A Phase 1 Reliance Letter cost can vary. However, typical prices for a Phase 1 ESA Reliance Letter range from $250 to $600. Moreover, prices for a Phase 1 ESA and Phase 2 ESA Reliance Letter together can range between $850 and $2,000. In addition to the time spent preparing this legal document, the supplemental fees are also based on the original cost of the work performed, as well as the extension of liability. In most cases, environmental professionals will charge 10% to 20% of the original cost of work, to prepare an additional Phase 1 Reliance Letter. Other companies might also implement a flat rate or minimum cost for this service. Updated January 15, 2019.
A Phase 1 ESA Reliance Letter cost is not the same as a Phase 1 Environmental Site Assessment Report Cost. A Phase 1 reliance letter simply grants legal ability for other parties to use and rely on an existing Phase 1 ESA report. Thus it is usually a fraction of the cost of a complete Phase 1 Environmental Site Assessment Report.
A Phase 1 Reliance Letter is a legal document which authorizes additional parties to rely on an existing environmental report. A reliance letter essentially serves as an extension of liability, on behalf of the Environmental Professional. As a result, the additional fees typically apply. In the case of writing reliance letters for lenders and the SBA, Environmental Professionals must document their understanding that the property serves as collateral for the loan. Additionally, the professional must legally authorize the lenders to use and rely on the Environmental Site Assessment Reports. Moreover, a Phase 1 Reliance Letter should certify that the assessments are in compliance with the recent ASTM Standard, and meet the qualifications of the Brownfields AIA for Innocent Landowner Liability Protection.
Despite what Clients may think, there is more to a reliance letter than it seems. Preparation time for these letters plays almost no role in the cost. The most significant pillar of a Phase 1 reliance letter cost is the extension of liability on behalf of the environmental company. And according to our counsel, the legal liability that comes with a Phase 1 reliance letter poses a higher risk than assumed in the price of the original contract. Consequently, the environmental professionals are expected to charge for this.
It is widely known in the industry that Phase I Environmental Site Assessment reports age and expire. Certain aspects of a Phase 1 ESA report have a 180 day limitation to meet AAI and CERCLA protection laws. At this time, the Small Business Administration (SBA) will accept a Phase I ESA within 1 year of the date completed. However, many other lenders may stick to the 180 days. The SBA’s 1 year acceptance policy is a deviation from EPA’s AAI requirements.
The overall cost for reliance letters is variable. Thus, we don’t recommend solely relying on these approximate price ranges. This information should be regarded as a learning tool. For a proper estimate, call Geo Forward at (888) 930-6604.
Ultimately, the cost will depend on the price of the original assessment. A larger scope assessment, and thus more expensive, will likely have a higher reliance letter cost. Generally, consultants charge anywhere from 10% to 20% of the original cost of work.