Green essentials

Now more than ever, the country (and
the world) is looking at ways to reduce
the use of scarce natural resources.

One way many companies are doing this is
by building green.

Green buildings offer companies the opportunity to conserve resources and improve air
and water quality. They also offer the company economic benefits, something that is very
important in these uncertain times.

“Green buildings reduce or eliminate negative environmental impacts, lower operating
costs, enhance building marketability,
increase worker productivity, and promote
occupant health,” says Matt Jacob, Esq., an
attorney at Katz Barron Squitero Faust.

Smart Business spoke with Jacob about
green building, the legal implications of it and
why it’s so important in today’s society.

What green building standards exist?

The foremost green development rating
system was created by the United States
Green Building Council and is known as the
Leadership in Energy and Environmental
Design (LEED) program. The LEED rating
system is based upon the type of product
being developed and the number of ‘points’
that the project obtains. The points are based
on achieving certain criteria in the following
categories: sustainable sites, water efficiency,
energy and atmosphere, materials and
resources, indoor environmental quality, and
innovation and design.

The Florida Green Building Coalition
(FGBC) has its own standards that take into
account Florida’s climate and land characteristics, including the green home standard, the
green development standard, the green high-rise standard, the green local government
standard for green cities and counties, and
the green commercial buildings standard.

What else is involved with green building?

Certain local governments in Florida,
including Sarasota, Gainesville, Miami and
Miami-Dade County, have mandated that
government-funded projects be LEED certified and have developed incentive programs
to support private green development in their
jurisdictions, including priority permitting,
expedited review and reduced permit fees.
Also, recent state legislation requires all new or renovated state and local government
buildings to be constructed to meet a green
rating system. Further, the state building
code is incorporating energy performance
requirements.

What are the legal implications?

Green building development presents significant legal risks, since it is a relatively new
industry and there is little legal precedent. All
participants are vulnerable, including developers and landlords, who market buildings to
prospective buyers and tenants as achieving
green certification; architects and engineers,
who formulate plans and specifications to
satisfy green certification requirements; contractors and subcontractors, who build in
accordance with plans and specifications
containing green concepts; green consultants, who assist in the certification process;
management companies, who maintain and
operate green buildings; and material suppliers and vendors, who market and sell green
products. Litigation is more likely due to the
lack of appropriate qualifications and experience of many designers, contractors and sub-contractors and the use of new and untested
products, materials and processes.

Claims have been filed, and will continue to
be filed, as a result of buildings failing to achieve certification, especially with more
state and local governments moving toward
requiring green compliance. For example, in
Shaw Development v. Southern Builders, an
owner claimed that it lost tax credits under a
Maryland green building program since the
contractor failed to construct the building in
conformance with the LEED rating system.

Such claims may also include improper
design and construction delays, as well as
claims based on green products failing, such
as mold claims based on water infiltration
from green roofs and water retention as a
result of using cork flooring.

Also, claims of negligent or fraudulent misrepresentation, deceptive trade practices,
breach of warranties and other claims may
arise as a result of unmet promises and
expectations, as owners, builders and sales
representatives aggressively market green
buildings and products to prospective customers to obtain a competitive edge, especially if certification, energy performance
and/or cost savings is guaranteed. This is
often referred to as ‘greenwashing.’

For example, a tenant or buyer who has
been persuaded to pay more for a green
building because of what he or she expects to
save on operating costs may file a claim
based upon unmet expectations. However,
unless a building’s performance has been
measured over a period of several years after
it has been occupied, such savings are only
theoretical. According to a March 2008 study
by the U.S. Green Building Council, of the
energy use of 121 LEED-certified buildings
nationwide, 25 percent performed significantly worse than design projections.

What does a company need to consider
before it starts a green building project?

Before undertaking a green project, it is
important to know and understand the green
certification requirements, the procedures to
attain green certification, and the requirements or incentives provided by a particular
state or municipality. Also, it is crucial for
green building participants to define their
scope of services, with clear and unambiguous language, in contractual documents and
marketing material, such that they have adequately limited their legal exposure.

MATT JACOB, Esq., is an attorney at Katz Barron Squitero Faust. Reach him at (305) 856-2444 or [email protected].