When sustainability standards for commercial buildings
were introduced in the mid-1990s, contractors were often expected
to provide guarantees that the property would receive certification
for the U.S. Green Building Council’s (USGBC) LEED
(Leadership in Energy and Environmental Design) or Energy Star. But
since professionals and owners lacked experience in meeting green
standards, if a building ended up not qualifying for certification,
it wasn’t always easy to see who was at fault.
Sustainable buildings are becoming more commonplace—the
USGBC certified its 10,000th project in mid-2011, and is currently
certifying an additional 1.6 million feet each day around the
world—so both owners and contractors understand the
certification process for new green construction much better than
they did even just a few years ago.
It’s easier to find language that holds contractors
accountable for following, say, LEED-compliant practices, without
making them liable for factors beyond their control, says Dan
Probst, chairman of energy and sustainability services for Jones
Lang LaSalle. He also finds owners and contractors more realistic
in their expectations. “Certain credits are easy to get and
some are not possible or not cost-effective,” he says.
“Then there are a few that are possible or probable, but not
certain. So we might not be certain of the outcome, but we know
exactly where the uncertainty factor is.”
However, when it comes to certain aspects of green
building—like implementing innovations, selecting green
products, retrofitting existing buildings and overall energy
performance—uncertainty remains, and therefore liability
continues to be a difficult issue, say industry experts.
“The concepts of green design are still so new that nobody
really knows what is expected of a design professional,” says
Jeff Cavignac, founder of Cavignac & Associates, a San
Diego-based independent commercial insurance broker that manages
risk and negotiates insurance on behalf of its clients.
Negligence occurs when the standard of care is not met, or when
the professional’s performance falls below what a standard
architect or engineer would do. But with green design, the standard
of care is a moving target, says Cavignac.
“It’s compounded by owners’
expectations,” he says. “Owners think getting a
certified building is something you pay for, and in fact it’s
determined by a third party [such as the USGBC determining LEED
compliance] who may or may not grant that designation. So if you,
as a design professional, guaranteed LEED Gold certification and
you got LEED Silver, you might not have been negligent, but
you’ve breached a contract and you’ve got a coverage
Cavignac says he started noticing contracts including guarantees
of green designations about five years ago. Although his firm has
not seen any standard of care claims involving green buildings, he
admits, “It’s a big deal in the risk-management
His advice is for both owners and designers to treat green
building contracts as critical, whether a design professional is
working toward green standards for the first time or has a lot of
experience in the achieving LEED or Energy Star standards.
“I wouldn’t guarantee or warrant anything,”
says Cavignac. “Research and document all the design choices.
Remember these are innovative technologies, so if the owner is
dead-set on one design component and the designer is not confident
that it will work, you’d better document that:
‘We’ve recommended A. You’ve selected B.
We’ve agreed to select B, but here are our
Dan Null, vice president of sustainability services at WSP +
Flack, a New York City-based international engineering firm,
agrees. He says he’s seen owners veer from their goals
because their budget changes or they simply decide they don’t
like the look of a sustainable feature and switch to a standard
one, which loses certification points. “In truth, achieving
the desired rating goal is in fact the result of a partnership
between the owner, the design consultants, the contractors, the
constructors,” he says.
And Null says if he received a contract saying he was to
guarantee the achievement of a certain level of LEED,
“I’d have to mark that contract up and say,
‘Okay, Mr. Owner, that’s fine—if you will
guarantee to agree with every proposal I make with respect to
what’s necessary for the achievement of this rating. If you
turn down anything, guess what? My guarantee goes
Innovations create the most obvious gray area for green design,
says Jeff Slivka, executive vice president at the Philadelphia
office of New Day Underwriting Managers LLC. “Look at water
walls and vegetative roofing systems and domed roofs,” he
says. “They wouldn’t have been contemplated in the past
with traditional construction. Probably in 10 to 15 years we
won’t call this sustainable or green design and
construction—it’ll be standard. But right now it brings
Sure, says Slivka, errors can and do occur on standard buildings
but green designs are often characterized by intricacies that
didn’t come with traditional construction.
