Top 10: What every green building contract should consider
Green buildings are sprouting all over the country as the trend toward sustainability continues.
Successful green projects present unique issues and require that the parties involved in the project address certain issues in their contracts. Doing so will increase the likelihood of project success and decrease the risk of disputes and lawsuits.
Here’s my Top 10 list of what most green building contracts should address in the areas of design, construction and consulting, depending on the nature and scope of the project.
1. Make clear that the owner’s goal is for the project to incorporate sustainable elements into the project scope and include any other information that will guide the contracting parties as to the level of sustainability sought. 2. Designate any sustainability standards or rating systems that the project must achieve and the level of achievement sought, for example: LEED “Gold” or “Four” Green Globes, or that the building will comply with ASHRAE Standard 189.1 for High-Performance Green Buildings. 3. To the extent known, describe any budgetary considerations — especially those relating to sustainability. 4. Detail the extent to which "green" professionals or consultants will be involved in the project, e.g. persons who are LEED Accredited Professionals, commissioning agents, and designers or consultants with green design, construction or estimating experience and, if known, the roles that each of these parties will play in the project. 5. Include a method for allocating responsibility for achieving sustainability standards among the design, consulting, and construction team (the “green team”) including who will collect the information and documents required for certification, who will manage the certification process, and who will submit documents for certification. 6. Require that the members of the green team cooperate with each other to achieve the required green standards and that they meet regularly to plan the project.
7. Describe the extent of liability, if any, of members of the green team in the event that green standards are not achieved, including any provisions limiting the liability of members of the green team, if appropriate. 8. Specify the length of time allowed for achieving any green building certification and whether any funds will be retained by the owner from any progress or final payment until the required certification is achieved. 9. Indicate any special insurance coverage required relating to green aspects of the project. 10. Specify whether members of the green team will be required to provide additional services in the event that the project fails to achieve the desired certification, and if so, whether there will be a charge for these additional services.
Finally, prior to drafting a contract, consider utilizing or at least reviewing a standard form created by a reputable construction industry organization that has created green design or building forms, such as the American Institute of Architects or ConsensusDOCS. Many of these forms are evolving as experience with green projects increases. A seasoned green building lawyer can help expedite this process and avoid costly errors. Harvey Berman, a LEED Accredited Professional, is a partner at the law firm of Bodman PLC practicing in its Ann Arbor office. He is chair of the firm's Construction Practice Group and represents clients in construction, real estate, and business matters. Contact him at (734) 930-2493 or at firstname.lastname@example.org.