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The green building industry is arguably more popular than ever. The number of certified green buildings grows every day across all sectors of the building industry. Unfortunately, the contracts for sustainable projects are sometimes behind the times. Standard construction contracts are often not tailored to address the numerous issues and nuances that may come up on sustainable projects. This potentially puts all contracting parties at greater risk of uncertainty if disputes arise on the job site. Preparation on the front end of a green building is usually the best way to alleviate problems later on, and it starts with the contract. This is true whether the project is one for new construction or for renovations or retro-fitting.

First, the contract should be as clear and specific as possible about what the green goal is. Simply using terms like “green building,” “sustainable building” or “high-performing building” are not enough, because it is unclear what the precise goal is. For example, the goal may be to reduce electricity costs, and the owner may have a specific energy saving cost or usage goal in mind. That should be identified in the contract. In addition, an owner may require a third-party green rating certification. That could mean LEED certification, but LEED alone has multiple levels. Or, it could mean Green Globes, the WELL Building Standard, or a handful of other third-party rating agencies. If so, then specificity is needed. If the goal is not achieved, there will be no confusion as to what the goal was. Related to this issue is which party will bear the costs for certification fees, inspections and tests that may be necessary to the green certification. Again, this is best addressed in the contract.

Second, the contract should reflect who is responsible for achieving the project’s green goals. That might be a design professional like the architect or an engineer. Or it may be general contractor, sub-contractors, suppliers, a sustainability coordinator or a combination of construction professionals. Each segment of the construction project should be aware of what responsibilities it is undertaking in the green building process. The person or entity that is responsible also may want to get paid more for taking on the added risk.

Making Guarantees

All contracting parties should be aware of what guarantees they are making or receiving in terms of sustainable performance or certification. For instance, if a contract requires LEED Gold certification, but the final product does not achieve that, the contract should be clear about what the repercussions are. Similarly, the contract can address what happens when a component such as a solar energy system or a HVAC unit does not achieve the level of performance a contractor or otherwise represented.

An alternative to a guaranty is a performance bonus or bonuses based on the certification or performance levels achieved. In other words, a contract will describe a base fee for services on the project and then allow for additional compensation depending on the level of certification the building gets or based on the level of performance of the building after occupancy. This is helpful because it can be difficult to guaranty these levels on certain projects. Green building warranties may also be provided, but carry greater obligation or risk to the warranty provider.

The parties can also tie final completion benchmarks to the achievement of the sustainable goal, depending on the type of project. Money may be held back on a project pending the receipt of the green rating. However, when a rating will be bestowed by the rating agency is not always certain, and cannot be entirely controlled by the contracting parties.

A contract can also address the types of damages that may be obtained if the project fails to achieve the agreed-upon sustainability goals. For example, if the purpose of building green was to achieve certain tax credits, and those credits

are not achieved, they may become the measure of damages. Damages may be more difficult to ascertain in other performance metrics. Contracting parties may also want to consider capping those damages, or setting forth a method to measure them.

When it comes to green building contracts, there is no one size that fits all. Goals, methods, specifications and components can greatly vary. However, all parties involved in a sustainable building project have added incentive to consider and address the unique issues that may appear. Reliance on the standard building contract may not suffice. If the issues are not properly addressed upfront, the chances for dispute and litigation will significantly increase. As the old saying goes, an ounce of prevention is worth a pound of cure.

Mark J. Stempler is a Florida shareholder with the law firm Becker & Poliakoff. He is board certified in construction law, is certified as a LEED Green Associate and focuses his practice in the areas of construction litigation, government law, and civil litigation. He may be reached at mstempler@bplegal.com.

In addition to the proposed legislation to substantially change Chapter 558, link here, the Legislature is considering other legislation that will materially impact owners and taxpayers.  HB501 proposes to reduce the time owners have to pursue construction defect claims from 10 after completion to 7 years after completion.  Specifically, the proposed legislation reduces the time frame within which a claim can be brought for latent defects (a defect you did not know about or had no reason to know about) in the design, planning or construction of improvements to real property from the current 10 years to 7 years.  This reduction of time to pursue claims apply to claims where the building code was violated.  Why should Florida provide less protection to owners when historically, and now again, the biggest building booms have been occurring in Florida.  Even the AIA Form Agreements, not always owner friendly, provide for a 10 year statute of repose. More time should be provided because significant defects cannot often be discovered earlier.

