Today I am speaking once again on the D.C. Green Building Act "performance bond" issues (see slides in this post). I have a new message for this presentation because, frankly, I am not certain we are getting anywhere. If you need some background, here are all of the Green Building Law Update posts regarding this hot topic.
I have come up with a best case and worst case scenario for the D.C. green bond requirement. Make no mistake, neither scenario is very good. Here is the best case scenario.
First, the surety industry is able to come up with a bond that works for the Act's bond requirement. Even better, by mandating green building, D.C. has more green buildings then any city in the nation.
But here is where things start getting bad. Some projects fail to achieve LEED certification. The District of Columbia then has to call on the bond. The Surety has two options at this point. Either the Surety can forfeit the bond amount to D.C. or the Surety can defend the debtor (in this case the developer) against D.C. In both scenarios, LEEDigation will ensue.
What will this LEEDigation look like? The Surety will file a lawsuit against the Architect or Contractor, blaming them for the project's failure to achieve LEED certification. The Architect will file an additional lawsuit blaming the Contractor, or vice versa. Oh, and the Architect will also file lawsuits against all of the Engineers. The Contractor will go a similar route and sue all the Subcontractors.
This is the best case scenario.
When you mandate green building certification and require an enforcement mechanism, you are ensuring there will be failures. Those failures will lead to LEEDigation. Bottom line, best case scenario? D.C. becomes the hotbed of LEEDigation.
Unless of course some other jurisdiction implements another LEED mandate sooner.