Green Building Disputes Prompt Lawsuits

July 9, 2009

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Lawsuits and claims are emerging as businesses embrace “green” building and other sustainable processes, says Harvey Berman, a partner at the law firm of Bodman LLP, in an article for the Ann Arbor Business Review.

Berman said the first reported lawsuit involving a green building is believed to be a case filed in Maryland by a contractor against a developer. The developer alleged that the contract which included the project manual and specifications required that the contractor construct an environmentally sound “green building” in conformance with a Silver Certification Level according to U.S. Green Building Council’s Leadership in Energy & Environmental Design (LEED) Rating System, said Berman.

The contract documents attached to the developer’s counterclaim contained no provisions limiting the contractor’s liability relating to any “green building” aspects of the project, did not discuss the role of the developer or the design/construction team regarding the LEED certification and did not discuss the LEED process or the effect of a project delay on the attainment of tax credit but the contract did contain a construction time limit of 336 days.

Since most green building standards involve some type of incentive for building green, there is an inherent potential liability for design professionals and contractors if an owner does not achieve the required “green” certification, warned Berman.

The second reported lawsuit involves the City of Albuquerque, N.M.’s enactment of a new green building law including an Energy Conservation Code and a High Performance Buildings Ordinance.

This lawsuit, which is still ongoing, alleges that a federal law, Energy Policy and Conservation Act of 1975, preempts the city’s new green building law. The plaintiffs claimed that the increased requirements of the new Albuquerque green law would prohibit them from selling or installing residential or commercial HVAC products and water heaters for use in the city that do not meet the requirements of the new law, said Berman.

Berman’s lessons learned: Parties involved in a green building project should carefully review their contracts for potential liability arising from green certification requirements, and municipalities adopting green building laws should take special care to avoid laws that violate or conflict with other existing or superseding laws.

The rise of carbon offset companies is also resulting in some misrepresentation. In some cases, carbon offset companies are double or even triple counting carbon credits and offsets, according to the Coyote Blog.

One example cited is My Emissions Exchange. Here, the carbon credits are equal to a one-ton reduction in carbon emission, and are currently trading between $10 and $25, according to the site, said the blog. The blogger says the exchange makes no differentiation for how one’s power is generated, which translates into “soft” savings as real credits to be paid for.

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Reader Comments

A clarification from MyEmissionsExchange: when we calculate reductions, we do differentiate on electric power sources using the blended carbon emissions rate for each state using data from the U.S. Energy Information Administration. To see more explanation, please see our comment at Coyote Blog.

MyEExTeam | July 10th, 2009

Green ethics will continually become a greater and greater part of all our lives whether in the medium of construction or anything else. It’s impotant to embrace it in a positive manner.

OSBS Building Supplies | August 26th, 2009

Why is this reported as Berman’s lessons? All of the insights and the cases themselves were reported and explained in great detail by Stephen Del Percio at his blog http://www.greenrealestatelaw.com.

B Donson | October 5th, 2009

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