Thoughts on construction law from Christopher G. Hill, Virginia construction lawyer, LEED AP, mediator, and member of the Virginia Legal Elite in Construction Law

Green Building- Interesting Third Party Issues

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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16 Responses to Green Building- Interesting Third Party Issues

  1. 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.

  2. 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? =-.

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  4. […] This should not be an advisable work-around as the CA-cert is not yet distributed with …Green Building Guarantees and Legal Issues | Construction Law …A discussion of third party LEED certification guarantee issues relating to time horizons and […]

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