This Post is Really Important and Is Not for the Faint of Heart

Disclaimer:  If you are sensitive to or frightened by new risks and liabilities in the green building industry, please skip this post.

On Monday, I highlighted the USGBC's decision to create requirements to ensure a building's performance matches modeled energy savings.  I finished the post by asking, what happens to projects that do not comply? 

Okay, brace yourself

NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.  IF SUCH A CIRCUMSTANCE OCCURS, REGISTRATION AND/OR CERTIFICATION FEES WILL NOT BE REFUNDED. 

It is time to introduce a new word into your green building vocabulary:  de-certification. 

Everytime I start thinking about the implications from de-certification, my head starts spinning and I have to sit down. 

It just happened again. 

I have definitely not uncovered all of the potential issues, but here are three that immediately jump to mind:

1.  De-certification makes regulations tied to LEED certification very difficult to enforce.  What does a jurisdiction do if a project is de-certified?

2.  Insurers and sureties are going to be extremely concerned about coverage issues after design and construction work is complete.  Could an architect or contractor remain on the hook for potential de-certification long after a project has been completed? 

3.  For you owners out there, the commitment to provide energy data must carry forward if a building or space changes ownership or lessee.  How in the world do you write this into a contract? 

The room is starting to spin again.  Please elaborate on any additional risks and liabilities implicated by de-certification in the comments.

Photo:  Kevin (iapetus)

Update:  Also check out Stephen Del Percio's detailed analysis of the Minimum Project Requirements

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Green Building Law Blog - July 10, 2009 1:17 PM
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Comments (31) Read through and enter the discussion with the form at the end
James Bedell - July 8, 2009 9:39 AM

Yet again you hit on a very important point. I think this is points out yet another flaw in thinking of LEED as a regulation. It's nothing more than a rating system and until certification is built into real building code it is totally unenforceable.

An example. No matter who owns or leases a building it must comply with fire/safety code, always and forever. This is questioned, nor is it a problem. Local inspectors evaluate and certify buildings periodically and when they are sold. Until we reach this level of certification and enforcement, we will not have a real green building movement.

Will - July 8, 2009 9:55 AM

Which Minimum Program Requirements involve post-construction or post-occupancy compliance? Is it just the sharing of data, or is there another way a property could be de-certified?

From a lender's perspective, if data sharing is the only MPR at risk, then it probably will not be a problem. Underwriters will likely treat it like a conditional tax abatement or other annual reporting requirement and make adjustments in proceeds or the loan docs.

David Bourbon - July 8, 2009 10:03 AM

I agree with James. As long as LEED Certification remains fairly subjective, there are no grounds upon which to enforce it. Governments can rely on the intent (built to comply with LEED standards,) but mandating certification is unrealistic until the standards are incorporated in the building codes.

Christopher Hill - July 8, 2009 10:33 AM

Enforcement of building codes etc, aside, what about contract and liability issues? Who is responsible for a decertification of a building? Will it depend on what system "caused" the decert? The lengthened time horizons are what scare me even more than that picture!

Rich Cartlidge - July 8, 2009 10:58 AM

I think Chris Hill really identifies the main issue that your post raises. The lengthened time horizons! Will you contract and establish a cut off date for liability or will the statute of limitations begin to toll when the building loses its certification. Really scary!

Stephen Del Percio - July 8, 2009 11:13 AM

I think my friend Brian Anderson made a really good point recently at GRELJ that's applicable here: lawsuits are bad for marketing. If GBCI and/or USGBC have de-certification authority, do you really think they'll choose to open that legal can of worms by exercising it?

Michael Anschel - July 8, 2009 11:35 AM

Chris,
You have touched on one of the hot subjects within USGBC and the Green Building community that we have been debating for years. A recent study of certified and non-certified buildings showed LEED certified buildings were consuming more energy than their un-titled counterparts.

The discussion at the city and state level has been focused on how to create regulations tied to public financing that can address this issue. The Building Operators Certification program out of Chicago is having great impact, reducing energy consumption on buildings by as much as 20% (independent of LEED)

Ultimately we need to acknowledge that LEED, Green Globes, and other building certification programs are only certifying the process of constructing a building, and were not designed to do anything more.

