“Green” construction is now a mainstream trend, and with it comes the potential for legal disputes over unmet expectations and other risks. For example, if a green building certification isn’t achieved, the owner could face financial losses, including the loss of tenants or government incentives. It’s important for owners, designers, and contractors to be aware of these potential risks before starting a green project. If someone doesn’t meet the goals in a contract, they might have to pay extra money for any additional problems that come up because of it. In the past, people have been responsible for paying for any problems that everyone could have expected when they signed the contract. But when it comes to green building projects, things are still new and no one is really sure how much extra money might have to be paid if something goes wrong. There are a lot of confusing rules and regulations, and it’s hard to tell if insurance will cover any problems. So, if you’re planning a green building project, it’s important to make sure that the contract says exactly how much money can be paid if something goes wrong. A contractor was hired to build a green condominium project, but failed to deliver the building on time and to the green building standards. As a result, the owner lost over $600,000 in tax credits. The owner sued the contractor for negligence and breach of contract. The lawsuit settled, but it showed that the contract didn’t clearly state the contractor’s responsibilities for achieving green building certification. In the future, owners should make sure contracts clearly assign responsibilities for getting green building certification, and consider adjusting payment terms to coincide with certification. It’s also important for everyone involved in a green building project to understand the risks and work together to be successful. Architects need to be careful when guaranteeing LEED certification for green building projects. If they promise it and it doesn’t happen, they might not be covered by their insurance. The American Institute of Architects has some documents that can help with the LEED certification process, but architects shouldn’t rely only on those. It’s important for architects to set reasonable contract requirements and manage their client’s expectations when it comes to green design. Architects need to be careful about taking on additional services like LEED certification and commissioning, as they may not be covered by their insurance. They should also consider adding a clause to limit their liability for any mistakes. A new agreement from the AIA also requires architects to consider environmentally friendly design, which could come with added risks. Architects should make sure to document their discussions with the owner about green design, even if the owner decides not to go ahead with it. LEED certification for green buildings is changing the standard of care for architects. The AIA now promotes sustainable design, which means architects could be held responsible for not meeting these standards. The LEED certification process requires architects to sign off on the accuracy of green building components, which could create potential liability issues. To protect themselves, architects should clarify in writing that their signature on a LEED submittal template is only for meeting LEED requirements and does not guarantee the performance of the building. Design changes during green building construction can have significant effects on the project’s energy performance and LEED certification. For example, changing a window type may affect the amount of light coming into the building and its energy needs, potentially resulting in a loss of LEED points. If the architect doesn’t recognize these interrelated effects, the certification could be lost, leading to potential claims from involved parties. Contractors should also be aware of these risks, as well as potential liability for damages, when working on green projects. When a construction project specifies exactly what materials and methods to use, the contractor is not responsible if those instructions lead to problems. But if the specifications only set a goal without giving specific directions, the contractor is responsible for meeting that goal. This can be tricky on green projects, where using the wrong materials can affect the project’s environmental rating. It’s important for green construction contracts to clearly state if the contractor is responsible for following design plans or achieving certain performance goals, like LEED certification. Contractors should be careful about guaranteeing LEED certification, since they often don’t have control over the design aspects that affect it. If an owner wants the contractor to share the risk, the contract should include specific terms for that. Green building projects can sometimes take longer due to the high demand and low supply of certain materials. For example, some green materials need extra time to cure, like low-VOC paints. There are also specific processes and requirements, like flushing out the building before it can be used, that can add time to the construction. Contractors need to be aware of these factors and plan for them to avoid delays.
In some places, there may be a requirement to get a performance bond to make sure the building meets green standards. This means that if the building isn’t certified as green within a certain time, the bond money could be lost. It’s important for everyone involved in the project to know who is responsible for getting the bond before they start building. While this is currently only a requirement in the District of Columbia, it’s something to keep in mind for other areas as well. Standard industry contracts may not account for the specific requirements and risks of green building projects. This could lead to disputes and problems for everyone involved, such as owners, architects, and contractors. For example, the definition of “work” in contracts may not include the necessary documentation for LEED credits, and the definition of “substantial completion” may not consider the special requirements of green projects. This could result in lost credits and unexpected delays. It’s important for green building participants to be aware of these potential issues and address them in their contracts. In a green building project, it’s important to have clear contract language and to make sure everyone involved understands the green requirements. Payments should be tied to getting green certification, and contracts should include this requirement for subcontractors too. Also, be careful in choosing products for the project and make sure they meet green standards. It’s important to communicate and keep the owner informed of any issues with product choices. When it comes to building green projects, everyone involved should be careful not to make promises about how well the building will perform. If they do, they could be at risk of legal claims. Also, they need to stay updated on the green building rules and laws set by the government, which can affect how the project is done. As green building projects become more popular, so do the rules and standards for them. But sometimes these rules can conflict with each other, causing legal problems. For example, in Albuquerque, a court stopped a new law about energy standards for HVAC equipment because it clashed with federal law. So, it’s important for people involved in green building to keep an eye on the rules and fix any conflicts before they cause trouble. The government is putting lots of money into green building, so there might be even more legal issues in the future. When working on a green building project, it’s important for everyone involved to understand the goals and limitations. Clear contracts and good communication can help avoid legal issues. As green building becomes more common, the risks involved will be better understood by construction professionals. An example of a legal case related to green building is Southern Builders v. Shaw Development, where there were disputes about damages and tax credits. This is a collection of sources and quotes about the legal risks of green building projects. It talks about potential liabilities and lawsuits that can come up when building green. It also mentions some specific laws and cases related to green construction. Overall, it shows that there are legal challenges to consider when working on green projects. And it mentions that some people are concerned that claims of green building benefits may be oversold. The text mentions various legal cases, presentations, and individuals who are experts in the field of construction law and green building. It also includes information about the law firms and their attorneys.
Source: https://www.floridabar.org/the-florida-bar-journal/hidden-legal-risks-of-green-building/
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