Shakespeare may have had it right in Henry VI (Part Two): to relieve the oppression of the common person, getting rid of lawyers might be a good first step. (Trial and personal injury lawyers, of course, would disagree with this assessment). Nonetheless, we are stuck with them (including my two sisters), so what do they have to do with green buildings?
Well, the good news is that green buildings have become so mainstream that lawyers are finding fee opportunities in advising clients about them; that’s also the bad news, because it means that green building participants (architects, engineers, builders, developers, etc.) need to be extra careful about the claims they are making about green buildings and especially about LEED certification.
In April, I gave a green building webinar presentation to the California Bar, Real Property Law construction law subsection, probably the first in the country hosted by any state bar. In California alone, according to my source, there are 22,000 lawyers who are members of the real property law section of the bar. That’s a frightening thought for anyone in business!
At the National Association of Home Builders (NAHB) National Green Building Conference in St. Louis, I heard two presentations by two very bright attorneys. Brian Anderson of Madison, Wisconsin, spoke on "legal and business issues of green building." His article can be found in Wisconsin Lawyer, August 2006. Here are some of the issues he raised:
- Does a green building produce better outcomes, in terms of energy savings, productivity, health, etc.? If that is part of the marketing claim by an architect, engineer, contractor and developer, there may be a liability exposure if these benefits are not realized, no matter what the reason.
- What are the performance expectations by a building owner and developer when they hire a professional to produce a LEED building? Are these in writing, or just assumed?
- Does the LEED certification documentation represent a higher level of warranty than a professional's responsibility of "due care"? Will your insurance cover you if USGBC denies your "LEED point" and the client falls short of the desired certification level?
- Does your LEED performance level trigger various state and federal tax credits, utility incentives or other benefits? Who’s responsible for the lost financial benefit if you don't reach the necessary LEED level to qualify for the tax or other benefits?
Based in Chicago, Ujjval Vyas is a trained architect with a PhD and law degree, who also presented at the NAHB conference. His legal advice focuses on the risk management and risk mitigation issues inherent in green buildings. Here are a few examples.
- How will the architect or engineer explain less-than-expected energy savings from a given building design? As professionals know, there are probably a dozen good reasons why a building might use more energy than predicted by computer models, including a change in building occupant numbers, a change in tenant activities, weather in a particular year, hours of operation, etc. Try explaining all that in court!
- Does your insurance cover you when you introduce new technologies that may be somewhat experimental? What is your standard of care to make sure they are going to work?
- Are you "guaranteeing" a specific LEED certification level? What happens if the owner makes poor decisions or runs out of money, so that the level can't be reached within budget or scope of the project?
- Does your LEED AP status confer on you a higher standard of care in your professional activities? If so, your liability exposure may be increased without your recognizing it.
- If you’re not a LEED AP, but 50,000 other people are, you may involuntarily be held to a higher standard of care in building design, for example to achieve greater levels of energy savings, so just burying your head in the sand is not a good posture anymore.
You can see that lawyers raise really interesting and practical business questions. I hate to say it, but you might be well advised to talk to your own lawyer about these issues before you sign your next contract to provide services to a green building project.