First, many green products, including HVAC equipment and
electrical and plumbing fixtures, are so new they’re
untested. “Sometimes they’re being applied in a
different manner to produce a more efficient effect, but we just
don’t have the track record to test for true effects the way
we do in traditional construction,” says Slivka.
Retrofitting an existing structure brings its own particular set
of liability issues. For instance, LEED certification requires the
use of at least 60 percent of recycled materials—whether
concrete, steel and wood—all of which must be tested for
contamination. And a traditionally built structure sometimes needs
additional support to handle the load of, say, solar panels or a
wind turbine on the roof, both of which increase wind load and the
change of leakage.
Put simply, that puts items on a roof that wouldn’t
otherwise be there says Ruben Alspector, senior vice president of
the NIA Group, commercial real estate brokers covering greater New
York City area. In his experience, he says, vegetative roofs, which
are a green feature often added to existing buildings, tend to
overbuilt to handle the load, but that’s not always the case.
“We heard about a pretty spectacular roof collapsing,”
And, says Slivka, sometimes adding new technology to an old
building doesn’t always work out as planned. At an existing
Texas hospital that attained LEED Platinum certification, for
instance, a ventilation system stopped removing humidity, creating
a moisture buildup on the windows and mold issues that mandated the
system’s redesign and reinstallation.
The biggest problem, however, with achieving a green rating
often comes after a building is completed and up-and-running. When
a green building is brought online, the process of certification
ends and commissioning—or monitoring a building’s
systems—begins. If the building’s commissioning report
shows a drop in efficiency six months after its opening, that might
be an operator’s error rather than the fault of the
contractors, says Alspector.
According to Null, the latest version of LEED has a provision
stating that a building’s energy performance must remain at
the level for which the building was certified. However, he says,
both building owners and designers have to be realistic about the
assumptions made for the energy modeling effort with respect to the
“I have one building that’s using significantly more
energy than our LEED estimate said,” says Null. “But on
the other hand, I go out there and see that what was meant to be a
storage closet is stacked with about 47 servers and they’ve
installed an additional air conditioning unit to handle
And building owners shouldn’t expect to maintain an
energy-efficiency rating if their tenants end up coming to work on
Saturdays as well as during the week, or leave their computers and
lights on overnight and on weekends, adds Alspector.
But even if a building’s occupants and their equipment
remain as estimated, weather can change everything.
“We can use energy modeling and experience to predict what
the impact of a retrofit will be with a high degree of
accuracy,” says Probst. “Changes in occupancy, weather
and building operating practices will have an impact that can be
predicted by the model, but may cause deviations from the expected
Probst says he likes Energy Star’s benchmarking system
because it “normalizes” energy usage numbers for
buildings by taking into account weather and temperature
variations. The model also tracks the number of occupants in a
building on an annual basis. “A contract that makes a service
provider accountable for energy reduction would have to take these
kinds of things into account,” he says.
He also recommends using ESCOs—energy service
companies—because they guarantee their work, install the
products and continue to manage the building.
Ultimately, says Null, nobody wants to be too much of a pioneer
when it comes to green building innovations. “The good and
the bad about innovation is that you’re essentially talking
about something people haven’t done before,” he says.
“As an advocate [of sustainability] you generally tend to
have an optimistic attitude toward doing new and different
things—‘it’s going to be so much better than
what’s been done before.’ But you always need to
question what’s the worst that could happen, who could screw
On the other hand, Null adds, green building industry experts
often tend to talk about their field in a negative fashion, and
“one of the risks of doing something new is that you might
not maximize its potential.” As he discovered recently while
installing a heat pump system to utilize a lake to heat a building
in Georgia, “It might actually be more effective than you
thought it was.”