Posts Tagged ‘Green Building’

Cut Your Risks: Build – or Rebuild – Sustainably

Cut Your Risks: Build – or Rebuild – Sustainably

This article was contributed by Carrie Van Brunt-Wiley, Editor of the blog. Carrie has been writing insurance news and consumer information for since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.

Green building practices do more than protect the environment, and smart homeowners have more than energy savings to gain when they strive to comply with LEED requirements. Homes built with sustainable, energy-efficient materials are proving to be less vulnerable to wind, hail and water, making them better investments for homebuyers and more attractive to insurers seeking to lessen risk. This could mean lower insurance premiums for homeowners who take steps to increase their homes’ sustainability.  

Shelter from the storm

Extreme weather is nothing new to Louisiana, but the devastation wrought by Hurricane Katrina was particularly severe.  The need to rethink building practices became all too clear overnight. If there is a silver lining to be found in the Katrina disaster, it’s that those communities devastated by the hurricane have had – and still have – the opportunity to rebuild in such a way that should make them better able to withstand the next storm that blows through.

The Insurance Information Institute (III) reports an average cost of more than $6,000 to mitigate an insurance claim caused by severe weather. According to the III, Hurricane Katrina cost $16.2 billion in insurance claims, averaging $96,821 each. Consider how much lower this might have been if more homes and businesses had been built using impact-resistant roofing materials such as aluminum or steel that can withstand not only fire but wind, hail and flying debris. Some insurance companies already offer premium discounts to Louisiana homeowners who install these roofing upgrades.

It pays to upgrade your home

Water damage claims typically cost insurance companies around $7,000, according to the III, and make up almost 25% of homeowners claims in the U.S.  In an effort to bring this average down, some insurance companies may offer lower premiums for homes that earn Indoor Water Efficiency points by complying with the LEED v2009 requirement of 20% water savings.

Following are some other upgrades that could lower your homeowners insurance costs:

  • New plumbing systems
  • Updated HVAC systems
  • Modernized electrical systems

Updating these systems in your home can help you avoid expensive water damage, mold and fire claims. Insurance companies recognize that you are lowering your chance of filing claims and are likely to reward your efforts.

The benefits of green building are so great that some homeowners insurance companies now offer green replacement coverage for standard homes.  If a non-LEED certified home is damaged or devastated by covered peril, green replacement covers the cost to rebuild using sustainable, energy-efficient materials.

Savvy homeowners know that saving energy and materials are the underlying reasons to go green. But they also understand that the value of sustainable building goes beyond those savings. One way you could realize that value is by lowering your home insurance risk, which could mean lower home insurance premiums.

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Washington Bill Ties Sales Tax Deferrals to LEED Standards

Thanks to the Beer With A Construction Lawyer blog for pointing out a new bill in the Washington State Legislature that has green building implications.    The bill is sponsored by Senators Kastama, Rockefeller, and Ranker.

The bill, if passed, would offer very aggressive tax incentives to projects that meet LEED certification standards.   Here is the breakdown:

Platinum Certification:   100% Sales and Use Tax Deferred

Gold Certification:  75% Sales and Use Tax Deferred

Silver Certification:  50% Sales and Use Tax Deferred

Less than Silver:  25% Sales and Use Tax Deferred

Projects would have to apply for the deferral before initiation of the construction.

The bill is interesting to green building nerds because it completely relies on the LEED green building standards published by the United States Green Building Council.   While the LEED program is certainly the most widespread of programs in the country, it’s not without its critics.   See Chris Cheatham’s recent article on his Green Building Law Update blog analyzing the complaint against the USGBC for using anti-competitive practices.

You can follow this bill at the legislature’s website, or by subscribing to the bill’s RSS feed.   Download the original bill text.

This article was originally posted on Wolfe Law Group’s topic-specific Northwest Construction Law Blog.

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Green Building Law? Is It Different Than Ordinary "Law?"

There are a growing number of construction attorneys getting certified in green building professional courses and touting themselves as “green litigation attorneys.”  Our friends over at the Best Practices Construction Law blog just posted an interesting blog article about whether there is a difference between “green building law” and ordinary run-of-the-mill “law.”

The article is titled:  Green Building for Attorneys:  Is It Merely Hoopla? (spoiler: author concludes that it is not merely hoopla).  The article discusses another blog post on the subject from LAW/ARK:  The Real Green Goblin – Emerging Legal Liability for Green Design Professionals and Contractors (Part 1).

Since we’re writing this article on the “Louisiana Green Building Law Blog,” you likely know where we come down on this issue.  And we clearly have a dog in the fight.  But our reasons might surprise you.

Here is the argument

Here is a quote from the LAW/ARK post, in support of the position that “green building law is just law:”

The bad news is that attorneys, especially those already practicing in construction law, will soon realize that aside from green design and construction’s sometimes specialized and occasionally ill-defined vernacular, there’s no real novelty in the types of claims that might arise. No new frontiers of jurisprudence need be explored – a leaky green roof is still a leaky roof – whether it also requires regular mowing and landscape maintenance changes little from a legal perspective.

In response, Matt DeVries at the Best Practices Construction Law blog says that while it may be correct that there is no novelty to the types of claims that may arise in green construction disputes:

The novelty in the green building industry is the new set of standards that will inevitably become part of the legal dispute.   In other words, while ‘a leaky green roof is still a leaky roof’…there will be new risk to be allocated, different types of damages lost, additional players involved, varied proof required, and yes, perhaps a novel cause of action alleged because that leaky green roof system failed.

