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The Top 5 Legal Issues in Green Real Estate: 2010

Top Green Real Estate Legal Issues - 2010

In what’s becoming an annual year-end tradition here at GRELJ, we take a look back at the five most important legal issues (plus a special bonus issue!) that we discussed during 2010 before moving forward into what promises to be just as wild a ride for green design, construction, and real estate legal issues in 2011.

  • USGBC found itself squarely in the middle of the year’s biggest story: Henry Gifford’s $100M class action lawsuit against it, which was filed in the Southern District of New York back in October. While it remains to be seen what – if anything – will come of Gifford’s action from a legal perspective, the filing of the suit itself set off shock waves throughout the green building community. Equally interesting were USGBC’s general silence about Gifford’s allegations and Gifford’s posture in ongoing settlement negotiations. Regardless of whether the suit slowly fades from the green building public’s eye or heats up once again, this will continue to be one of 2011′s most intriguing stories.
  • Green building litigation broke out at New York City’s Riverhouse condominiums. Filed back in May in New York County Supreme Court, Gidumal v. Site 16/17 Development LLC could mark the tip of an iceberg of claims that use the promise of a building’s or tenant space’s anticipated LEED certification or increased energy efficiency as an actionable sword to reform leases, escape purchase agreements, or recover money damages. At least one other similar suit has been filed against a green developer in Toronto, and other unreported cases also exist. Expect more discussion of this type of risk on the owner/sponsor/developer side of the green building equation in 2011.
  • Industry stakeholders continued to fight back against proposed increases in energy efficiency requirements at the state and local levels. Federal lawsuits in Albuquerque, New Mexico (AHRI) and Washington State (BIAW) moved forward against proposed building codes, alleging that the codes would mandate energy efficiency standards for certain types of HVAC and other products that exceed controlling federal requirements and were thus preempted as a matter of law.  As USGBC begins to commit to Standard 189P and the International Green Construction Code as a legislative tool in 2011, the potential will increase for similar suits elsewhere in the country.
  • The green building legal community was left to wait for another year for the anticipated boom in LEED-related litigation (i.e. “LEEDigation”). We wrote about this recently here at GRELJ: the fact that there was no reported litigation arising out of a project’s failure to earn LEED certification as anticipated in 2010 is extremely notable and could have significant policymaking repercussions in 2011.
  • Standard 189P was incorporated into the International Green Construction Code as an optional compliance path. I expect this to be on our list of 2011′s top green building legal issues as USGBC begins to push Standard 189P and the IGCC as a legislative tool for state and local governments while LEED itself returns to the role for which it was originally intended: a voluntary tool for the very top of the marketplace.

Bonus issue:

  • The legacy of USGBC’s decision to uphold the LEED Gold certification of Northland Pines High School remains unclear. Are USGBC and GBCI serious about penalizing LEED projects that fail to comply with LEED Version 3.0′s Minimum Program Requirements or other prerequisites? Is “decertification” a legitimate risk or a green building red herring? These questions are still unclear as 2010 draws to a close; perhaps 2011 will begin to shed some light on them.

My sincere thanks to everyone who has participated here at GRELJ in 2010 and best wishes to you for a healthy and happy 2011!

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    [...] When the clocked struck 12:01 on New Year’s, two important green regulations went into effect that may have a long term influence on green building and renewable energy.  If successful, either of these regulations would do more to change the green industry than any legal challenge to LEED’s legitimacy (see the continued coverage of the Gifford v. USGBC case here and here):  [...]

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