Propane Tank Ownership Laws: Protecting Your Investment

Many states have strict laws prohibiting propane companies from filling leased tanks owned by others. However, violations of these laws occur occasionally, with propane companies filling and billing leased tanks in defiance of state regulations.

These laws serve multiple purposes. First, they enable the propane company that owns the tank to recover the costs associated with their property, including the tank, regulators, and gas lines. Secondly, they enhance safety by ensuring that the company owning the gas system has likely conducted necessary safety inspections and leak checks.

Retailers often discover other propane companies filling their leased tanks under various circumstances. Sometimes, these tanks are located in rental properties, and the new renters, unaware of the law, seek the cheapest or closest propane supplier. In such cases, the retailer may not even know the tank is leased, assuming it’s customer-owned due to a lack of clear ownership identification.

Resolving this problem can be challenging. We recommend contacting the appropriate state agency with jurisdiction over propane companies or the authority having jurisdiction (AHJ). Evidence of tank ownership includes lease details, serial numbers, tank specifications, and records of deliveries and consumption. If you can also demonstrate that someone else is filling the tank through appliance records and degree-day calculations, the AHJ can investigate and take necessary actions.

Simultaneously, educate your customer about the law and why it exists, requesting their compliance in obtaining propane deliveries exclusively from your company.

Legal action may be necessary if contacting the propane company responsible for the violations doesn’t yield results. This could involve obtaining a temporary restraining order from a local court to prevent competitors from filling your tanks. If violations persist, seek a permanent injunction, sanctions, and damages for lost revenues.

Consider removing your tank from uncooperative customers’ properties if needed, but ensure you have proper consent and documentation to avoid legal complications. Be cautious and, if necessary, initiate a replevin action to facilitate tank removal while complying with the terms of your lease.