Sustainable projects present a plethora of unique issues which must be addressed by an attorney prior to and during construction of the building in order to minimize the potential for future litigation.While design professionals carry insurance it is paramount to consider whether the insurance carried by the design professional is adequate in light of the sustainable nature of this project. Sustainable design is different from the traditional design that many professionals such as engineers and architects engage in and is also in its infancy therefore, giving rise to a greater probability that there could be problems inherent in the design for which the owner may wish to sue the design professional. Likewise, it is important to evaluate the warranty and guarantee language of the products and materials being utilized in the construction to ensure that green construction procedures and installation techniques do not void the warranty for a product. Closely related to the warranty and guarantee issue is the potential for intellectual property infringement or the need to protect intellectual property. Sustainable building is still in its infancy and new techniques and methods to achieve LEED credits are being still being developed. The owner, general contractor, and architect must be aware of the potential for intellectual property infringement by utilizing techniques pioneered by others as well as aware of the need to protect innovative strategies or methods that might be developed during the construction of their building. Clients need to be advised of the importance of contractually defining who is responsible for infringements of other’s rights as well as who will own the intellectual property rights to any techniques developed during this project. Sustainable buildings have both short term performance goals, such as obtaining certification as well as longer term performance goals such as reduced energy use or the use of energy from renewable resources. The performance goals of a sustainable building must be discussed with the client and if necessary contracts must be drafted to ensure these long term performance goals are met by tenants and other parties. It is important that the client realizes that in constructing a green building, obtaining LEED certification is just one small step and that without the proper education and operation guidelines and contracts in place the true energy savings will not be achieved. The owner must also consider whether traditional insurance will be adequate to compensate them and permit them to rebuild to LEED standards in the case of a loss, or whether they should obtain an insurance policy which specifically addresses the sustainable nature of the building and provides adequate funds to rebuild a LEED building in the event of a loss.
Back in the era of AOL and dial-up, Web sites were a much different breed from what we see today. Sites served a different, simpler function. Limited by technology, most company sites were online business cards, a way for those savvy enough to be online to find your phone number and ultimately call you for more information.
This simple function inspired a rash of Web sites that seem to exist only to exist. There was no goal in creating the site, no consideration of how it may integrate with other marketing efforts. And make no mistake, a Web site is your most important marketing tool.
Today, Web sites have evolved into a variety of functions. Some sell product. Some sell service. Some are technological exhibitions whose purpose is driven more by aesthetics than function. A good deal of architectural firm Web sites fall into this category. Many are Flash driven and thus sacrifice benefits such as search engine rankings. Technologies such as Flash are great for showing off products or projects, but, in most cases, shouldn’t dominate an entire site’s structure.
Seth Godin wrote an insightful post about the difference between Web site form and function in which he asks, “Do you want the people visiting this site to notice it?”
In the construction industry, the answer varies.
Architects are viewed as the creative, artistic group in the industry. I would expect action scripting or flash-based sections from an architectural firm’s site. An firm’s site should be an online extension of their offline creativity and using technology will help us notice your vision. But it’s easy to get carried away with bells and whistles and negatively impact the usability or marketability of a site.
On the other hand, a manufacturer may not need to be as fancy. Most visitors come to your site knowing what they want. Whether it’s downloadable specs or simple product information, streamlined function trumps extravagant presentation. By making it as easy as possible for visitors to find the information they are searching for, you have to essentially make your site less noticeable and free of distractions.
Ultimately, a site’s design should be focused around it’s purpose. Is a site only an online brochure or is it an evolving marketing effort? Find the purpose of a Web site, then starting thinking about design.
Today it is my great pleasure to present a guest post by Mark Rabkin of Althans Insurance Agency. Mark can be found on twitter @MeRabkin and is a very valuable resource to all involved in the construction world when it comes to insurance.
When a large, publicly funded construction project is sent out to bid, each contractor that is vying for a piece of the pie must submit a bid and performance bond in conjunction with their application. The bid and performance bond is underwritten by a surety company and provides a financial guarantee to the owner of the project that the contractor will comply with the terms of the construction contract. Should a contractor fail to perform, the surety company will either pay the current contractor to complete the project or hire another contractor to either fix the errors caused by the first or complete the job if the original contractor becomes insolvent. The surety company will then pursue the original contractor to collect on the defaulted amount.
As indicated above, a surety bond is meant to guarantee the performance of a contractor as per the construction contract. The surety underwriters evaluate a “risk” based on their financial position, overall industry expertise including managerial experience and familiarity with the construction methods upon which they are bidding. It is important to note that the most critical component of a final bond is the actual contract that is entered into between the various parties involved. Should the contract contain language that is onerous to either party, a surety will either refuse to bond the contract or seek to have that specific language excluded or stricken from the contract. For example, extended warranty periods or usurious liquidated damages clauses are significant red flags to surety underwriters and legal departments.
