Green Construction Contract Checklist

By March 2, 2010 Blog, Real Estate Law

Implementing a sustainable, energy efficient construction project involves many considerations encompassing the full range of development activities: site selection, design, construction, operation, maintenance and demolition. Every owner must consider a wide variety of implications, including cost, availability of materials, schedule and quality. Among the first issues to be addressed is the content of
the design and construction contracts. What follows is a checklist of issues to consider when negotiating and drafting contracts with architects, contractors and others involved in the project.

1. Should a certified green professional be retained? A design professional who has obtained accreditation in green design and construction will be recognized as an “Accredited Professional.”

2. If a specified standard of construction is required, be sure it is specified clearly, and with reference to the revision date of the applicable standard. A number
of organizations offer certification standards and ratings, including the LEED Green Building Rating System, Living Building, Green Globes, Green Point Rated and the National Association of Home Builder’s Green Building Program.

3. Be aware of changes in the law, especially local ordinances, relating to the requirements for any element of green design and construction.

4. Plan for extra time, and potentially extra cost, for delivery of materials.

5. Incorporate any applicable “performance” standards for the project, such as energy savings, air and water quality, water usage and recycling.

6. Watch for exculpatory provisions and disclaimers of responsibility at every stage. For example, a particular material requirement may draw a disclaimer of liability from an architect or contractor, who might not have confidence in the product. This may lead to extended negotiations over indemnities
and damage waivers.

7. Watch for, or give thought to clauses that require a particular standard of care that might be higher than customary. Such clauses may trigger insurance exclusions, thereby negating coverage from professional liability insurance or complicate bonding.

8. Consider extending any payment retention until the required certification is obtained. In addition, require that all documents related to the green requirements are created, maintained and turned over as part of the certification.

9. Reexamine how the green requirements may impact standard construction clauses, including such matters as delay, indemnities, consequential damage waivers, change
orders, insurance and substitutions.

10. Implement job-site recycling/waste
management requirements, if not already contemplated by a particular standard that is applicable.

Some of the standard forms of design and construction contracts include provisions that promote consideration of sustainability issues, but typically those are general and not mandatory. As with any contract, the parties need to identify exactly what their expectations are and specifically provide for the accomplishment of those goals in the contract.

Stephen C. Gerrish, Real Estate Group