green building intro and legal issues
DESCRIPTION
Introduction to sustainable building and rating systems. Summary review and discussion of legal issues and considerations in real estate development, design, construction, and leasing contracts. Discussion of sustainable building ordinances in the metro Atlanta area, including the sustainable building ordinance being considered by the City of Atlanta.TRANSCRIPT
Robert C. Newcomer [email protected] The Lang Legal Group LLC 404.320.0990
Business, environmental and real estate litigation and counseling.
LEED-AP
Member, Sustainable Atlanta Green Building Taskforce.
Urban Land Institute Co-Chair, Sustainability -
Community Assistance Sub-committee
Member, Technical Advisory Panel Committee
Director, Green Chamber of the South.
Green (Sustainable) Building Sustainability Green Building and
Rating System Legislation Contract Issues Claims and Litigation
Sustainability
“To meet the needs of the present without compromising the ability of future generations to meet their own needs.” - Brundtland Commission
Green building is the practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building's life-cycle from siting to design, construction, operation, maintenance, renovation and deconstruction.” - EPA (Green Building Workgroup)
Buildings: Triple Bottom Line Sustainability
Less environmental impact
Greater energy efficiency
Improved cap rates Increased marketability Higher lease rates
Improved productivity Reduced absenteeism Community connectivity
Population
Petroleum Resources
Test
12%Water Use
30%GreenhouseGas Emissions
65%WasteOutput
70%ElectricityConsumption
U.S. Building Impacts
GLOBAL COGLOBAL CO22 EMISSIONS EMISSIONS ( (BY SECTOR)BY SECTOR)
#1 Buildings#2 Transportation
#3 Industry
Global Warming?
Scientific Evidence
Carbon-based regulation . . . ?
Massachusetts v EPA (2007) EPA “Endangerment Finding”
Six heat-trapping gases are pollutants that endanger public health and welfare.
Proposed mandatory reporting of greenhouse gases emissions (April 2009)
Federal regulation . . . Cap & trade, carbon tax, ???
Implications for real estate . . . ???
“LEAP” to Zero Carbon:
Energy efficiency (reaction to 1970s oil crises) Green (environmentally responsive) Sustainable (holistic) High Performance (accountable)
Carbon Neutral
Green Building
LEED-NC Rating System
Sustainable Sites 14 total points (1 prerequisite + 14 credits)
Water Efficiency 5 total points (no prerequisites + 5 credits)
Earth & Atmosphere 17 total points (3 prerequisites + 6 credits)
Materials & Resources 13 total points (1 prerequisite + 13 credits)
Indoor Environmental Air Quality 15 total points (2 prerequisites + 15 credits)
Innovation in Design 5 total points (no prerequisites + 5 credits)
_____________________________________ 7 prerequisites + 58 credits (69 total points)
LEED “Certification”
Register project Satisfy all prerequisites Complete online submittals and
documentation for credits to be sought Respond to questions Retain back up data and documentation.
Four Levels of LEED Ratings:
Green Buildings worldwide are certified with a voluntary,consensus-based rating system.
USGBC has four levels of LEED.
LEEDv3 Rollout
Projected LEED EBO&M Projects
2006 2007 2008 2009 2010 2011 2012 2013
<50 <100 <1,000 <5,000 10,000 22,000 30,00050,000
50,000 -
45,000 -
40,000 -
30,000 -
25,000 -
20,000 -
15,000 -
10,000 -
5,000 -
1,000 -
By default, non-green buildings will be known as BROWN buildings
Less demand
Lower rents
Higher operating cost
Decreased value
Go GREEN or go home
U.S. Office Rental Rates:“Green” v. “Brown” Performance
Market Bifurcation Starts in 2009
2009 | 2010 | 2011 | 2012 | 2013|
2002 | 2003 | 2004 | 2005 | 2007 | 2008 |
CLASS ACLASS A
CLASS BCLASS B
Avera
ge R
en
ts
PS
F
Green Building Legislation
Federal (growing support and incentives) States Cities
Chamblee and Doraville ConyersAtlanta (proposed)
Chamblee and Doraville
Applies to: all municipal buildings commercial buildings and “multiple residences” > 20,000 sf.
Must be LEED-Certified (Chamblee accepts GG) No CO until certification
temporary CO available
Infeasibility exemption available
Conyers
Applies to: residential and municipal buildings > 5,000 sf
LEED NC or LEED Homes/EarthCraft No CO until certification
temporary CO available Infeasibility exemption available
City of AtlantaSustainable Building Ordinance
US Mayors Climate Protection Agreement Architecture 2030 Challenge Sustainable Atlanta Sustainable Building Taskforce
Lead Partners Research Engaged stakeholders Incorporated feedback Draft (4) presented to Mayor Franklin (April 27th)
Sustainable Building Ordinance
Applies to: Commercial projects > 20,000 sf Applying for permit 1 year after adoption All commercial projects 3 years after adoption
Sustainable Building Ordinance
Two years after adoption: Sustainable Building Standards
LEED Silver
Green Globes, 2 Globes
EarthCraft Tier 2
One year after adoption:
Sustainable Building Standards
LEED-Certified Green Globes, 1 Globe EarthCraft, Tier 1
Sustainable Building Ordinance
Does not affect: Single-family homesMulti-family projects < 3 storiesZoning or overlay districts
Provides: Compliance options Prescriptive and performance standards Variances from specific standards
Green Building Legal Issues: Certified or “Certifiable”? Development and construction Permitting and incentives Financing Marketing green Leasing Buying and selling green buildings
Legal Issues: Certified? or “Certifiable”? Register project Prerequisites Online submittals and
documentation for credits
Reviewer questions and requests
Retain back up data and all documentation.
