Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Smart Agreements and Green Litigation Risks

1,318 views

Published on

This presentation - given to the New Orleans Green Legal Matters Conference - analyzes the risks inherent in green building projects, and those contractual tricks that can be used to limit or minimize those risks. I gave this presentation on October 14th, joined by James d'Entremont of Phelps Dunbar.

Published in: Real Estate
  • Be the first to comment

Smart Agreements and Green Litigation Risks

  1. 1. Smart Agreements & Litigation Risks James d’Entremont Scott Wolfe Phelps Dunbar, LLP Wolfe Law Group Baton Rouge, LA Louisiana | Washington phelps.com wolfelaw.com constructionlawmonitor.com LEED AP
  2. 2. Part I: Litigation Risks
  3. 3. Construction Litigation v. Green Litigation
  4. 4. Unmet Expectations
  5. 5. Unmet Expectations • Cost: The project cost more than expected
  6. 6. Unmet Expectations • Cost: The project cost more than expected • Scope: The project’s scope was more expansive than anticipated
  7. 7. Unmet Expectations • Cost: The project cost more than expected • Scope: The project’s scope was more expansive than anticipated • Schedule: Completion took longer than planned
  8. 8. Unmet Expectations • Cost: The project cost more than expected • Scope: The project’s scope was more expansive than anticipated • Schedule: Completion took longer than planned • Quality: The workmanship quality was inferior to expectations.
  9. 9. Still... Unmet Expectations
  10. 10. Still... Unmet Expectations • Energy Performance: Is the building’s energy systems performing as expected (or promised)?
  11. 11. Still... Unmet Expectations • Energy Performance: Is the building’s energy systems performing as expected (or promised)? • Rating: Did the building achieve the planned LEED rating or other certification?
  12. 12. Still... Unmet Expectations • Energy Performance: Is the building’s energy systems performing as expected (or promised)? • Rating: Did the building achieve the planned LEED rating or other certification? • Long-Term Sustainability: What is the project’s impact on the environment, and is this as expected?
  13. 13. Plus... Unique Risks & Features
  14. 14. Plus... Unique Risks & Features
  15. 15. Plus... Unique Risks & Features
  16. 16. Plus... Unique Risks & Features
  17. 17. Plus... Unique Risks & Features
  18. 18. Plus... Unique Risks & Features
  19. 19. Damages, Codes & Structures
  20. 20. Green Building Codes • California Green Building Code • DC Green Building Act (http://bit.ly/ajMac7) • IGCC (http://bit.ly/cC1GvV)
  21. 21. Energy Inspectors • Cities like Austin and New Orleans are tightening energy codes and emphasizing role of energy inspectors. • New York Times Article (http://nyti.ms/a841ad) • Construction Law Monitor Article (http://bit.ly/bP180O)
  22. 22. Reporting Energy • Cities like Seattle, WA are passing municipal regulations requiring certain properties to report their energy consumption, with plans on regulating consumption in the future. • CLM Article on Requirements (http://bit.ly/cXk8a0)
  23. 23. Tax Credits Tax Credits are available in certain locally, federally and state-wide for solar installations, energy performance, rating certifications and more....
  24. 24. LEED Challenges LEED Challenges: http://bit.ly/aLvGkL LEED De-Certifications: http://bit.ly/bQuxgc
  25. 25. Part II: Who’s To Blame?
  26. 26. Spearin Doctrine “[I]f a contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications.” US v. Spearin, 248 US 132
  27. 27. Architects As LEEDer • Should architects do the design & LEED coordination? • Are architects increasing the price of agreement with owner to accommodate the additional risk? • Is it possible to shift some responsibility to the contractor, suppliers or other project participants?
  28. 28. Contractor Perspective • Bid-build Projects & Contracts that Shift Design Responsibility • Design-Build, & the Increased Risk • Don’t Guarantee Certification, or Spearin in Jeapordy
  29. 29. Insurance
  30. 30. Insurance • Not Much Out There
  31. 31. Insurance • Not Much Out There • Policies Available Are Riders - so, are green risks not covered in standard policies?
  32. 32. Part III: Smart Agreements
  33. 33. Things To Keep In Mind To... Contract Smart. Green, Sustainability, High-Performance Building, Green Certification, etc. No Universal Meaning. Define Them, & Choose a Rating System & Version.
  34. 34. Things To Keep In Mind To... Contract Smart. Consider a Rating Coordinator Identify Responsible Parties Delegate Work and Responsibilities to Appropriate Parties
  35. 35. Things To Keep In Mind To... Contract Smart. Certification is paper- intensive. Identify who will manage the documentation and the certification’s manual requirements.
  36. 36. Things To Keep In Mind To... Contract Smart. Contractors: Don’t tie certification with substantial or final completion. It can take months, and you don’t want to be waiting on money that long.
  37. 37. Things To Keep In Mind To... Contract Smart. Get to know the vendors and products to be used. Don’t subscribe to a technology without investigating, and hold vendors accountable for their promises.
  38. 38. Things To Keep In Mind To... Contract Smart. Damages for failure to certify or for failure to meet certain benchmarks may be murky. Consider waiving consequential damages, and call out these specific expectations and considering waiving those damages or presenting LDs for them.
  39. 39. Things To Keep In Mind To... Contract Smart. Flow Down Clauses: Make sure your obligations go up and down the chain.
  40. 40. Form Contracts For Architects: B214–2007 establishes duties and responsibilities when the owner seeks certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED®). Among other things, the architect’s services include conducting a pre-design workshop where the LEED rating system will be reviewed and LEED points will be targeted, preparing a LEED Certification Plan, monitoring the LEED Certification process, providing LEED specifications for inclusion in the Contract Documents and preparing a LEED Certification Report detailing the LEED rating the project achieved. http://bit.ly/acKt78
  41. 41. Form Contracts For Contractors: On Nov. 10, ConsensusDOCS released the construction industry's first and only comprehensive standard contract document addressing the unique risks and responsibilities associated with building green projects -- the ConsensusDOCS 310 Green Building Addendum. The Addendum incorporates contractual best practices to identify the project participants' roles and responsibilities, as well as the implementation and coordination efforts critical to achieving a successful project using green building elements, particularly those seeking third-party green building rating certification. It was drafted to work well not only with the other ConsensusDOCS contract documents, but also with other form contracts. http://bit.ly/9WVdvo
  42. 42. Smart Agreements & Litigation Risks James d’Entremont Scott Wolfe Phelps Dunbar, LLP Wolfe Law Group Baton Rouge, LA Louisiana | Washington phelps.com wolfelaw.com constructionlawmonitor.com LEED AP

×