• Going Green? Go Thoughtfully!
  • November 12, 2009 | Author: Aileen M. Leipprandt
  • Law Firm: Miller Johnson - Grand Rapids Office
  • In the last five years, nearly every industry has been touched by the “sustainability” or “green” movement. One industry significantly affected is construction, particularly with the continued advancement and use of LEED building standards.

    LEED Basics
    LEED means “Leadership in Energy and Environmental Design.” The U.S. Green Building council developed LEED standards in 2000 in an effort to “transform the built environment.” The standards measure performance in sustainable site development, water savings, energy efficiency, material selection, and indoor environmental quality. There are four certification levels—Certified, Silver, Gold and Platinum—and multiple LEED rating systems including ratings for particular project types like schools, healthcare facilities, and retail establishments. How might LEED certification affect a project? Consider the following.

    Consider The Goal 
    Determining whether a project will be LEED certified and if so, to what level, depends on the owner’s goals. Is the owner building green to serve a sustainability mission of its organization, obtain desirable tax credits, enhance its building’s asset value through decreased operating and maintenance costs? Misunderstood expectations on a LEED project can create the potential for disputes.

    Consider The Contract
    Whatever the owner’s goal, each stakeholder should take care that the design documents, contract documents, and construction practices conform to this goal. For instance, an owner who desires certain performance attributes may request specifications with specific performance outcomes. A design professional should avoid guarantying performance outcomes or specific cost savings, since her policy of insurance typically excludes such warranties, and it is unhealthy for any project to have an uninsured risk circumstance. Similarly, a contractor should avoid warranting functionality or performance, but rather limit warranties to workmanship, materials, and code compliance. Finally, construction professionals who hold themselves out as LEED certified may be subject to a higher standard of care resulting from their representations of special knowledge of LEED construction. This could be problematic if the professional hasn’t actually developed that practical experience.

    Consider The Responsibilities
    To substantiate the necessary credits for the desired LEED certification, one must submit substantial documentation to a third party reviewer. The nature of this documentation, the parties responsible for the process, and the increased construction administration cost, should be clearly identified. This creates challenges in contract drafting when projects are conceived and commenced before LEED decisions are made.

    Consider The Legal Exposure
    Not surprisingly, LEED projects may create new legal risks. What happens if a building does not achieve the specified level of certification, if tax credits are lost, if promised energy savings are not realized? Given the relative infancy of LEED construction in this country, there are few reported decisions from which to draw conclusions. Nevertheless, insurers for design professionals are reporting receipt of “green” claims. One can easily foresee that LEED certification or performance failures may spawn a new category of “green litigation.”

    Green construction provides a great opportunity to meet sustainability goals and to create a better “built environment.” As you would with any construction project, however, you should carefully consider the roles, responsibilities, and risk associated with “going green.” The author and Miller Johnson attorneys in the construction practice group are available to assist you with any questions or issues related to this.