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BD+C Green Building White Paper Acknowledges Potential Green Liability Issues

I’m planning a more detailed post about Building Design + Construction‘s recently released 2006 White Paper on Sustainability (this year’s is titled Green Building and the Bottom Line), but I wanted to briefly point out that item number ten (of ten!) in the editors’ Executive Summary is a direct acknowledgement of the legal issues that LEED, BIM, and other green building technologies are starting to implicate. The editors also recognize that, unfortunately, very little scholarly attention has been given to this potentially enormous area of liability.

10. The legal profession needs to examine potential liability issues resulting from developers and owners failing to build to green standards.

Will the time come when green building certification will be seen as a minimum standard?
This is a question legal scholars must began to take seriously.

On page 61 of the White Paper,

Will “green-certified” someday be viewed as a minimum standard for new construction, much as “building to code” is the baseline today? As Thomas Biascquino, president of the National Association of Industrial & Office Properties, has asked, “Is there going to be a question at some point whether you built to the highest standards?”

Put another way: If developers, owners, and Building Teams fail to build to green standards, could they be held liable in some future legal action?

To the best of our knowledge, there have been no lawsuits or cases in which these questions were a cause of action. But the question has been raised by a number of experts interviewed for this White Paper. We believe the issue deserves consideration by legal scholars, and we suggest that it be studied in the form of a symposium or scholarly research.

Again, this is just the beginning. These issues will be of critical import for design professionals, developers, and owners to reflect upon in greater depth in 2007. Accordingly, I believe that we will see a dramatic increase in the number of articles and papers that are published with respect to these liability issues in the next year.

What is this White Paper telling us about LEED?

As I’ve started to go through the White Paper in greater detail, one of the first things that’s jumped out at me has been a series of statistics in Chapter 2: Where the AEC Industry Stands on Sustainability. (10,000 of BD+C’s 75,150 recipients were drawn at random to receive a green building survey and 872 completed it).

The first question that caught my eye was what owners and developers viewed as barriers to incorporating green elements into their projects. Maybe due to my recent focus on LEED, I assumed that the dreaded USGBC red tape would rank at or near the top of owner gripes in response to this question. As usual, I was wrong.

57% of owner and developer respondents said that green building is hard to justify because of greater first costs, even accounting for long-term savings. 56% blamed perceived additional first costs and 52% a “lack of will by the market” to pay the green building premium.

However, owners still complained about the red tape- 36% said it was their biggest obstacle. USGBC should note that this that this figure increased from the same question as posed to the same sample set of respondents in both 2004 and 2003, from 23% and 16%, respectively, despite modifications in LEED-NC Version 2.2 that purported to streamline the certification process.

Maybe the (very preliminary) lesson here is that owners would be willing to put up with LEED headaches if they were convinced that they’d see a better return from green buildings. On page 8 of the White Paper, Daniel L. Pohnert of the engineering consulting firm Jones Edmunds observes that “[m]easurable, independent evaluation of the value of green buildings is missing. The bottom line is the issue.”

The 2006 White Paper is devoted to the “shift in theme for the green building movement, from environmental cause to financial opportunity.” Perhaps in the race to create LEED Version 3.0, USGBC has lost sight of the needs of the industry. For example, 75% of White Paper survey respondents want to see independent documentation of a green building’s asset value versus that of a conventional building (up from 62% in 2004 and 59% in 2003), while 66% hope to see more green project case studies. In 2007, then, maybe it makes sense for USGBC to seriously address these concerns rather than simply forging ahead with a total restructuring of the LEED system, particularly if LEED itself is not green building’s primary obstacle.

3 Responses to BD+C Green Building White Paper Acknowledges Potential Green Liability Issues

  1. Planet Relations November 30, 2006 at 5:27 am #

    Very interested in the liability issues, but from the completely opposite perspective. I was talking with an attorney at GreenBuild and he said that there’s serious concern in the surety bond market about the long-term performance of green buildings and materials and that fewer and fewer companies are willing to provide surety bonds for projects pursuing LEED certification. Their question is “Will the building perform over the long term or will the ‘cool, hip green building elements’ fail sooner than expected resulting in consequences for surety. Under the Miller Act, payment and performance bonds are required for general contractors on all U.S. federal government construction projects where the contract price exceeds $100,000.00.

    Don’t know enough about the topic other than to raise it. Thoughts?

  2. Stephen December 7, 2006 at 6:10 pm #

    Thanks for stopping by and commenting. Sorry not to respond to you sooner, but I started looking into the surety issues. I haven’t found anything of substance yet but I’m hoping to sink more time into this and follow up with a detailed post. Regardless, there are clearly a lot of liability issues around LEED and other similar systems that still need to be worked out. The fact that the surety industry is aware of them, and is frightened by them to some degree, should be disconcerting to USGBC.


  1. Mutual Funds and Market Research - October 26, 2007

    Mutual Funds and Market Research…

    I couldn’t understand some parts of this article, but it sounds interesting…

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