LEED and the Law

June 26, 2010

A coveted crest for marketing, LEED certification has been something that owners and developers freely crow about. But as lawsuits appear alleging that some certified buildings do not achieve the requisite environmental standards, it is clear that certification comes with some risks.

Last month the Wall Street Journal reported on a lawsuit by owners of Riverhouse One Rockefeller Park, a luxury condominium in New York City. The project was zealously marketed for its LEED Gold aspirations, but now the plaintiffs believe that the developers did not deliver the promised green environment. Two of their complaints: inefficient heating and air-infiltrating penetrations that are 49 percent larger than LEED standards allow. Ironically, the building was selected in 2007 as one of the year's top five green buildings in New York by gbNYC (greenbuildingsnyc.com).

Tax credits and other incentives for green construction up the ante. Owners as well as designers, contractors and suppliers may be required to prove that a project meets the standards on which incentives for design and/or performance were based.

A challenge, if not a lawsuit, was directed at USGBC itself by a group of citizens in Eagle River, WI, who believe that the town's Northland Pines High School, the first public high school to earn LEED Gold, does not meet the corresponding LEED standards. The challenge prompted a costly review of the project by USGBC and the architect before the school's Gold status was reaffirmed by USGBC.

Given that research shows that green buildings frequently trade at a premium, it follows that owners and occupants – and their lawyers – will take an interest in protecting their investment for reasons beyond mere marketing claims. A joint study released last year by real estate faculty members at Indiana University and the University of Arizona found that ENERGY STAR-certified buildings had higher market values (13.5 percent) and higher net incomes per square foot (5.9 percent).

As sustainability becomes an ever more mainstream proposition, the beavers will have plenty of work.

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