Lest anyone suggest that these not practical concerns for every green construction project, I’ve compiled a series of images below of project sites here in Manhattan at various stages of completion over the course of the past six months. From left to right, I think the images speak for themselves; the first project, though pre-certified at the time under the LEED for Core and Shell system, had not formally received a LEED Gold rating from USGBC as the sidewalk bridging suggested. The second, which is currently plastered over construction fencing that covers future ground floor retail space at what will be a LEED Gold retrofit in Midtown, simply states that the space is “green” without any detail regarding exactly what “green” means. Finally, I think the third photograph demonstrates a partial best practice for green building owners: be straightforward about the project and what is attempting to accomplish – “pursuing LEED Gold certification”- without making exaggerated claims or guarantees about final certification level or how the building will perform down the line.

As Kim Ford of CresaPartners notes in the CoStar piece, “[o]ften, the people marketing LEED-registered buildings like to use the word LEED, but they’re very naive about the terminology.” Anderson also makes the excellent point that “[w]hen it’s a statement of environmental good, there’s a presumption that it might not need to be examined carefully.” Beyond terminology, Mr. Burr points out that, according to a recent study by Green World Media, between 25 and 30 percent of LEED-registered projects drop out of the process and never proceed to final certification, in part due to the expense, but also the average two-year lag between registration and formal certification. For the owner that sticks “LEED Gold Certified” on project marketing materials, in quarterly reports or other disclosures to the SEC, or in a lease term sheet with a tenant who has a corporate mandate to occupy office space in LEED Gold buildings only, the potential liability for a LEED-registered project that drops out of USGBC’s queue could be enormous.

One of the major reasons why I launched this site was to foster a “more robust,” as I called it, discussion of the liability aspects of building green amongst industry stakeholders and, again, I’m happy to see CoStar presenting some of these issues so early on in 2009. Nevertheless, I do think these issues are real and serious for every owner to consider, particularly in the type of down economy where litigation is always more pervasive.

• Increase in Dubious Claims of LEED Certification Seen in Marketplace (CoStar)

At least in the commercial context, a jumping off point for plaintiffs who assert these types of claims could be the studies- many of which are promulgated by the USGBC and its constituents- that tout the higher leasing and purchasing figures for LEED-certified buildings. I have started to see the beginning of this inquiry in my own practice and recently pointed a client to the CoStar study in order to assist it in attempting to translate a lost LEED rating into a quantifiable dollar figure (litigation has not resulted – yet – in this particular matter).

It is obviously a bit different in the residential context and I do not believe there is a study comparable to CoStar’s out there just yet. However, I do agree with Mr. Anderson’s conclusions in the PB piece that the most critical threshold issue for green construction in either sector is contract language that clearly defines the parameters of a project’s anticipated green features. While litigation is always a possibility no matter the type of project, matching the parties’ expectations through tight contract language that clearly defines the term “green,” among other definitions, can help reduce the risk that sustainable design will increase the potential for a lawsuit or claim on a green building project.

• Green Lawsuits, What It Could Mean for Home Builders (PL)
• Critique of CoStar Study (gbNYC)