Certification cannot be revoked for poor operations since the process under which it was created and subsequently certified has not been altered and there was no commitment or mechanism in place to govern or instruct operations. (Should USGBC choose to venture down this path I'm sure you will be busy.)

Nice work!

Michael

Will Clark - July 8, 2009 11:40 AM

Stephen, Chris(x2):
Is there an ADR mechanism in LEED like there would be in an AIA contract? If de-certification should occur (and I still only see MPR #6 -- 3-5 years of reporting as the only post-construction hindrance) could it occur via arbitration rather than a lawsuit?

Mark B - July 8, 2009 12:03 PM

Michael,

You state that a recent study showed that LEED buildings consume more energy than non-LEED buildings. However, care must be taken as to how you interpret the data.

Researchers at National Research Council Canada – Institute for Research in Construction conducted a re-analysis of data supplied by the New Buildings Institute and the USGBC on measured energy use data from 100 LEED-certified commercial and institutional buildings. The study reported that the median energy use intensity (EUI) of the LEED buildings was 32% lower than the mean EUI in the 2003 Commercial Building Energy Consumption Survey (CBECS). However, 28–35% of LEED buildings used more energy than their conventional counterparts.

In addition, the measured median energy use for the LEED buildings was 28% lower than code baseline energy use. However, 1 in 5 bldgs used more energy than the baseline.

Sources:
1. C. Turner, M. Frankel, Energy performance of LEED for new construction buildings, New Buildings Institute, 2008.

2. Guy R. Newsham, Sandra Mancini, Benjamin J. Birt. Do LEED-certified buildings save energy? Yes, but…. Energy and Buildings 41 (2009) 897–905.

Christopher Hill - July 8, 2009 2:18 PM

Michael,

Unfortunately, the various governmental entities want to use LEED and other methods for more than that. This is where, for better or worse, some work for lawyers comes in. Not just on litigation (though that will occur regardless) but on crafting contractual documents that try to meet the energy benchmarks and at the same time protect the parties. This is going to be a brave new world and I for one am excited to see where this leads (or is it "LEED"s? (sorry couldn't help it).

Nicolas M Pacella & Associates - July 8, 2009 2:36 PM

Is this true, that 1/3 of LEED buildings use a greater amount of energy than their conventional counterparts? Down what path are we leading people? We are assuming that this is a process that will reduce energy use, in all cases. If this is not so then why would a building owner expend greater funds to promote a 'legacy' that does not reduce his/her operating costs?

Peggy - July 8, 2009 5:06 PM

These are good points, Chris, and decertification is a sticky wicket to say the least. That said, what use is an LEED certified building if it is only "green" before it's occupied? The implementation of actual use standards seems the only realistic direction for LEED to go.

As my colleague notes in his post, http://www.energycircle.com/blog/2009/07/08/leed-v3-opportunity-make-buildings-energy-consumption-public/
"LEED label risks rendering itself meaninglessness when a LEED certified building - which may count among its "green" credentials a bike rack and a bamboo spice cabinet - can continue to guzzle energy like a Hummer with a gas leak."

Meng Li - July 8, 2009 5:11 PM

The study showing 1/3 of all LEED certified buildings use more energy than other buildings is done by the New Buildings Institute along with the EPA.
Here is the link to the study:

http://www.newbuildings.org/downloads/Energy_Performance_of_LEED-NC_Buildings-Final_3-4-08b.pdf

As to how could so many LEED certified buildings underperform, one has to bear in mind that LEED credits on energy performance are assigned based on ESTIMATES done via energy modeling softwares such as eQuest or EnergyPlus.

Estimates are only as good as the assumptions underlying them. Faulty assumptions or modeling practices by engineers or consultants do lead to very misleading results.

To check out some spectacular examples of when estimates gone wrong, one need to look no further than the ongoing unraveling of the financial markets...

