You need a Phase I Environmental Site Assessment – it can be a bit of an overwhelming undertaking. The biggest concern our clients have in the beginning is cost. Typically, Phase I ESA’s come as a surprise, therefore many sellers haven’t budgeted for it. As a result, many opt for the “cheaper option” – going with another assessment provider that competes solely on cost, and in turn hiring us afterward to get the job done right. Here are a few reasons you should avoid a cheap Phase 1 ESA.
So how much does a Phase I ESA usually cost?
That’s a difficult question to answer, but here’s a quick answer. Typically, a Phase I Environmental Assessment can range from $1,500 to $6,000, but it can grossly vary depending on the conditions of your property, what needs to be inspected, and many other factors. However, this range is a general rule of thumb in terms of what you can expect to pay for a Phase I ESA.
The dangers of an inexpensive Phase I Environmental Site Assessment
If you find a consultant who prices your Phase I ESA at the low end, or lower than this price range, beware! Anything less than $2,000 should raise a red flag. Why? Keep in mind that the expenses for the contractor to even complete a Phase I ESA run close to $1,000 (e.g., database searches, agency visits, site visits), not to mention the time needed for a site visit (usually at least 4 hours if done properly.)
The dangers of a cheap Phase 1 ESA is that the end product you get from the consultant is not compliant with current regulations. We’ve seen many clients pay very little for a Phase I ESA. The result is an inspection that was not completed in a thorough manner, resulting in even more work (meaning, more money out of your pocket.)
Here are a few questions to ask a consultant when inquiring about a Phase I:
- Will you visit the environmental agency if there are files available?
- If the consultant says no, move on. They should always check with the environmental agency during a Phase I ESA.
- How long will you spend on site?
- You typically should expect a consultant to spend at least half a day or more on site.
- What are the qualifications of the person doing the site visit and writing the report (not the person signing off on the report, but rather the person actually doing the work)?
- If you’re getting a Phase I done to provide CERCLA liability protection, then it must be completed in accordance with the current ASTM standards (ASTM E1527-13 as of writing this) and the All Appropriate Inquiry (AAI) rule (found at 40 CFR 312). But what does that mean? The ASTM standards dictate how a Phase I ESA is conducted, and who can conduct it. The person who can conduct a Phase I ESA, as per ASTM standards, is considered an ‘Environmental Professional’, or EP for short. Let’s make this crystal clear: if your Phase I ESA was not conducted by an environmental professional, then it doesn’t qualify for CERCLA liability protection. Basically, if an EP didn’t conduct the Phase I ESA, then your Phase I is null. If that’s the case, you will be held liable for contamination due to releases of hazardous substances or petroleum products at your property, even if you just acquired it, and even if you had nothing to do with the releases (such as if they happened in the past).
- How long have you been in business?
- This one doesn’t need much explanation – the more experience, the better.
- Have you ever been sued?
- If the answer is yes and you’re still considering working with this consultant, definitely do your due diligence and find out the exact details of the case to understand what went wrong. We recommend you avoid working with anyone who has been sued, however.