USGBC Middle Tennessee Presentation

1. <ul><li>Chris Cheatham, Esq., LEED AP </li></ul>Green Building Legal Issues On the Horizon

2. On the Horizon The Top 100 (green contractors) generated $38.69 billion in revenue in 2008 from projects registered with or certified by third-party rating groups. . . . This marks a startling 70% [increase from] $22.76 billion [in revenue generated] for the group in 2007. Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved.

3. On the Horizon Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>What Will You Learn? </li></ul><ul><li>Think twice before making guarantees </li></ul><ul><li>Guarantees of certification are risky </li></ul><ul><li>Insurance hard to get </li></ul><ul><li>Energy efficiency hard to control </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

4. On the Horizon Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Agenda </li></ul><ul><li>State of green building </li></ul><ul><li>LEEDigation </li></ul><ul><li>Problematic regulatory schemes </li></ul><ul><li>Green building defects </li></ul><ul><li>What’s on the horizon? </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

5. State of Green Building Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><ul><li>H.R. 1, the American Recovery and Reinvestment Act of 2009 (ARRA) </li></ul></ul><ul><ul><ul><li>$25 billion for the green building industry </li></ul></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

6. State of Green Building Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. $4.5 billion $3.6 billion $3.1 billion $5 billion Copyright © 2009, Chris Cheatham. All Rights Reserved.

9. LEEDigation Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Shaw Development v. Southern Builders </li></ul><ul><ul><li>Shaw retained Southern Builders to construct $7 million condo project </li></ul></ul><ul><ul><li>Shaw sought LEED Silver certification </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

10. LEEDigation Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Shaw Development v. Southern Builders </li></ul><ul><ul><li>The Contract </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

11. LEEDigation Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Shaw Development v. Southern Builders </li></ul><ul><ul><li>The Contract </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

12. LEEDigation <ul><li>Shaw Development v. Southern Builders </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><ul><li>Allegation: Breach of Contract </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

13. LEEDigation <ul><li>Shaw Development v. Southern Builders </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><ul><li>Allegation: Negligence </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

14. LEEDigation Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Shaw Development v. Southern Builders </li></ul><ul><ul><li>The Damages </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

15. LEEDigation Project is designed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.” Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Hypothetical Copyright © 2009, Chris Cheatham. All Rights Reserved.

16. LEEDigation Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Project will be constructed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.” Hypothetical Copyright © 2009, Chris Cheatham. All Rights Reserved.

17. LEEDigation Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Project will comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.” Hypothetical Copyright © 2009, Chris Cheatham. All Rights Reserved.

20. [TITLE OF PRESENTATION] Copyright © 2009, Chris Cheatham. All Rights Reserved. - U.S. Mayors Conference, Mainstreet Economic Recovery Report Copyright © 2009, Chris Cheatham. All Rights Reserved. Suretyship and Green Building [TITLE OF PRESENTATION] Regulatory Compliance

22. Regulatory Compliance <ul><li>D.C. Green Building Act of 2006 </li></ul>“ (b) On or before January 1, 2012, all applicants for construction governed by section 4 shall provide a performance bond” “ (g) All or part of the performance bond shall be forfeited to the District and deposited in the Green Building Fund if the building fails to meet the verification requirements described in sections 3 and 4.” Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved.

23. Regulatory Compliance <ul><li>D.C. Green Building Act of 2006 </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Surety and Fidelity Association of America and Surety Bond Producers: </li></ul><ul><li>“ The new law incorrectly uses the term ‘performance bond.’ In short, the performance bond assures that the construction contract, and therefore, the project will be completed.” </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

24. Regulatory Compliance <ul><li>D.C. Green Building Act of 2006 </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved.

25. Regulatory Compliance <ul><li>D.C. Green Building Act of 2006 </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved.

29. Regulatory Compliance Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Question for you </li></ul><ul><ul><li>“ 4.4. ... [N]ew development is encouraged to at a minimum, achieve Leadership in Environmental and Energy Design certification. A floor area ratio (FAR) of up to 7 may be allowed if the proposed structure achieves a level of “Silver” LEED certification.” - Nashville Downtown Neighborhoods Design Plan </li></ul></ul><ul><ul><li>What is the enforcement mechanism? </li></ul></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

31. Green Defects <ul><li>Energy Efficiency </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved.

32. Green Defects Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>Energy Efficiency </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

34. What’s On the Horizon? Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>“ This commitment must carry forward if the building or space changes ownership or lessee.” </li></ul><ul><li>“ NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.” </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

35. What’s On the Horizon? Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Recipe for LEEDigation 1. GSA requires LEED Silver 2. GSA receives $4.5 billion 3. Underbidding by 10-20% Copyright © 2009, Chris Cheatham. All Rights Reserved.

36. What’s On the Horizon? Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. <ul><li>What Did You Learn? </li></ul><ul><li>Think twice before making guarantees </li></ul><ul><li>Guarantees of certification are risky </li></ul><ul><li>Insurance hard to get </li></ul><ul><li>Energy efficiency hard to control </li></ul>Copyright © 2009, Chris Cheatham. All Rights Reserved.

37. What’s On the Horizon? Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved. Want to learn more? www.greenbuildinglawupdate.com [email_address] Copyright © 2009, Chris Cheatham. All Rights Reserved.

USGBC Middle Tennessee Presentation

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USGBC Middle Tennessee Presentation

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