Jeff Howell, Esq. - July 8, 2009 5:34 PM

Isn't it most important to understand the reasons behind buildings not operating at the level expected based on the level of LEED Certification earned? If poor energy performance is based solely on inefficient operation of the building, then how can you hold architects or contractors of the building responsible? Should operations and maintenance be a required aspect of certification? Doesn't the MPR effectively require this anyway, even if only for 5 years?

Chris Cheatham - July 8, 2009 6:16 PM

Whoa, lots of comments today.

@James Bedell @David Bourbon- I agree with you that LEED was not meant for regulations. In fact, the USGBC has said the exact same thing at forums I have attended. Look for ASHRAE 1891.1-P to create a codified version of LEED that can be used to regulate.

@Will - Don't hold me to it, but I just took a look at the MPR's and they all appear to be design or construction related. Not post-construction related.

@Christohper Hill @Rich Cartlidge - good question. In the end, the contract(s) will determine who is responsible. Sounds like a contract revision may be necessary.

@Stephen Del Percio - I will answer your question with another question. What is worse for USGBC marketing, LEED projects that do not perform or LEED projects that end up in litigation. I would argue the former.

@Michael Anschel - Thanks for the comments. I actually think the USGBC will venture down the path you mention. More on this later.

@Mark B - Thanks for the follow up comment. I will definitely take a look at those studies.

@Nicolas M Pacella & Associates @Meng Li No matter how LEED buildings have performed in the past, I think it is great that they are taking steps to rectify problems with future building performance.

@Jeff Howell, Esq. - We are on the same wave length. Thanks for the comment.

Rich Cartlidge - July 8, 2009 6:29 PM

@Jeff Howell, Esq.
I think that you are correct architects, and contractors cannot be held responsible for building operation. I think what we will ultimately see in this area of the law is that building owners will need to have green leases, and education/operation manuals available for all of their tenants. As I discussed earlier this week even the best designed building will never perform to its design expectations if the systems put in place to save energy are overridden by tenants who do not understand their proper operation.

Sara Sweeney - July 8, 2009 6:45 PM

This has been a great discussion. As an architect/sustaianbility consultant, I wonder most about the insurance side in terms of my professional liability. Do I even dare bring this up with my insurer? It boggled their mind figuring out how to insure me as a LEED consultant.

Then on the other side, I am concerned that potential clients will see this requirement and think "you know, who needs LEED certification" thereby partially defeating the intent of the rating system to raise environmental awareness and responsibility.

I think what USGBC did with respect to instituting requirements which address the performance gap -which you write about the other day Chris, is an excellent and much-needed step. This however, goes a bit too far too fast in my opinion, and although well-intentioned, could turn off alot of folks real fast.

Chris Cheatham - July 8, 2009 6:52 PM

@Sara Sweeney - Today must be bizarro day as I actually agree with what the USGBC did. In order to institute requirements to address the performance gap, the USGBC had to have an enforcement mechanism. The only "stick" the USGBC has is the certification it gave out. So they threaten to take away certification if the requirements are not met.

Anyone have other ideas of "sticks" the USGBC could use?

Marc Kleinmann - July 8, 2009 7:41 PM

I agree with Michael's comment. There needs to be clear differentiation between the process of building a structure and operating a structure. The process of certification covers just that - how a structure is built. Operating a structure has nothing to do with this certification.

Great post.

green2green - July 8, 2009 9:12 PM

i am new to this entire area, but i have to admit, in preparing for the exam, a number of questions occurred to me, mostly pertaining to issues of compliance. if these standards are not going to be enforced, why bother at all? how would that be different from greenwashing: so the question becomes, who better than the usgbc to "enforce" compliance of their rating system? why should a project maintain the certification if it doesn't comply with the standards of the certification?

if a project cannot meet the mpr, then claiming that it's a LEED project is misrepresentation of information, isn't it?

Preston - July 8, 2009 9:15 PM

I've not had a chance to really go through the MPRs, but I wonder how much of this is standard risk mitigation for the USGBC. The question I'm asking is: "Why would the USGBC not want their system to apply when these MPRs have not been satisfied?" What's behind each MPR? Preemption, carveout to LEED approval when f/s/l law conflicts, public perception issues, jumping the gun on certification, etc. Just thinking out loud ...