DEFINE “certifiability” Determine:
Who decides? How? What data and
documentation is expected?
Retain back up data and all documentation.
Legal Issues:
Certified or “Certifiable”?
Development and construction
Development and construction: Integrated Design Assumes that each system affects the functioning of
another and that all systems must be harmonized to perform together effectively.
Optimizes performance while minimizing cost. Integrated design teams meet early and often:
Identify project goals Allocate responsibility for tasks Review and re-assess throughout design and
construction.
DOCUMENT responsibility for tasks and allocationof risk among the key players
Development and construction: Contract issues
Legal and financial incentives or requirements?
Contract conditions: Green features must be verifiable and verified. Sustainability goals for construction must be met. Risk that green features will hinder building
performance must be minimized. Client must be protected if problems arise.
Managing Risk in Green Buildings:
Assemble experienced green project team Identify sustainability goals and green attributes Document responsibility and allocate risk among key
participants For new green products or technologies:
Review technical data and warranties Research product manufacturer Seek additional guarantees
Certification consultant review/approval of change orders, material substitutions and construction practice changes
Request, collect and retain data and documentation.
Legal Issues:
Certified or “Certifiable”? Development and construction
Permitting and incentives
Permitting and Incentives
Zoning, building and development codes Homeowner/Community Associations
Legal Issues:
Certified or “Certifiable”? Development and construction Permitting and incentives
Financing
Financing
Appraisal Lender initiatives and incentives
Legal Issues:
Certified or “Certifiable”? Development and construction Permitting and incentives Financing
Marketing green
Marketing Green
Brokers, agents and marketing professionals Determine proper message Address marketing message in contracts. FTC “Green Guides”
Substantiated – “reasonable basis” Clear and qualified Do not overstate benefits.
Common problems: Registered – Pre-certified – Certified Implying certification is guaranteed Implying environmental or financial superiority.
Legal Issues:
Certified or “Certifiable”? Development and construction Permitting and incentives Financing Marketing green
Green Leasing
Green Leasing Identify green features Tenant (LL) acceptance of restrictions or
limited regulation of its operations Tenant (LL) compliance with requirements Remedies and damages Tenant (LL) payments to cover cost. Tenant (LL) data collection and reporting
Green Leasing: Work letter
Comply with LL requirements for construction waste management and recycling
Certify commissioning of all HVAC, lighting and energy systems and provide data to LL
Utilize: Energy-efficient lighting fixtures and occupancy-
based controls Low-flow toilets, waterless urinals and sensor-
controlled faucets Wood shall be FSC-certified Paints, stains, sealants and adhesives shall be water-
based, low- or no-VOC Carpet systems shall be Green Label Plus
Green Leasing: Sharing energy savings(a) LL will install, at LL’s sole cost, energy efficient
features to reduce electricity usage as more particular described in Exhibit A.
(b) LL will deliver to T written certification from licensed engineer setting forth projected monthly energy savings (“Monthly Savings”).
(c) On the day T is first obligated to pay rent and continuing throughout the term of the Lease, T shall pay to LL, as additional rent, __ percent (__%) of the Monthly Savings.
Green Leasing: Green Cleaning
Products must be: Environmentally safe, phosphate-free, non-corrosive, non-
flammable, low-VOC emitting, fully biodegradable “Green” (per Green Seal GS-37 Standard) Packaged ecologically
Paper products must be 100% recycled content Garbage bags must be biodegradable or compostable Vacuum cleaners must be capable of removing 99.97% of
harmful particles, including dust, mold spores and most microscopic respiratory irritants and allergens.
Tenant will properly separate recycling material from trash Tenant will provide MSDS to LL for all janitorial supplies
provided by T
Green Leasing: Double-edged Sword?
T may have additional claims against LL under quiet enjoyment provision
LL may be held to higher standard for the green features and building performance.
Legal Issues:
Certified or “Certifiable”? Development and construction Permitting and incentives Marketing green Green Leasing
Buying and selling green buildings
Buying and Selling Green Buildings
LEED-NC is no guarantee of performance
Buyers will demand information
Test
Green Claims and Litigation Claim scenarios Litigation
Shaw Dev. v. Southern Bldrs AHRI v. City of Albuquerque
Green Claims and Litigation Architect agreed that design would
achieve LEED-Gold. Developer advertised that building would reduce operating costs and provide healthier indoor environment. Building failed to achieve Gold certification due to budget and scheduling problems. Developer sued claiming Architect had guaranteed the certification level.
Green Claims and Litigation Following installation of a green roof,
structural instability resulted in water infiltration causing significant damage. Structural engineer claimed that he had not been provided the proper information related to the green roof. Contract with structural engineer limited its liability to an amount less than the cost to repair.
Green Claims and Litigation Law firm hired an architect to design
sustainable office space. The architect, in reliance on information provided by manufacturers, incorporated products into the design. Local press investigated the products and claimed they were not as “green” as advertised. Law firm sued Architect claiming its reputation was damaged.
Green Claims and Litigation County government required recycling of
construction materials. Architect agreed to monitor construction services. Construction contractor decided that recycling caused excessive delays and that declining price for recycled materials justified dumping construction waste in another state. County took action against Owner, and Owner sued Architect for failing to properly monitor construction services.
Green Claims and Litigation
Shaw Dev. v. Southern Bldrs
AHRI v. City of Albuquerque
QUESTIONS?QUESTIONS?
Robert C. NewcomerThe Lang Legal Group [email protected]
404.320.0990