Green Building- Interesting Third Party Issues

Originally posted 2009-08-24 09:00:00.

Construction ContractAs I was following some of the posts by @imadnaffa on Twitter, I came across a post by a consultant that guarantees LEED Certification.  This got me thinking about the myriad issues relating to the third party certification aspect of adding such certification to construction contracts and the relationship of consultants to this process.

Much has already been said, particularly at the Green Building Law Update, a great blog by my friend Chris Cheatham (@chrischeatham on Twitter), relating to the queasiness that overcomes a construction attorney at such guarantees.  Many aspects of any “guarantee” need to be clarified.  What about the energy reporting requirements that USGBC has imposed?  Will this, and the seemingly unlimited time horizon of such reporting be included?   Does any guarantee only kick in at the initial stage and the consultant then is no longer “on the hook?”  What about continued commissioning and the vagaries of later behavior by facilities managers?

Also, the use of third parties as opposed to just USGBC or GBCI “officials” adds even another layer to this uneasy feeling I get when looking at this guarantee.This adds a new layer to the guarantee.

While I can see the marketing and business potential for such a guarantee, these are questions that I feel need to be answered.  I am always wary of long time horizons in construction related matters.  The longer the time horizon the more murky the liability issues become and the harder it is for a contractor or consultant to control its destiny.  I am interested to see how this plays out in the future.

Please share your thoughts on this debate with a comment below.

The energy reporting issues have been discussed at length here at Musings and elsewhere, I recommend that you check out that discussion for further thoughts on this issue.

Update:  My friend @stephendp (A/K/A Stephen Del Percio of the Green Real Estate Law Journal) has weighed in on this debate here.

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15 Responses to Green Building- Interesting Third Party Issues
  1. Mark Wills
    August 24, 2009 | 10:24 AM

    What are your thoughts on an enforceable green building code (e.g., the ICC/ASTM/AIA effort [the Int'l Green Construction Code {IgCC}]) as an alternative?
    .-= Mark Wills´s last blog post ..MCWatAIA: "One is not born into the world to do everything, but to do something." – Thoreau #quote #fb =-.

  2. Christopher G. Hill
    Twitter:
    August 24, 2009 | 10:30 AM

    I need to review it, but it could work. I still have worries about time horizons and enforceability/liability. The devil is in the details.

    Thanks for the comment Mark.

  3. [...] Continued here: Green Building- Interesting Third Party Issues | Construction Law … [...]

  4. Tim Hughes
    Twitter:
    August 24, 2009 | 1:13 PM

    Add in the kicker that they limit liability on the guaranty to return of the LEED administration fee and the risk goes way down. I have only read what others are reporting on it, but that was Chris Cheatham’s take-away:
    http://www.greenbuildinglawupdate.com/2009/08/articles/legal-developments/why-energy-aces-leed-guarantee-is-brilliant/

    I still side with you though … with all these arguable extensions of limitations periods, the guaranty has risks. Limitations of liability are nice, but they are not necessarily entirely foolproof.

  5. Christopher G. Hill
    Twitter:
    August 24, 2009 | 1:25 PM

    Thanks Tim! I read Chris’ analysis and it’s a good one. I look forward to his comments on my less “optimistic” view of these guarantees.

  6. Tim Hughes
    Twitter:
    August 24, 2009 | 1:30 PM

    I think we both come with the built-in bent of not wanting to tamper with Virginia’s very favorable rules on accrual of statute of limitations.

  7. Rich Cartlidge
    August 24, 2009 | 1:51 PM

    Chris,
    As Chris Cheatham pointed out this particular guarantee is brilliant when you account for the limitation on damages. However, I am very weary of any consultant, builder, or other entity that promises certification.

    Mark,
    I think that the shift towards a green building code with a viable enforcement mechanism is the catalyst that will take green building to the next step. Without an enforcement mechanism much of the current legislation and mandates are nothing more than flowery wishes.
    .-= Rich Cartlidge´s last blog post ..What Can The Green Building World Learn From The Health Care Debate? =-.

  8. Christopher G. Hill
    Twitter:
    August 24, 2009 | 1:55 PM

    Thanks for your two cents Rich. I look forward to working with you at Build2Sustain

  9. csstone2138 (csstone)
    August 24, 2009 | 5:20 PM

    Twitter Comment


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  11. [...] and homeowner options to avoid foreclosure. Here is a rundown of our top 10 posts: 1. Green Building- Interesting Third Party Issues – constructionlawva.com 08/24/2009 As I was following some of the posts by @ imadnaffa on [...]

  12. [...] the problem of human interaction with buildings, and the time horizons for such reporting, create potential contractual liability for general contractors and architects that must be addressed. These must be addressed even sooner [...]

  13. party certification
    April 7, 2010 | 8:42 AM

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About Musings

I am a construction lawyer in Richmond, Virginia, a LEED AP, and have been nominated by my peers to Virginia's Legal Elite in Construction Law on multiple occasions. I provide advice and assistance with mechanic's liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.

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