Michael Kawecki - July 8, 2009 9:59 PM

You know, I'm as much for 'wearing a tinfoil hat to keep the government mind control' theories as the next guy, but isn't this quite a leap of judgement? The MPR's are intended to stop some of the abuse that is going on. Not every project is a LEED project, nor should it be. I had this argument a couple years ago - large park project wanted to be LEED certified. The only structure on 15+ acre park was a 600 sf concession stand and public restrooms. But, it had significant mechanical ventilation for other reasons (if I tell you why, it will give the project away). They wanted to go LEED. But there are no regular occupants, and obviously little building. You can always build sustainable, but not always LEED. The Sustainable Sites Initiative is a better fit for this type of poject.

This is what the MPR's are intended to prevent. You should talk with USGBC and hear some of the projects that have come through - tollbooths, boats, the list goes on.

The MPR states that all certified projects must commit to sharing with USGBC and/or GBCI all available actual whole-project energy and water usage data for a period of at least 5 years. I would imagine that this information is intended to be used for case studies and trending data, especially considering some of the other cost studies that have been released over the last year. It does not say anywhere (or even insinuate) that if this data does not match the design scenario, that certification will be revoked.

Also, actual data will never match design data. There are thousands of variables that affect how much electricity a building uses. How do you model a sticky door closer that doesn't close the door all the way, and allows cool air to rush out the front door for six months?

A design model has to be simplified in order to be usable - that means the variables have to be reduced or normalized. No project in real life is going to match a facility that is modeled 100% occupied 270 days of the year based on average temperatures.

I think you are reading way to much into this.

You can read the full MPR's here - http://www.usgbc.org/DisplayPage.aspx?CMSPageID=2014

Gregory Arkin - July 9, 2009 12:12 AM

Being a general contractor and currently in the business of providing the design and analysis tools for architecture, engineering and construction, I think I'll throw in my two cents.

Having been involved with some building performance analysis tools and having dealt with architects and engineers for the last 5 years, I approve of what the USGBC is doing and I think I have a possible answer the question of increased energy use.

I hate to use the term greenwashing, but I don't believe very strongly in the quality of the software and analysis tools currently being used by a great number of firms. I think the mainstream CAD technology doesn't have the capabilities of truly gathering the synergistic nature of thermal properties, daylighting, ventilation and energy use. I think LEED v3 with it's increased emphasis on various points makes it so simple.

Whether you believe in LEED, the USGBC and everything surrounding it, the fact of the matter is, it's about reducing energy use and having healthier buildings. I haven't done the research yet, but I'd imagine that people living, working, shopping and studying in green buildings will be healthier, have fewer sick days and require less medical care. The tradeoff to our health care costs should offset the additional costs for green buildings. Perhaps people working in green buildings should have lower medical insurance rates.

What is the point of enhanced commissioning? Checks and balances to ensure that the design, engineering and construction process follow the mandates of LEED and the owner. Is it not logical to have additional checks and balances to ensure that the building maintain it's reduced energy use in order to maintain it's rating?

Elevators get inspected every year by local governments. We all have to periodically take eye exams for our driver's license. Many professions require continuing education credits to maintain licensure. Commercial pilots are required to get a medical exam every 6 months. Requiring buildings to maintain the levels for which they gained their ratings, would seem to enhance the worthiness of a LEED certified building. No more greenwashing. Owners required to maintain their buildings. If you didn't threaten decertification, what would compel owners to maintain their buildings and investments in saving energy.

Liability? Contractor and designer being held accountable? Same rules should apply as for regular buildings. One year warranty. If the building is designed and built and has real energy savings, there should be no worries about decertification.

To finish off my late night rambling, I'm heading down the road of what technology is used in the initial design and analysis. In terms of full disclosure, I sell Revit, Green Building Studio, Ecotect and IES, all products that directly work together to create accurate building performance analysis. So many architects and engineers try to cut corners with the amount of money invested in architecture and engineering, that I don't know how they magically create the calculations to satisfy the LEED credits. The beauty of these products is that they allow for multiple design options that can quickly provide calculations for changes in materials, orientation, window sizing and more.

