Green Buildings: Legal Issues for Owners to Consider When Deciding on Green Remodeling or Building

by Anne Secker, ESQ

“Green buildings” are part of a widespread and popular move toward sustainability now found in all aspects of the economy.  The agricultural economy is very much a part of that movement and green buildings used in agricultural production are a natural and interconnected part of becoming more sustainable. 

A green building is a structure that is designed to be sustainable for decades.  During construction, a green building  incorporates materials (such as recycled materials), uses energy saving products and equipment  and is based on “green” engineering, all with the end goal of making the building more energy and water efficient.

As with any building or remodel, there are important practical and legal issues for owners to consider when deciding whether green construction fits their needs.  What follows is a helpful checklist to assist in analyzing if a green building construction or remodel is right for you:

 

1.         Evaluate Reasons to “Go Green”      

-Enhancing the Company’s Image:  Green buildings are seen as public relations assets, particularly for companies that strive for brand recognition and an image of freshness.  Fresh food producers are able to position themselves to be more competitive with green buildings, because   a green building fits with the concepts of a healthier lifestyle, fresh produce and sustainability.  Green buildings, particularly for organic producers, promote the image of freshness and sustainability.  Is it helpful to you company to be seen in the forefront of the green and sustainable movement?

-Social Responsibility:  Green building is, in part, a response to concerns about climate change and the responsible use of natural resources. Is it important for the Company to be perceived as a leader in this area?

-Industry Leadership:  Green building allows the use of innovative ideas combined with both simple and complex technology.  If the Company is an industry leader in agriculture, should that role also be reflected in its building projects?

 

2.         Are the Higher Costs of Going Green Worth the Extra Cost in the Long Run?

Green projects usually involve more up-front costs compared to conventional construction, especially in the “soft” costs of design, engineering and energy modeling.  The savings realized through the operation of a green building once construction is completed, however, often significantly exceed the additional up-front costs.  The California Waste Management’s Board’s Sustainable Building Task Force studied the cost issue and found that a zero to 2% investment in sustainable design yields a 20% savings over a 20-year life of a green building.  Financial benefits include using less energy, water and in waste reduction, as well as the less-quantifiable but nevertheless real benefits of increased employee productivity and a healthier workplace.  (See http://www.calrecylce.ca.gov/greenbuilding/blueprint/2003.)

 

3.         Should the Building Be “Green Rated”?

 An owner may design and construct an environmentally sensitive and thoroughly sustainable building even if the building is not formally certified by one of the several organizations that have established rating systems, such as:

• U.S. Green Building Council, with its LEED® standards (http://www.usbgc.org)

• Green Building Initiative, with its Green Globes standard (http://www.greenglobes.com)
• Build It Green, with its Green Point-rated standard (http://www.builditgreeninitiative.org)
• Energy Star (http://www.energystar.gov)

 

• LEED® Ratings

The LEED® rating system may be the most well-recognized.  LEED stands for Leadership in Energy and Environmental Design.  The LEED® rating system examines the sustainability of the building during the design and construction phase, as well as during the life of the building.  Projects are certified based on national benchmarks for the design, construction and operation of green buildings.  LEED® rates buildings on a numerical system, with the highest possible point total of 110.  Points are granted on the following bases:

• Integrative Process (1 possible point)
• Location and Transportation (16 possible points)
• Sustainable Sites (10 possible points)
• Water Efficiency (11 possible points)
• Energy and Atmosphere (33 possible points)
• Materials and Resources (13 possible points)
• Indoor Environmental Quality (16 possible points)
• Innovation (6 possible points)
• Regional Priority Credits (4 possible points)
  
  Projects are certified on four levels, on the basis of point totals, as follows:
   
• Certified:  40-49 points
• Silver:  50-59 points
• Gold:  60-79 points
• Platinum:  80-110

 

• Green Globe Ratings

The Green Globe Rating system rates buildings on a 1000 point scale, that includes project management (50 points), site (115 points), energy (390 points), water (110 points), materials and resources (125 points), emissions (50 points) and indoor environment (160 points).  In order to be certified, a building must attain a minimum of 35 percent of applicable points from the 1000 possible points.  The percentage achieved determines the number of Green Globes conferred:

• One Green Globe is 35-54 percent of possible points;
• Two Green Globes is 55-69 percent of possible points;
• Three Green Globes is 70-84 percent of possible points;
• Four Green Globes is 85-100 percent of possible points.
   
• Building Without Formal Ratings

Often owners choose to build to LEED® or Green Globe standards, yet forgo the formal rating because of financial and time considerations.  Anyone building to such standards cannot use the LEED® or other Green Globe designation in marketing materials or to obtain incentives available from federal, state or local governments.

 

4.         Ensure that the Construction and Design Professionals Understand Green Building 

Any successful project involves experienced professionals.  Choose your team carefully based on their knowledge and past success with green buildings.

 

5.         Construction Contract Issues

• Make sure your “green-team” is experienced and knowledgeable.
• Pay attention to the construction contract.  It is essential for an owner to use the contract to shift risk to the contractor and design professionals.  The contract should clearly state each party’s obligations so that everyone has a common understanding of the goals and expectations of the project.
• Clearly identify the design specifications and performance specifications for the building.
• Contractually require the design professionals and contractor to follow green requirements necessary to achieve certain certification levels.
• Specify who is responsible and who is at risk for different types of green failure (for example, if the targeted energy and water savings are not met/if the building fails to achieve a certain level of green rating).
• Avoid liquidated damages provisions that generally limit the total damages an Owner is entitled to for breach of contract.
• Offer significant bonuses to contractors if certification is received by a specific time.
• Consider a design-build, design-build-operate-transfer, or turn-key project delivery method so the risk is shifted to the design professionals and contractors.

 

 As time goes on, we will see more green buildings.  The tide is already moving toward requiring new buildings to be more green.  Virtually all new buildings constructed by the federal government and the State of California must meet specific, minimum green building standards.  It is reasonable to predict that buildings will be required to be more energy and water efficient.  California’s Central Coast has been on the forefront of agricultural innovation for decades.  It can continue that leadership role by moving toward green buildings for its future remodel and construction projects.

This article is intended to address topics of general interest and should not be construed as legal advice.

 

© 2016 by Anne Secker, Noland, Hamerly, Etienne & Hoss