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Green Building Presents Legal Risks, But Shouldn't Stop Builders

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GreenBuildingElements.com recently posted a blog titled “Are There Any Risks in Building Green?”   The post mentions a survey conducted by the Marsh Green Building Team finding two things that play into builders’ reluctance to construct green projects: financial concerns and legal concerns.

Examining the Legal Risks

We’ll talk about the legal concerns (& have in the past), which the post summarizes as follows:

The idea of jumping into a supposedly “green-built” project, and then failing to reach LEED certification levels expected by others, is unnerving to think about. There’s also the worry in many constructions that standards of operation and new design features – especially those not covered by the insurance market – will fall short because contractors won’t be willing to take on those things.

Let’s face it – ordinary construction projects present enough legal challenges.   Throwing in unfamiliar green certification process programs and novel green technologies increases risk.   Here are some of the risk factors mentioned by the Marsh Green Building Team report:

  • Not obtaining the LEED certification expected;
  • Determining the appropriate standard of care used by green builders and professionals;
  • The competence of team members, subcontractors, laborers in green building technologies and requirements;
  • Untested contract language;
  • Concerns about contractors taking design responsibilities not covered by insurance.e

Managing Risk

The existence of risk should not stop owners, builders and designers from participating in a green building project.   As the Marsh Team analyzes and the Green Building Elements post discusses, there are many possible solutions for the legal risk factors identified.

Plus, as anyone in the construction industry knows, risk is absolutely everywhere.  A builder is in the business of managing and mitigating risk…and it’s possible to do this with green building.

  • Address Concerns in the Contract:   “Green Contracts” are largely untested, but that is no reason to not draft green contract language.   Before a project begins, have a lawyer experienced in green building projects draft language regarding the roles and responsibilities of each party in a green certification process, and properly allocate risk and liability for green building tasks.
  • Do Not Greenwash.  If you haven’t heard the term ‘Greenwashing,’ and you’re in the green business…it’s time to read up on it.   A builder or designer or supplier can avoid a lot of risk on a green building by simply avoiding vague and misleading advertising or labeling of services/products.
  • Insure.   Finally, it all goes back to insurance.   Insurance is a familiar product in the construction industry, and while policies protecting builders and designers from green building exposure is new…it is out there.   Talk to an attorney and/or your insurance agent about these products.

The post Green Building Presents Legal Risks, But Shouldn't Stop Builders appeared first on Construction Law Monitor.


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