The synergy of LEED, the design & engineering team, the technology used all cost money, but we all benefit from that in the short run and in the long run.

I'll leave it to the attorneys, insurance companies and the USGBC to handle the details, but I think James, Christopher, Rich and Sarah can attest to my passion for the technology that ensures the accuracy of the energy savings and systems design. Personally, I'd never hire an architect or engineer who used 2D CAD on a LEED building. Talk about liability! 3% of the owner's money spent on fees that affect the 97% of the fabrication and construction of the building.

Chris, I love the ideas you've put forward and the responses you've received. If we are all serious and honest about why we're here and why we all do what we do, then all of these issues will be discussed, analyzed and the risks and rewards shall be distributed to those that aren't here for short term profit, but for the long term results of what LEED stands for.

~Gregory

chitra vishwanath - July 9, 2009 3:15 AM

This is very topical discussion and lot related to US. In India the developers are using LEED and IGBC tags to get their buildings certified. This is mostly a marketing tool or just a self promotion by certain companies especially when you go by the manner in which certain buildings have been given even platinum ratings.
The trend here is the developer builds a building may be LEED certified and then hands it over on lease to some other user who is may not bother about the maintenance of the systems or keeping to the options provided.Besides, the systems in place many a times are also not culturally relevant or viable.So, it is very important that we look at LEED certification a lot more culturally and avoid it becoming a marketing tool especially in developing countries where unfortunately market exists.
Gregory, how much ever Revitt and other tools can help I do not think they are ideal tools in the hands of many architects who again use these tools and LEED points as marketing options about themselves. We have been flooded with very bad and ordinary buildings who rate very highly and are absolutely ridiculous when compared with their embodied energy.
This is all angst after returning from a recently organised seminar of ASHRAE> ISHRAE

Christopher Hill - July 9, 2009 8:38 AM

Greg,

THanks for the "Rant" I would love to get that as a post of some sort at Musings. Also, I like that this post has lead to this discussion. It needs to take place.

Chris C, as to "sticks" I am not sure the USGBC really has any other ones, but the issue is not with them. They are a private rating organization that governments and private companies have chosen to use as a benchmark. It is this latter area that causes the issues with insurability and real sanctions/monetary consequences. Without this second layer, LEED would just be a label.

Tim Hughes - July 9, 2009 10:11 AM

Wow, what an ugly thicket.

On the one hand, the post-certification question is a running joke. How many of those parking space signs really stay up after that plaque gets awarded? How much impact on energy efficiency is there if there is no monitoring and follow-up, and if operations are not really part of the mix?

On the other hand, indefinite extensions of of certification problems ... that raises all kinds of alarm bells for limitations clocks starting to tick far after substantial completion. In some states, you can probably draft around that limitations problem, but who really wants to risk it.

This ultimately highlights the real structural problem to begin with. LEED works great as a voluntary feather in the cap program. As soon as you try to convert a voluntary out of state membership organization into a code enforcement related body, you have a potential nuclear melt-down. I suppose I should not complain given that I am a litigation attorney, but it is only a matter of time before these fault lines crack apart when localities are requiring specific certifications ....

Chris Cheatham - July 9, 2009 7:56 PM

27 posts. You all are incredible. I will have a follow up post tomorrow on the de-certification issue, so please check back and keep shooting away in the comments section.

@Will - I went through LEED v. 2.2 numerous times studying for the LEED AP exam and never, ever saw an ADR provision. I would like to think I, or one of my peers, would have noticed and discussed such a provision.

@Peggy - Thanks for the link and the comment. I agree with you. The USGBC had to do something to address actual energy performance of LEED certified buildings. To me, de-certification makes sense. I will elaborate tomorrow.

@Marc Kleinmann - With the creation of de-certification, USGBC is setting the table to link design, construction and operation together in one, all-encompasing rating system.

@green2green - Under the LEED 2009, if a project can't satisfy the MPR, then it won't be certified or it will be de-certified. Does that answer your question?

@Preston - Thanks for joining the conversation. I am not sure I see risk mitigation as the real issue with the MPRs. Instead, I think the USGBC is trying to avoid having its rating system get watered down. In short, I think all of the MPRs address short cuts that people had discovered in the LEED rating system.

