompanied check in and in our experience take an image of the tenant next to the level marker on the tank (and ensure it is time and date annotated). As a back up we dip the tank with Bamboo Cane and photograph that as well because sometimes the gauges become blocked and fail. This works best if managed in parallel with a professional inventory. If then the tenant fails to fill the tank (if it will take £1500 worth of oil it is a 3000ltr tank) it is easy to decide how much will be owed to fill the tank.

This is a problem that has existing for centuries. Coal stocks?
Whatever the level, that level at ingo is measured and again at outgo. And the person doing the inventory needs to make an adjustment based on current market value of the stock difference.

Then you must consider the potential value of that stock when you think about deposits. A full tank may be returned empty. And then there is the oil price - last year $110/b. Now $50/b. Next year $?/b.

As an earlier respondent has said, it is a common issue. It applies to coal and bottled/tank gas as well. Reputable firms dip tanks etc. there may be error margins but thats life.

Just as I photo meters and time log the photos, I would do the same with oil tanks.

I switched to mains gas once oil got to $20/b. Cost a lot to install but have saved many times over.

Hi Jonathan. This is a good question to ask and it can be tricky. We have a couple of properties with oil heating. As Tony says the gauges are not very accurate.
We aim to hand over to new tenants with at least enough oil for a 3 or 4 weeks but no more and tell them to watch it like a hawk until they are used to how much the level goes down per day. If you give them a full tank and then they do a midnight flit owing you rent you'll never get the value of the oil back. And at the end of the tenancy they will always feign surprise at how little oil there is..." but we only filled it up a couple of weeks ago ..........'
When we do the inventory (which they sign) among other things we record the level of oil on the indicator and record this in cms. We can approximate the amount of oil by knowing the size of the tank and the height of the indicator when full. Ours are small 1000 litre tanks and the indicator is approx 100cm high when full so the maths are pretty easy (the electronic ones usually have divisions of 1 to 10.) Our tenancy agreement has a clause which states that they must leave at least as much oil as they started off with as noted in the inventory but doesn't say we have to pay them for any extra (although in a legal dispute I'm not sure if this would hold up). It works in a similar way to some hire cars, and did you ever hear of them paying you for the extra fuel you've left !?
If they know they are leaving tenants are normally able to adjust their usage and/or order min amounts (500 l) so that they don't leave too much behind.
The worst scenario is when they leave it virtually empty because you then have to order the min delivery amount. In reality we've usually been left with about the same amount they started with or a bit less and we've charged them for just the shortage and they've been happy with that.
We did once buy back a full tank from a tenant who had to leave unexpectedly and had been the perfect tenant in every way for a few years so we thought that was fair. Maddeningly, in that case we then discovered a small leak in the tank and decided to change it while we were between tenants so we had to decant all the oil which took forever. Luckily we were able to flog most of it to our tenant next door !
On another note, take extra care to explain how it works with any tenants who say they have never had oil heating before. It is virtually guaranteed that at some point they will let the tank run dry because they forget to check it regularly and then claim that a) the boiler is not working b) the oil is all leaking out c) some one has been in and syphoned all their oil. You will then have to organise to get the plummer round to bleed the system once they've filled up with oil before the boiler will fire up again. Only costs about £40 but you should charge this to the tenant. Our agreement specifically mentions the responsibility of the tenant for this and we always make a point of reminding them. Also it is worth showing them how to check the level and to tell them about the bamboo stick method if in any doubt. Some have a little green ball in the tube which shows the level and when muck goes inside the tube the ball can get stuck, so they must look for the oil level itself not just the little ball.
Good luck with the property.

For the price of a tank full of oil at £1500 a time, I would install a combi boiler that runs on propane gas.

Good morning. The running costs of LPG are so much more expensive than Oil, especially now heating oil prices are the lowest they have been in a long long time. Last year data showed that the average cost to heat a 3 bedroomed house in GB with oil was just £1149 compared to mains gas at £1124 and that LPG was 67% more expensive at £1924 pa. Oil prices have come down further since this data was complied making oil even cheaper. You would also have the exact same problem of telling how much was in the tank and who pays for it. You can fit flowmeters onto the oil lines so the tennant can be billed based on their usage but it would be then down to the landlords to ensure the tank is kept topped up. We can supply flowmeters and also contents gauges which work via the internet so its easy to monitor tank contents. http://www.jseed.co.uk