Here is our voice

There is something important that is not discussed in LAW/ARK’s post about green building law:  the underlying claims themselves.

The leaky roof analogy is actually not spot-on, because if the roof was leaking, the claim wouldn’t necessarily be a “green building claim.”   It would be an ordinary claim.  A green building claim would occur when the green roof didn’t perform as it was anticipated from an energy savings or environmental perspective.   Or, if the green roof didn’t meet the standards of the Green Building Council or other accreditation organization, and the property lost a valuable certification.

Of course it all boils down to unfulfilled expectations, but what separates a green building attorney from an ordinary construction attorney is that they have a true understanding of the expectations.   It’s what Matt DeVries points out:  understanding the “new risk,” “different types of damages lost, additional players invovled, varied proof required,” and more.

After all, what really separates a construction attorney from an ordinary business attorney?   Breach of an ordinary contract and breach of a construction contract involve the same claims…but what separates the construction attorney is her familiarity with the construction industry, and the types of damages, players, risks and claims that frequently arise.

The same must be said for Green Building counselors.  It’s not a new body of law, it’s just a new set of situations.

Posted in:     Green Building  /  Tags: , , , ,   /   1 Comment

Starbucks Dreams About Taking the LEED

As the green building movement gains momentum in Louisiana, and across the nation, many have debated whether going LEED (or just going green) is worth the increased project costs.

While it certainly won’t put an end to the debate, a recent announcement out of Seattle-based Starbucks is interesting.  The coffee giant (with recent financial woes) announced the opening of a new LEED location in Seattle’s Pike Place Market, and very aggressive goals to get LEED certifications across the country, at its headquarters, and even at its roasting facilities.

What does this mean for green building in Louisiana?

It’s really too soon to say, but here are some possibilities:

(1)  Louisiana Starbucks locations may be among those getting LEED certification in the next few years;

(2) The move may influence other retail chains to build green;

(3) The committmenet from such a retail giant adds to the nation’s and Louisiana’s general green momentum.

It will be interesting to watch…but once again, as the demand for green building products and services increases, so will the supply.  From the supply perspective (architects, contractors, etc.), it’s important to ensure that your company is providing the services it promises, and protects itself from energy performance milestones that may be out of their control.

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A Survey of Green Building Litigation – What Can We Learn

Over the past few weeks, Wolfe Law Group has discussed the concept of Green Building to its readers. It’s quite clear from these posts that Green Building is a growing phenomenon in the United States construction industry. McGraw Hill reports that green building will triple in the next five (5) years, and there’s no sign of it slowing thereafter.

It’s quite clear that the construction industry must prepare itself for the green revolution.

As builders, engineers, architects and other construction participants “dip their toe” in the green building waters, however, they must also consider some of the risks and potential legal exposure that may result from green building disputes.

Unfortunately, despite predictions of voluminous litigation, green building standards, regulations and contracts have been tested infrequently through litigation – and construction attorneys are mostly left guessing as to how future disputes will be resolved. This posts surveys some of the cases that have surfaced in the past five years, and discusses what they can tell us about the future of green building litigation.

Shaw Development v Southern Builders
There has been much discussion of this case out in the green building blogosphere. Green Building Law Update blog, for example, discusses the case in detail here, here and here. GreenBuildingsNYC also discussed the “anatomy” of the action in its blog post here.

The case itself brings up a lot of potential issues for green builders, but since the matter was settled without trial, the green building world is still left guessing as to the significance of those issues.

As explained by the two above-mentioned green building blogs, Shaw counter-sued Southern Builders seeking reimbursement for lost tax credits for Southern’s alleged failure to “construct an environmentally sound ‘green building’ in conformance with the LEED rating system.”

The parties used an AIA A101 1997 form contract, and stipulated therein that:

“Project is designed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section ‘LEED Requirements.’”

Unfortunately, it failed to indicate who assumed the risk of getting the LEED Certification, and many attorneys watching green building litigation were interested in seeing how the court would assign the risk of obtaining these credits. Alas, with the case settled, we’ll never know.

However, parties to green building projects can learn something from the dispute: the AIA Form Contracts (& other form contracts) do not adequately accommodate green building projects. The parties should employ attorneys to contract more specifically regarding the green building expectations, and to assign risks related to the LEED Certification and building standards to the appropriate parties.

Washington Nationals Stadium Dispute
This “dispute” was recently settled without even evolving into actual litigation, and therefore, it’s even more difficult to analyze the possible implications of the green building issues.

However, from a discussion found on the Green Building Law Update blog, a component of the dispute between the parties related to the LED lighting on the Nationals Scoreboard, and specifically, whether the failure to obtain LEED Certification related to the scoreboard prohibited the project from reaching “substantial completeness,” and therefore stopping to toll of liquidated damages.

Since the matter is settled, we’ll be forever left without a definitive understanding of the issue.

The raised questions should serve as a warning to green building contractors that green building provisions and requirements should be well-drafted to avoid problematic situations like the Nationals organization had in D.C.

Posted in:     Green Building, Litigation  /  Tags: , , , ,   /   Leave a comment