@Stephen Del Percio - great article. I can't imagine the USGBC would allow third party reporting and I did not see such a mechanism in the MPR language. More on this tomorrow.

@Michael Kawecki - I am not sure if you were referring to my post or comments. My two main points from the post is that de-certification is now on the table and there are new risk and liability issues involved. Do you think either is not true?

@Gregory Arkin - Amen.

@chitra vishwanath - Thanks for the comment. We have officially gone international with our discussion! I would argue that LEED certification is most definitely a marketing tool in the United States. The USGBC is working to make sure LEED also remains a legitimate rating system.

@Christopher Hill - If the USGBC wants to ensure actual energy performance, it does need a "stick" to support compliance.

@Tim Hughes - The USGBC will be the first one to tell you that the LEED rating system was not created to be codified. Hopefully ASHRAE 189.1-P helps resolve the issue. In my mind, that code can't get passed fast enough. And don't call 27 comments an "ugly thicket"! :) This is blogging nirvana for me!

Miguel Quinones - July 10, 2009 9:00 AM

I'm also new to this arena since I just got involved with LEED and Energy codes recently, but this article touched a sensitive nerve, liability.

Let's start following the assumtions, number one being that LEED stands for a rating system that intends to improve current design and building practices. The problem arises when customers believe that the building is foolproof in its operation and maintenance (regardless if they used LEED for marketing). The question of how can you guarantee performance over time brings a couple of items that need to be address: Are the original assumptions used for the modelling really representative of the reality of the building, is the modeling software not the incorrect black box (the algorithims), does the contract include IPVMP and who's responsibility it is to correct the problems that arise.

Now lets bring de-certification into the picture, this is a tool to cover USGBC from IPVMP bases in the future.USGBC shouldn't have to worry about that if the contracts used for the building are structured as performance contracts and then allow the building inspectors to verify initial compliance, and subsequent performance compliance.

Ultimately the level of liabilities can be control and the focus of litigation is put toward making the contract a recipe for continued success.

Gary Shlifer LEED AP - July 10, 2009 4:39 PM

Forgive me, but isn't this shooting ourselves in the foot?
I do not feel the MPRs or Energy/Water consumption reporting is counter the fundamental intensions of the USGBC? Looking through the 'mandate' lens, the points brought out may ring only slightly.

If due-diligence and best intension are put forth to provide energy/water data are accomplished then that's the intension. Not to hold the proverbial gun to head of the owner. The whole idea is transformation towards the triple-bottom-line, not to add another 'must do' list.

De-certification? NFW folks! Has this ever occured, even come close? Once a building is certified, it's certified. Unless there is some gross misconduct evident, I don't ever see this happening. If an owner or management does not put forth data, that's their bad. For their project and the movement. The notion is to push the market in that direction, not to hold it hostage.

What about EAc3: Enhanced Commissioning? What if the CxA comes back for additional commissioning in 11 months instead of 10, or doesn't come at all? Is that point lost? And what if that point was needed to hold a certification level or certification itself? Does the project move from Gold to Silver or get de-certified? I think not. Nor should it. As some unforeseen circumstance could've taken place.

If an owner or management team pursue a point and intensionally try to 'work the system' is what's on the line here. And it is up to the LEED APs and quasi-enforcers of LEED to call them on it. And for GBCI and the Certification Bodies to insure, to the best of their ability, that the measures are in place.

This is across the board, not just for MPRs, not for reporting of energy/water consumption, for every prereq and credit.

My 2¢

Jolyn Crawford - July 10, 2009 7:35 PM

From a legal point, this is certainly a can of worms. But from a QA point of view, if buildings are not performing as expected, the real issue is, why and what can be done to bridge the gaps...Misrepresentation is a huge issue in marketing and financing these projects and who should pay the consequences if performance falls short? In the end, we all will, if the screws are not tightened. Mother earth already has, and isn't this why were in this movement to begin with or are you just looking for another marketing ploy? Forget about certification, what about integrity? If we don't clean up our act, trust me, big brother might make us...i.e. EPA?

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