Green Building – The Legal Risks & The Unknown
On December 2, 2008
By Scott Wolfe Jr
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However, the implications of green building certifications and standards have yet to be tested in the courts – and there is some uncertainty as to how "green building litigation" will look. Whether such litigation will exist, though, is not such a mystery, as all sources agree it’s not a matter of if, but when.
Therefore, contractors, architects, engineers, green building suppliers and construction professionals involved in the green building process should be cautious about the potential of green building litigation, and should take precautions to protect itself from liability and exposure in the event of a green building dispute.
What Are The Risks?
Unfortunately, none of the green building disputes in the past fifteen years have gone the distance in litigation, and accordingly, we’re unable to analyze a court’s determination of damages for a breach in a green building contract.
However, there has been much speculation as to the potential damages associated with such a breach.
A green building contract is essentially an agreement to build a structure more energy efficient. There are usually two benefits to the cause: (1) The building’s energy efficiencies makes it less expensive to operate; and (2) The property owner may be entitled to tax credits for building green.
Parties have speculated, therefore, that if a green building contract is breached, or if post-construction the structure is unable to obtain a promised certification, the property owner would seek damages equal to the potential tax credits and the potential energy savings. Presumably, a party could also collect liquidated damages if the substantial completion of a project is delayed as a result of green building failures.
Understanding the Risks to Green Building &
Managing Risks
By analyzing green building disputes and lawsuits that have surfaced, as well as available insurance programs, in the next two posts Wolfe Law Group will discuss potential ways to limit your company’s exposure in the event of a green building dispute.
First, we’ll discuss the availability of green building insurance and bonds.
Second, we’ll discuss the green building litigation that has surfaced, and analyze the claims in those matters to determine how green building contracts and procedures can be improved to limit liability.
About the Author: Scott Wolfe Jr
Scott Wolfe, Jr. obtained his J.D. degree from Loyola University of New Orleans, and his B.A. from Southern Methodist University in Dallas, TX. In 2006, 2007, 2008 and 2009, Scott was recognized as a Leader in Law by CityBusiness Magazine. The son and grandson of general contractors, Scott is a construction litigator in the Pacific Northwest, and the founding member of the bi-coastal law firm, Wolfe Law Group. Scott is also the founder and CEO of Express Lien, Inc., a legal document preparation service for contractors. In 2008, City Business Magazine recognized Scott as one of its Innovators of the Year for the Express Lien concept. As an entrepreneur himself, Scott has a strong background in business and commercial transactions and laws. He focuses his practice on the legal issues facing the construction industry, and has represented clients in multi-million dollar construction disputes in litigation and alternative dispute resolution proceedings. Scott is a LEED AP.