In the Firm’s practice some of the most frequent defects which evidence themselves more than 7 years after completion:

  • the failure to properly treat post tension cables in high rise projects. The ends are not capped or treated with grout and waterproofing;
  • improper concrete cover over reinforcing steel on balconies;
  • stucco delamination;
  • bursting condenser sensor water pipes behind walls that have seams or improper fitting that fail;
  • roof membranes improperly installed and leaking into structural deck and trusses causing structural damage;
  • roof tiles improperly fastened and not compliant with wind codes;
  • a roof that appears new yet it is discovered it covers and old existing roof and has not adhered;
  • window frames with a useful life in excess of 20 years fail in year 10 by pitting and blistering;
  • sink hole issues that all should be familiar with in Florida;
  • poorly compacted soil;
  • concrete that is of less than the required compressive strength starts to crumble impacting structural members;
  • columns and beams with insufficient steel that is not apparent until a failure occurs ;

The attempt to reduce the time frame for the Statute of Repose for latent defects affects owners in existing buildings as the clock is running on those buildings already.  It is important that every condominium owner realize that this bill is a further stripping away of the rights of condominium unit owners and deserves to be soundly defeated.  Repair of significant defects will be solely on the owners rather than the parties that created the defective situation. However, not only are condominiums impacted but public construction such as schools, hospitals, roadways and public facilities such as stadiums. If deficiencies exist where the statute has expired, the public will pay for the corrective work as opposed to those that created the condition through faulty workmanship and design. The burden to pay should be borne by those accountable for the issue.

Why in this climate is legislation helping shoddy construction being pushed?  The only beneficiaries are construction professionals that perform lousy work that can avoid liability for their poor performance by waiting out the clock. The bottom line is that it is the consumer and taxpayer that are impacted by this legislation designed to help contractors, design professionals, subcontractors and suppliers.

Set of bio, eco, organic sticker elementsThis post originally appeared in “The Green Building Law Blog

Being green is not always straightforward.  There are many products on the market, related and non-related to building, that make claims about their environmental benefits and impacts.  There are many service providers that make similar claims.  But not all products and services live up to their billing.  Companies marketing themselves or their products as environmentally friendly will have
to better qualify those statements, in light of Federal Trade Commission’s Green Guides.

The Green Guides have been around since 1992.  The latest version was updated in 2012.  They “outline general principles that apply to all environmental marketing claims and provide guidance regarding many specific environmental benefit claims.”  The purpose is to cut down on deceptive practices regarding green marketing.  The Green Guides are not law and are not independently enforceable.  But, the FTC can take action if someone or some entity makes an environmental claim inconsistent with the guidelines.

When you come across a product with a green certification seal, for example, from an independent third party, that has to meet the endorsement requirements in the Green Guidelines.  When you come across materials from a provider of a product, make sure the product is certified.  For instance, if you get a manufacturer’s or vendor’s sales brochure for overhead lighting and it has a seal that says “EcoFriendly Building Association” find out what is being endorsed.  If the lighting manufacturer or vendor is just a member of that association, that does not mean that the association evaluated that product.  It may not have any environmental benefits.  Consumers should also make sure that if a product is endorsed by a independent third party, that the certification is legitimate.

The Green Guides has sections focusing on claims such as carbon offsets, non-toxic products, renewable energy, ozone-friendly, recyclable, and renewable materials.  You can see the latest Green Guides by clicking here.

by Mark J. Stempler

The newest version of the popular LEED Green Rating System is affirmed.  The U.S. Green Building Council (USGBC) announcced that its membership voted to adopt LEED v4 by an overwhelming 86%.  This version of LEED has been in the works for a few years.  Ultimatly, it withstood controversy and was refined through several public comment periods.

Changes in LEED v4 from the current version (adopted in 2009) include:
*  A new credit category – Location and Transportation;
*  A new credit in the Sustainable Sites category – Rainwater Management; and
*  New prerequisites in the Water Efficiency category; and
*  New requirements for the use of LEED AP’s for specific credits.

