Who is liable for green building performance?

As standards become more stringent, experts urge care on guarantees

NORTH BAY – Green building performance, or rather failure to perform, has long topped the list of legal risks related to sustainability-minded construction, but developers face even greater stakes this year as government-mandated LEED standards loom and achieving certification becomes more difficult.

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“Whether it’s the engineer, architect contractor, builder, the biggest issue in green building is writing careful construction contracts that do not guarantee a certain level of performance," said North Coast Builders Exchange Green Building Coordinator Hallie Fraser.

"If it is guaranteed, the building doesn’t achieve that level, the owner can charge a breach of contract and all can be liable, on up the tree.”

Though just a handful of green building cases have actually gone to trial, North Bay industry experts say disputes are most often tied to falling short of promised financial savings or tax incentives. Shaw Development v. Southern Builders is the most noted case, where the party sued for the loss of about $635,000 in tax credits, though the matter was eventually settled out of court.

“Project owners are looking more and more closely at how effective green measures are and builders have to be careful not exaggerate what they’ve done or what performance will be,” said Santa Rosa Green Building Advisory Committee chairman Dick Dowd, who is also vice president and co-owner of Pinnacle Homes.

He and other experts said, however, even with carefully written construction agreements, builders face new risk from the likelihood of government-mandated green certification.

“Green building becomes risky when an owner can sue for damages because of a loss of a specific green certification, like savings in electricity or water, or something like that," said Codding Enterprises Chief Sustainability Officer Geoff Syphers. "But building-performance failure will become even more of an issue if it means not meeting a local ordinance.”

At the same time, the nation’s most recognized third-party green certifier for nonresidential structures, the U.S. Green Building Council, is requiring new buildings to track water and energy-use for the first five years of operation as a condition of certification. Previously, buildings could achieve LEED rating solely based on design.

“I have finished a lot of LEED-rated buildings, and it’s hard to know how if it’s really going to operate and be maintained as it was designed to,” Mr. Syphers said.

In light of reports that an estimated quarter of all LEED-certified buildings are not as green as predicted, the building council updated the process to require the ongoing performance data. In August, officials augmented the new LEED version 3.0, or LEED 2009, with the formation of the “Building Performance Initiative,” which will eventually collect data on all existing certified buildings. If the building isn’t up to snuff and doesn’t make changes, it’s possible the rating would be rescinded.

For two months ending last month, the council organized meetings with professionals across the country to preview the data-collection process and proposed analysis methodology. The organization will present the culmination of the meeting during a summit in Phoenix next week, after which researchers will officially begin collecting data.

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“I think for some people the LEED plaque or christening provides somewhat of a feeling of added value, even if the building doesn’t actually do all its designers hoped it would,” said Napa-based Eco-Organize green building consultancy owner Toni Renee Vierra.

“I think it’s great they are tweaking the certification process to where it better reflects actual performance, but rightly so it will make it more difficult. ... In California, since we are kind of leading the way on building ordinances, a lot hinges on the way the LEED system is organized.”

Though no areas in the North Bay except San Rafael currently mandate a specific certification, most incentivize or require some kind of green-building measure for new projects. Keeping track of which city requires what can also muddy the process and increase risk for inexperienced green builders.

The city of San Rafael is currently attempting to rectify the discrepancies across the county by fashioning a standard green-building ordinance. A task force comprised of council members from each jurisdiction will vote on the draft Nov. 19 with the hope of February implementation.

“We started the effort for a few reasons, one being conversations with the Marin Builders Association," said San Rafael Community Development Director Bob Brown.

“They are of course supportive of green building, but they have kind of been going crazy and begged for consistency in codes across the county.”

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