With the number of sustainably designed buildings rising, architects are not only dealing with new design and energy issues but also the potential legal ramifications. Green design raises questions about legal liability and risk management for projects big and small—and architects, engineers, construction companies, and owners are working with lawyers to create a framework for assigning responsibility and contractual obligations. This is uncharted territory, says Stephen Del Percio, 33, a New York–based lawyer for the global engineering-services firm URS Corp., who suggests “keeping your eyes wide open” when negotiating contracts. Del Percio, who tracks green legal issues at the Green Real Estate Law Journal (greenrealestatelaw.com), spoke with about what architects should keep in mind concerning the evolving field of green law.
Take risk seriously.
Many observers predicted an explosion in litigation related to sustainable design. It hasn’t happened yet. “The sky-is-falling scenario was probably overstated, which is a good thing,” Del Percio says. One reason is the downturn in the economy, the decline in architectural billings, and the credit crunch, which made it hard to start new building projects. “But I also think people are taking risk management for green projects more seriously. They are dealing with the risk related to sustainable design in a proactive way before they get involved over their heads.”
That said, there are certainly more legal cases related to LEED certifications and green-building projects than there were a few years ago, including cases challenging energy-efficiency codes. But whether that’s due to more LEED-certified buildings or the mood for litigation more broadly in the design and construction industry isn’t clear to Del Percio. “As long as there is a design and construction industry, there will be lawsuits,” he says.
There are two separate lines of risk to think about. One is project specific: the risk apportioned and allocated between an owner, who expects delivery of a project within certain parameters, and the designer and contractors. Then there is the regulatory environment. That’s when the local, state, or federal government enacts a law related to sustainable design that requires architects and owners to comply. It could be related to LEED or perhaps Energy Star ratings. “This poses a challenge to the industry, and it’s where most of the legal activity is taking place,” Del Percio says.
“LEED doesn’t have legal power, nor is it a building code without some enabling mechanism like a statute, a resolution, or a contract,” he says. LEED is a tool to help transform the market—to set the bar for the top of the market. So complaints about LEED itself should go to the U.S. Green Building Council or the Green Building Certification Institute. An architect who promises LEED Gold but doesn’t quite deliver could appeal to these organizations, which handle these issues internally. And the USGBC will arbitrate disputes over LEED certifications for projects, helping the parties involved find a resolution. “There is a good mechanism in place to fix that,” Del Percio says.
There are very few standard contracts tailored specifically for green-building projects. But industry organizations, including the AIA, have a good scope of work documents that can be used as a model to start the conversation. The Design-Build Institute of America has a green projects document—one good way to start thinking about risk allocation, though it has to be adapted for each project. Any such contract should define “green” as specifically as possible, because it can mean something different in midtown Manhattan than it does in downtown Phoenix. A primary consideration is to match expectations in the contract, which is why LEED and energy-efficiency goals should be clearly spelled out. “These are important weapons in your arsenal,” Del Percio says.
The future isn’t written.
Anything could happen in this field. A designer might be sued for breach of contract or for negligence for failing to do what was promised. There could be a statutory cause of action because a local ordinance required an owner to satisfy a LEED or similar requirement and this didn’t happen. Damages could be assessed against the designer or the contractor. “The bad news is that this could become a Pandora’s box,” he says. “The good news is that it hasn’t happened yet.”
But all projects are risky. Some are just more risky than others. Adding sustainability considerations can add a level of complexity, and that risk is evolving along with the field—but that risk is manageable. There are good risk-management tools in construction law, and the law is now clearer on sustainable design. “I’m not cheering on a full-steam-ahead approach without thinking things through,” Del Percio says. “But sustainability should not be a no-go situation.”