Originally posted 2010-05-10 09:00:01.
Here at Musings, we have discussed the issues to do with LEED de-certification because of energy reporting (or lack thereof) by the owner of the building. Remember the italicized portion of this last sentence, because the de-certification discussion has taken a new turn. Now, not only can the Owner of a building tank its LEED Certification through its own failure to comply with USGBC rules, the certification of a building can be challenged by third parties. Hidden in the USGBC LEED Policy Manual, is language granting USGBC the right to retroactively review a project’s LEED certification level on either its own initiative or based upon the complaint of a third party.
My fellow construction attorneys and friends Doug Reiser of the now defunct Builder’s Counsel Blog (@douglasreiser on Twitter) and Chris Cheatham of the Green Building Law Update (@chrischeatham on Twitter) have discussed this policy and the failed challenge by a Wisconsin group to the LEED certification of a local high school. Both of these guys have asked some great questions and I recommend that you read their analysis.
My focus here, as always, is on the “on the ground” risk management issues for contractors and subcontractors on projects seeking, and in this case obtaining LEED certification. The real issue here, from my perspective as a construction lawyer, is the further implication of third-party action in the potential liability of the construction professional who constructs the building.
For the same reasons that contractors and subcontractors (and even architects and construction managers) need to structure their construction contracts to assure that failure of a building to meet certain energy benchmarks 3, 4, or even 10 years down the road does not come back to bite them, these same construction professionals must assure that their contracts shield them from the potential liability of LEED de-certification due to a challenge like that in Wisconsin. This policy by the USGBC creates more questions than it answers, for example, how will insurance companies and bonding companies deal with the totally uncontrollable possibility of a certification challenge? How will the ghost of liabilities future (like that mangled Dickens reference?) dampen the enthusiasm for sustainable construction overall?
The Eeyore in me fears that our much-needed shift to sustainable, energy-efficient building stock will be hindered by the worries of contractors. My hope (and, yes, I do have an optimistic side!) is that by asking these questions now, we can all work to deal with them and, with some luck and good planning, create a strong sustainable infrastructure that will be around for years to come.
This debate must continue. If you comment on one post here at Musings, please make it this one because I truly do not have the answers to these questions. Because of the uncertainty relating to the legal aspects of this brave new building world, your input on this topic is invaluable.
As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.
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Great post, Christopher. A local colleague and I recently had a terrific discussion about this very topic. Our conclusion: LEED certification needs to be addressed in construction contracts – for everyone to be on the same page, and to adequately spread the related risk. Excellent, thought provoking post. I hope it gets people talking about this!
Thanks for the post Alan. I hope that this discussion continues here and elsewhere. While the answers are not clear as of yet, the questions need to be asked and addressed.
.-= Christopher G. Hill´s last blog post .. Lead Paint Rule Update =-.
I am struggling just to wrap my head around all of the issues that are created by the LEED Certification Challenge Policy. This certainly gives us a lot to talk about.
Just when I was starting to get comfortable with LEED certification guarantees (in a design-build contract), this comes along.
.-= Chris Cheatham´s last blog post .. First Ever LEED Challenge Denied =-.
Thanks for stopping by Chris! I have never been comfortable with guarantees of any third party certification. However, I agree that this new wrinkle adds a whole new layer to the issue. I hope that this does not bleed into the general sustainable building debate in a way that slows the progress in general just because of some potential issues with LEED and future liability.
.-= Christopher G. Hill´s last blog post .. Lead Paint Rule Update =-.
Chris:
I too have no answers to these questions. We have a building in Charlotte (Imaginon!) which is not meeting its LEED criteria ~18 months out from CO. It’s not clear what if anything will be done about the situation, or who may eventually be found liable.
But careful drafting of LEED goals instead of LEED guarantees would be one way to avoid the issue, assuming you can negotiate such a “goal” into the contract in lieu of performance!
Thanks for checking in Melissa. Goals is one way to do it. Another is to explicitly state what we all thought was the law to begin with, i. e. that the contractor builds what the engineer and architect designs. If the GC does that, they should be finished.
.-= Christopher G. Hill´s last blog post .. Lead Paint Rule Update =-.
For the traditional architectural practice guarantees for LEED certification are highly inadvisable, if not foolish, due to the lack of control and continuity an architect is positioned with on projects after construction ends. I consult with public agencies for LEED certification projects and make it very clear to them that we have certification “goals.” My LEED contracts state this plainly.
Melissa- Regarding the ImaginOn facility here in Charlotte, the information being reported is flawed in that the project has been in receipt of such popularity that the operating hours have increased dramatically over the baseline energy projections – the energy performance per unit scale has remained constant but the lights are on a helluva lot more than the owner anticipated during design/construction. 30% is 30% regardless if the building is on 24/7 or 9-to-5. I’m good friends with an architect of the project and he gave me low down that the newspaper was angling on which was bogus at best.