Building projects that are registered for certification by an independent third party such as the US Green Building Council are rapidly growing in number. Many federal, state and municipal entities now either require or encourage new construction, major renovation or leased space to demonstrate some level of environmental stewardship throughout the construction process or energy efficiency within the subsequent operation of the facility. There has been much debate within risk management circles regarding the possibility that a project could fail to either achieve certification or attain a specified level of achievement. These situations could result in lost revenue opportunities for the loss of tenants, lost tax incentives, utility expenses higher than promised or any other failure to achieve an expected benefit of the proposed project. To protect themselves, project owners will look to transfer the risk to the design team or construction contractors and subcontractors. It should be noted that most if not all sureties will refuse to bond a contract that contains language that guarantees certification by a third party entity such as the US GBC or seeks to guarantee a specific level of energy efficiency.
Traditional general liability insurance defends and protects contractors for bodily injuries or property damage caused by the insured party’s negligence. It does not provide for defense or indemnification for claims due to breach of contract. Should a third party claim financial injury due to the negligence of a contractor, professional liability coverage (also called errors and omissions) could respond. This coverage is available in the market for construction companies and is increasingly necessary as more contractors are obtaining accreditation as “specialists” upon successfully earning their LEED-AP designations.
Mark E. Rabkin is a triple bottom line risk manager for Althans Insurance Agency in Cleveland, Ohio. He counsels clients on the risks faced everyday that impact his client’s financial, social and environmental exposures.
KCast Player
Vik Duggal sits down with residential real estate broker extraordinaire Nick Nolf in Las Vegas to get deep into the residential real estate world. Vik asks Nick some tough questions and gets the Konstructr Nation an inside look into what’s happening. Amazing interview!
Question from today’s KCast:
What do you think about the current residential real estate market?
Links from today’s KCast:
Nick Nolf
Nick’s on Konstructr
Nick’s on Twitter
Nick’s Posterous
Just wanted to let you know about a webinar coming up on April 24th at 6 am EST (why?!?) titled, “The Ten Signs of Greenwash (and how to avoid them).” It will be presented by Ed Gillespie, Creative Director and Co-Founder of Futerra.
The webinar is hosted by BrightTalk as a part of their Green Week. I’ve attended a bunch of webinars through BrightTalk and many are hit or miss, so you may not want to wake up for a 6 am webinar. Most webinars seem to be recorded and posted, so you’ll probably have the opportunity to view it at your convenience.
So I had planned to cover another topic today, but then this just came up in my Twitter stream– 98% of Green Labeled Products are Actually Greenwashed. Treehugger, who published the tweet linking to a post on their site, can be a little over the top sometimes, but here they are just citing a study by TerraChoice Environmental Marketing.
TerraChoice has its own green product standard, EcoLogo. My questions is, as “North America’s largest, most respected environmental standard and certification mark,” is EcoLogo responsible for any of that 98%?
Greenwashing is prevalent, sure, but to say 98% of all green labels are greenwashed seems a bit on the high side. If this data is accurate, then what’s the solution?
What do you think?
Today I am starting a new blog series which will focus on major developments in the sustainable design and construction world that occur each week. Please feel free to either send me email or send me a message on twitter @richcartlidge with any developments you feel are worthy of a mention.
This is just a brief summary of recent developments in the sustainable development and construction world. If you find this interesting please let me know and I will make sure to continue to compile interesting stories throughout the week.
We live in a wonderful world! However, one needs to wonder what will the world look like for future generations if we don’t take action to change it for the better? The passion I have for sustainable building, design, and renewable energy powers me through each day and encourages me to crush it! However, I have realized that this passion is worthless unless it helps to educate others, share information, and inspire individuals to do whatever it is they can to spread the message. Today as part of the construction update presented by Konstructr one of the speakers said that green should not be an add on to a project but should be the project. That is precisely the message that needs to be spread! Green is not an add on benefit, a premium option, or a special feature that should be added to a building, every building we build should be sustainable, efficient, and capable of lasting for thousands of years. The word green needs to vanish from our vocabulary and each one of us needs to do whatever we can no matter how small to spread the word that sustainability is not just viable but necessary. Let us use the collective power of the Konstructr network to spread the word, educate others, and facilitate the flow of information that will ensure the world we leave behind for future generations is a bright one indeed!
If you are involved in the design or construction of a green building there are a plethora of legal issues which you should be considering. The best known issue is how to define who is responsible for achieving certification if the building is pursuing LEED certification. Traditional contract documents such as the AIA forms do not adequately address the nuances of green design and construction, a problem which was partially brought to light in the Shaw case as discussed by Stephen Del Percio. It is important that as a designer or contractor you seek legal counsel regarding the potential litigation that can arise if a building does not achieve certification. As Chris Cheatham has explained at GBLU there are currently no available mechanisms to ensure certification. In addition to the issue of certification the following issues should also be addressed:
- Does the design professional have adequate insurance coverage considering the green nature of the project?
- Will product warranties and guarantees be voided by green construction procedures or installation methods?
- How will long term performance goals be delegated amongst future building occupants?
- Are there intellectual property infringements from copying installation methods or designs from other green buildings?
- What is the availability of green building materials and their cost of replacement? Will a traditional insurance product cover the rebuilding to green standards if a loss occurs?