There are several other additions and changes in LEED v4 which will affect numerous types of buildings. For the complete list, check out http://new.usgbc.org/v4.

The full LEED v4 program, along with reference guides, will be unveiled at this year’s Greenbuild conference in Philadelphia in November.  Currently, there are more than 100 projects pursuing certification through the LEED v4 beta program.

 

The U.S. Green Building Council’s long awaited updates to the LEED Rating System are almost complete. LEED v4 has been in the works for more than a year. The likely final public comment period for the new rating system ends on March 31st, and voting on the changes is scheduled to begin June 1st.

There are some significant changes in LEED v4. It will include a new credit category, Location and Transportation.   As the name suggests it focuses in part on location of buildings and connectivity to them. Some of the credits in this category, such as bicycle storage, reduced parking capacity and low-emitting vehicles are already part of the existing Sustainable Sites category, so they are just being moved. Speaking of which, a new credit for rainwater management has been added to the Sustainable Sites category in LEED V4, which will be an opportunity to earn points for capturing, treating and controlling on-site runoff.

There are some significant changes in the Water Efficiency category. There will be three prerequisites: Outdoor Water Use Reduction (applicable to projects with exterior vegetated areas); Indoor Water Use Reduction (like the former "Water Use Reduction" prerequisite, it requires 20% water use reduction, and will also require a WaterSense label for certain fixtures and fittings); and Building Level Water Metering (applicable to all projects, it calls for permanent water meters to measure usage, and the data must be shared with the USGBC for 5 years). There are also new credits for Cooling Tower Use and Water Metering.

Continue Reading New Version of LEED Rating System May Be Coming Soon

Do you have a long-term maintenance plan for your building?  If not, you should consider formulating one.  No matter how old your building is, there is preventative maintenance that should be performed to make sure your building’s components do not prematurely deteriorate, or even catastrophically fail.  Such catastrophic failures prompted Miami-Dade County to implement a recertification program in the 1970s for buildings that reach 40 years old.  Miami-Dade County’s program requires owners to have their buildings inspected and necessary repairs performed in a very short period of time after the County issues a notice to the owner notifying the owner that his/her building must be recertified.  Broward County recently implemented a similar program, and other counties might follow their lead.  However, you should not wait until it is required by a mandatory recertification program to perform preventative maintenance on your building.

If you wait until the last minute and are subject to a recertification program like the ones in Miami-Dade County and Broward County, you might face fines if you are not able to complete the necessary repairs within the time frames set by the program.  Even if you are not in a county with a formal recertification program, performing long-term preventative maintenance might save you money in the long run and will probably make devastating failures less likely.  If you wait too long to implement a maintenance program, you might discover problems in your building at such a late stage that you will have no choice but to perform substantial and expensive repairs immediately, thereby depriving yourself of the opportunity to properly budget for the expenditure or shop around for the best deal on the repairs.  While implementing a long-term maintenance program might not be your highest priority concern, you should not wait until it is too late to give the longevity of your building the attention it deserves.  Some architects and engineers specialize in evaluating the maintenance needs of buildings and developing long-term maintenance plans, including preparing for and complying with recertification programs like the ones in Miami-Dade County and Broward County.  If you need assistance in developing a long-term maintenance plan, assistance is available, you simply need to contact a qualified architect or engineer to evaluate your building’s particular needs to start the process.

Disputes with a building inspector over interpretations of the Building Code are an unfortunately common occurrence in construction. Did you know you don’t need to haggle endlessly with an inspector to get him or her to see your point? The Florida Building Commission, the entity responsible for overseeing the statewide building code, has user-friendly procedures called declaratory statements and binding interpretations. Essentially you submit a code interpretation question to them online at www.floridabuilding.org and they will consider it and issue a written response at their next duly noticed Commission meeting.

Don’t have time in which to submit a petition for a declaratory statement or binding interpretation? Their website maintains a data base of previously issued declaratory statements and binding interpretations. Browse through them and see if somebody had previously asked the same question you have.

These procedures offer opportunities to resolve interpretation disputes with inspectors. However, how to delicately address this with the inspector in a way that won’t make them vindictive is something you’ll just have to consider on your own. . . .