Construction Law

Risks in LEED design

By Werner Sabo

There is an interesting discussion of some issues and risks to design professionals involving LEED projects at http://www.consilienceblog.org/. Here is a quote:

Lenders should review the owner-architect agreement and construction contract to make sure the responsibilities in planning and constructing the green building are clearly detailed. They will also want to make sure that there are penalties to the appropriate parties for failure to deliver the required green building. These penalties should correspond with the leases. For instance, if a lease requires a LEED Silver Commercial Interiors space and failure to provide such space will result in a two-month free rental period, the construction contract and owner-architect agreement should contain provisions that requires either a holdback or penalty in the amount of the loss of two months of rental payments to landlord, provided the failure to achieve the standard is not the fault of the property owner. The landlord may not be able to make the mortgage payments without such a provision, and the lender will obviously want to protect itself from such a possibility.

Architects often underestimate the risks associated with LEED projects. Having a knowledgeable attorney involved in the contract negotiations can be very helpful.

Full post as published by Construction Attorney Blog on May 13, 2009 (boomark / email).