Role For Attorneys In Building Green

Recently, I wrote at about how legal issues have largly been ignored by the USGBC.  I first posted an article about the legal considerations for green buildings in July 2007.  Below is an update to that article.

Green building has hit the real estate scene remarkably quickly, but little attention has been paid to the legal implications of this new area. As green building and ecological sustainability considerations are becoming more prevalent, new regulations are being enacted by local governments around the country and old regulations are being adapted to embrace green building practices. State, local and federal dollars are being made available for green building projects through tax incentives and grants. Insurance companies and financiers are making products and instruments for green building projects available. As a result, there are new legal issues to consider when embarking on a green building project, including: drafting construction and design contracts that incorporate green building standards; navigating the local building and zoning approvals processes and securing public financing; negotiating with insurance and financial institutions and resolving disputes over green building projects that fail to achieve their sustainability goals.

Green building projects large and small must obtain permits from local governments, but the regulatory environment is in flux. In many places the zoning and building codes were developed in response to the health and safety issues of a century ago, and certainly not developed with green building in mind. In others, due to lack of action on the federal level, local governments are creating new regulations to encourage sustainable development. As old regulations are being adapted to new technologies and new regulations are developed, attorneys can provide critical guidance on the local regulatory landscape as part of the planning for a green project.

Furthermore, private and government entities are providing significant financial incentives to encourage green building. For example, Gov. Edward G. Rendell's newly released energy independence strategy earmarks $150 million ($50 million for grants; $100 million for loans) for green building projects. Fireman's Fund offers discounted pricing for building owners who commit to greens standards, and provides specialized insurance to allow for repair or replacement of green building projects in the event of a loss. Lawyers have a unique role in identifying and securing access to financial incentives and risk management tools.

Participants in the development process will require new contracts to ensure compliance with green building goals. Most of the entities establishing criteria for the performance of green building are private, nonprofit organizations like the United States Green Building Council (USGBC). Many local regulations and incentives for green building are directly linked to these certifying criteria, particularly USGBC's Leadership in Energy and Environmental Design (LEED) standard. If a project must achieve a certain LEED or similar rating to qualify for funding or approval, the construction and design contracts should reflect that ambition.

Finally, although the green building movement is in its halcyon days, new expectations will inevitably lead to conflict. A multimillion-dollar development project will fail to gain the LEED credits required to secure a government grant, and litigation will doubtless ensue.

These are some of the legal considerations in building green. Considering the legal issues should not be seen as an impediment to green building, but rather as a way to manage risk and to proceed with a smooth development process.

Parts of this post were previously published in the Legal Intelligencer.

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Comments (4) Read through and enter the discussion with the form at the end
Wind4me - December 3, 2008 9:09 PM

found you on can we as a society change the laws for allowing home wind turbines????

Patrick LaCorte - December 4, 2008 10:50 AM

The fact that Greenbuild (USGBC) has been able to ignore including legal sessions in the conference thus far says volumes about the green movement and the low concern for all things legal. With the exception of greenwashers - and they are increasing in number everyday - the vast, vast majority of architects and engineers involved with designing green buildings are aspiring to higher standards of building design and performance. We are far removed from the concerns of designing buildings that are just good enough to comply with the code. And as long as we avoid overselling the benefits of the green building we are designing, we will continue to have very little to deal with legally. So I don't think we need a panel of lawyers to debate that topic. I think Rick Fedrizzi can give us all the info we need to know by devoting a few minutes of his plenary speech to that at Greenbuild 2009.

Susan Dorn - December 4, 2008 6:59 PM

Shari, I’m sorry that you didn’t take advantage of some of the sessions that Greenbuild featured, a number of which did touch on liability concerns. Furthermore, prior to Greenbuild, USGBC proactively sought out legal experts to weigh in on this issue, and distributed their findings at the conference. Anticipating the interest in this subject, USGBC convened a panel of four legal counsel lawyers, Dan Slone (McGuire Woods LLP), Keith McGlamery (Ballard Spahr Andrews & Ingersoll, LLP), David Blake (Seyfarth Shaw), and Jeff York (HOK). We asked them to discuss new legal theories advanced in the context of green buildings, and USGBC developed a white paper out of that discussion. Each attorney agreed that all persons involved in building development, design and construction face risks and that sustainable building projects are not exempt from such concerns, but each lawyer had excellent ideas about ways to mitigate those risks.

Any new challenge presents risks, but, as you point out, these are manageable risks so long as appropriate thinking and negotiation takes place at the commencement of a project. In fact, the integrated design approach fundamental to green building success requires the front-end participation of everyone involved, including the lawyers. Let me know if you would like to participate in USGBC’s informal Legal Working Group to assist us as we move forward in this complex legal environment.

Chris Hill - December 9, 2008 10:53 AM

As always, Shari, you hit it right on the head. I look forward to working with you on some safety issues.

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