Form4815-FannieMae.docVIP

INSTRUCTIONS FORM LETTER OF ENGAGEMENT FOR ENVIRONMENTAL CONSULTANT This Form 4815 engages the services of an environmental consultant to perform a Phase I audit of the Property. The Phase I audit must be performed in accordance with Fannie Maes environmental requirements set forth in Part X of this Guide. You should disclose to the environmental consultant all environmental problems known to you and provide the consultant with copies of prior environmental reports. Paragraph 7 contains the insurance requirements for the environmental consultant. The types and dollar amounts of the insurance are negotiable. For example, the environmental impairment liability insurance in subparagraph 7(e) is not widespread, and may be quite difficult to obtain in certain parts of the country. On the other hand, you are strenuously encouraged to choose a consultant who carries errors and omissions insurance. If a consultant does not carry insurance, it is prudent not to use that consultant and to find one who does. Environmental consultants often try to limit their liability. Some limitations are allowable, others are not. For instance, stating what documents/records were reviewed and what inspections were performed is an acceptable limitation. Limiting the liability to the insurance coverage (assuming a reasonable amount and that Fannie Mae is named as an additional insured) may be acceptable. Limiting the consultants liability to the amount charged for performing the work is unacceptable in all cases. The form environmental letter should be sent by outside counsel to better preserve the claim that the audit is protected by the work product and attorney client privilege and is not discoverable in litigation. [FORM LETTER OF ENGAGEMENT FOR ENVIRONMENTAL CONSULTANT] [Outside Counsel Letterhead] CONFIDENTIAL ATTORNEY/CLIENT AND WORK PRODUCT PRIVILEGED  PREPARED IN ANTICIPATION OF LITIGATION _______________ ___________________________ ___________________________ ______