How to Make a Green Building Attorney Queasy
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Energy Ace Inc., an Atlanta-based sustainability consulting firm, has publicly announced it will guarantee LEED certification for its projects. Of course, there are limitations to the guarantee:
"Energy Ace is guaranteeing LEED™ certification on projects where the firm is able to oversee LEED™ administration, Fundamental Commissioning and Energy Modeling, and where the project team is committed to LEED success."
Let's go through those conditions one at a time:
1. "The firm is able to ovesee LEED administration"
Since Energy Ace is a LEED consulting firm, I assume "LEED administration" means overseeing LEED certification paperwork. Energy Ace doesn't appear to serve any design or construction role. Remember, important decisions are made at both the design and construction stages that impact achieving LEED certification. How can Energy Ace be comfortable that LEED administration is enough?
2. "The firm is able to ... oversee Fundamental Commissioning and Energy Modeling."
This one makes sense. Commissioning and modeling are key components of buildings that eventually achieve LEED certification.
3. "The project team is committed to LEED success."
As a construction attorney, this sentence makes my stomach roll. Please, seriously, someone explain this to me. How do you define "committed to LEED success"?
Despite all of this, Energy Ace knows what they are doing. Check back on Friday and I will explain why.
Links:
Energy Ace Inc. to Offer the Industry’s First Guarantee for LEED
Photo: misterbisson
These guys sure have started a firestorm. However I will give my take at Musings shortly as well. Thanks for starting the debate.
I have two thoughts. First, when I first clicked through to the article, I thought it was something an Earth Times writer had written (i.e., with some outside objectivity). But I became suspicious when it started sounding like a press release, and sure enough, it is. So Energy Ace is just puffing here.
Second, therefore, what will be really important is the terms of the contract, not just some press release. I would expect that Energy Ace would have a lot more detail, and teeth, in the contract not so much stating that the owner/builder "must be committed," but must be willing to do x, y, and z, or let Energy Ace do those things (at the owner's expense).
Have you seen the contract?
I know Wayne Robertson and understand that they first enter into a standard services contract that includes one or more "charettes" to map out the sustainability features of the project. If, at that point, Energy Ace determines that the design and commitment of the project team is sufficient, they will amend the contract to include the guarantee language. I haven't seen the language (yet), but if properly worded AND if they pay attention to the process for making their threshold decision about whether the design and commitment warrant a guarantee, it need not necessarily increase their actual risk by much.
But then again, that may be two "ifs" too many.
If you put enough caveats in the guaranty, it may be enough wiggle room to get the market benefit of the guaranty and still not get hooked in court.
I don't think an attorney wrote that guarantee Chris.
Have they shared this with the underwriter of their professional liability insurance (Malpractice) ?
Leaving aside the additional elaboration in the comments before me, this is an illusory guarantee. If LEED certification does not materialize (and assuming there is no further contractual language detailing the parties' obligations), then obviously the project team wasn't committed to LEED success. Guarantee averted.
It sounds, though, like this statement is a rather simplified version of a more extensive vetting process.
Skip - great point. However, warranties and guarantees are a standard exclusion in most professional liability policies. Some carriers are endorsing those exclusions to amend guarantees made in the scope of acting as a LEED Accredited Professional, but guaranteeing certification will send them running for the hills! What if certification is not achieved and the developer is punished by losing their occupancy and use permit (read - Gaithersburg, MD). Are they liable?
@Christohper G Hill - since when is 8 comments a firestorm? :)
@Andrew Falk - I have not seen the contract. But I agree, the contract terms are key.
@Robert Newcomer - Thanks for the important information. If you get a chance to talk to Mr. Robertson, I would welcome a guest post from either you or him.
@Tim Hughes - I agree. Look forward to seeing you tomorrow night.
@Matt Evans - I don't think so either. I would be very interested to read the contract language.
@Skip Rawstron - Good question!
@Leigh Monette - Haha! You just blew my mind with the "illusory agreement" argument. Nice work.
@Mark Rabkin - Thanks as always for your comments. Check back on Friday as I think you will see the brilliance of the Energy Ace LEED guarantee.