The Most Important Green Building Legal Story of the Year

[Today we are highlighting the what is, in my opinion, the most important green building legal story of 2009

With the launch of LEED v. 3.0, the United States Green Building Council (USGBC) announced it would revoke certification of projects that failed to meet minimum requirements.  The possibility of LEED de-certification creates new liability issues for all parties involved in any green building project and emphasizes the growing emphasis on building operations. 

This post resulted in a firestorm of comments (31) that are more interesting than the original post.  Thanks to everyone for contributing to the informative conversation.]

 

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. 

Every time 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)

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Comments (4) Read through and enter the discussion with the form at the end
Steve Teitelbaum - December 31, 2009 11:03 AM

I am curious why you recycled this series of postings and comments. It was all much ado about nothing. The USGBC mandate that gave rise to so much hysteria in the blogosphere was never anything more than a REPORTING requirement, it was never a PERFORMANCE requirement. As one of your earlier commenters noted, there was never even "an insinuation" by the USGBC that it was threatening decertification for failure to meet a performance standard. To the extent there was any misunderstanding on that point -- witness the hysteria in the blogosphere -- I recall that the USGBC issued a statement clarifying the situation.

Which is not to say that there aren't serious (non-legal) questions about LEED and building performance and whether LEED should focus more on that and less on design and construction. And there may yet be serious (legal) questions should decertification ever become an issue, particularly if municipalities and counties and States, and maybe one day the Federal government, require LEED or other green standards to be met in the building stock.

But getting back to the point of the most important "legal" green story of 2009, I suggest that the answer is "none." LEED remained a resolutely non-legal standard. The firestorm of "LEEDigation" so many have predicted for the past two years remains so far nonexistent. And that includes in Canada, which is ahead of the U.S. in going green, so the Canadian experience may be a leading indicator for us.

Green is, of course, broader than LEED, even if Americans tend to forget that. But even so, the lengthy Harvard Law School Environmental Law Clinic study of potential green litigation found no overlooked cases and nothing but the standard theories of liability -- tort, contract, and statutory -- telling us, with great self-importance, exactly what you and your fellow bloggers have been telling us for the past few years.

As the author of one of BOMA's green lease guide and a frequent lecturer on the subject, I know that green has been slow to seep into actual lease documents. Nor does green seem to have seeped into other contracts; architects, engineers and consultants have generally been far too smart to contractually promise any particular green outcome.

All in all therefore, from the "legal" point of view, when it comes to green 2009 reminds me of nothing so much as the old TV commercial, "where's the beef?" Too bad for us lawyers, probably good news for everyone else.

Christopher G. Hill - December 31, 2009 2:08 PM

I still think that this reporting requirement is important because once the information is out there, owners and regulatory bodies will do with the information what they will, and possibly create their own standards for performance knowing the information must be reported to maintain LEED certification.

I am not so much worried about the reporting itself and what third parties will do with the information.

Chris Cheatham - December 31, 2009 3:13 PM

Steve,

Thanks for your response. I will respond to each paragraph.

At the end of the year, publications (blogs, newspapers, magazines, etc.) often highlight the top stories of the year. I decided to do the same here at Green Building Law Update and highlight what I thought was the legal story of the year for the industry. The idea that projects can now be de-certified has far reaching implications going forward for the real estate industry. Leases will have to be amended. Regulations will have to be revised. Sureties, contractors and architects will have to consider the impact of de-certification.

I never stated that the de-certification was tied to a performance requirement. But the USGBC has, in fact, insinuated that decertification will eventually be tied to a performance standard. In fact, I have written about this previously:

"Mr. Horst, the LEED executive, said that LEED may eventually move toward the E.P.A.’s Energy Star model, which attests to energy efficiency only for the year the label was given, similar to restaurant ratings.

'Ultimately, where we want to be is, once you’re performing at a certain level, you continue to be recertified,' Mr. Horst said."

http://www.greenbuildinglawupdate.com/2009/09/articles/trends/the-future-of-leed-recertification/

I would be interested to see the USGBC statement clarifying the situation.

The point of this blog is to point out green building legal issues that will develop in the future. I remain convinced “LEEDigation” is out there and will continue to develop. In fact, I know it is out there and I will be writing about it in the first few weeks of the New Year. I am also a frequent green building law lecturer and audiences have been very receptive to my message that green building litigation will develop.

I am curious, do you think there will not be green building litigation from green building projects?


James Crawford - January 26, 2010 4:17 PM

No way will the USGBC get the U.S.Army to record energy usage, report it to the USGBC, and have a plan in place to improve energy savings if needed.

When preregistered LEED 2.2 projects end...LEED 3.0 ends for our military projects.

The USGBC 'shot themself's in the foot"

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