Thursday, July 30, 2009

Water Efficiency in Green Buildings

This is a good informative post about the importance of water efficiency in green buildings. It talks about the benefits to owners and occupants when water use, the costs of heating water and treating waste are reduced.

Tuesday, July 28, 2009

The Risks of Green Roofing

There is so much going on in green construction right now that it is easy to get so caught up in the hoopla that we don't think things through. That is why I really like this post by Stephen Del Percio.

He reminds us that we shouldn't just assume that a "green" development or trend is necessarily a good choice or the thing to do.

http://www.greenrealestatelaw.com/2009/07/risks-of-green-roofs-case-study/

If it weren't for people like Chris Cheatham, Rich Cartilidge, Shari Shapiro, Christopher Hill or Stephen Del Percio, I would not be able to keep up with all of the issues arising in green construction. I would like to thank all of them for keeping me so well-informed. Their blogs are all excellent.

Managing Risk in Construction

The following blog post, although brief, highlights how important it is to plan for possible problems that can occur in the construction business and how to prevent them:


Dare I say, but it is so true! "An ounce of prevention is worth a pound of cure."

I understand business is tight right now. I know the last thing a business owner wants to do is spend money. However, the time to get your business in shape is now, when you are not busy. Make a list of your top twenty referral sources and see how they are doing. Review your insurance policies and make sure they are up to date and provide you with adequate coverage (even we lawyers hate doing that).

When was the last time you updated your contract? Is it still in compliance with your state's laws? What if someone gets hurt on your job? If you have a homestead act in your state, you should file a homestead to protect your family's home.

Are your incorporation filings up to date? In some states a plaintiff could "pierce the corporate veil" if you do not follow corporate formalities and hold you individually liable.

Do you hold all of the necessary licenses and registrations for your area of construction? Massachusetts had a new edition of the building code go into effect, and there are now areas that require additional licensing (roofing and siding for example).

Do you have an employee handbook and work policies? Are you paying independent contractors who would now be considered employees under MA law?

In addition, now is the time to learn more about developments in green construction, energy and aging in place.

Money and time spent now for risk prevention will more than pay off if a dispute arises or an accident occurs. Pay me less, but pay me now.

Thursday, July 23, 2009

Ten Common Mistakes When Recording Mechanic's Liens

http://www.constructionlawnews.com/BlogEntry.aspx?_entry=828353a0-931d-4628-a858-0378b5f63284&RSS=true

This post is quite informative but not completely accurate for Massachusetts. It is quite dangerous to wait until the last minute to file a lien, as the article says, because a mistake in filing can be fatal.

In MA, unlicensed contractors can file liens. They just have to have a written contract with the GC or owner.

Suit has to be filed within 90 days after the filing of the lien, and an attested copy of the complaint has to be filed at the registry of deeds within 30 days after filing suit.

I have never heard of a lien being invalidated because the amount owed was "too high."

In any event, this is a good article with important information, particularly with regard to the ownership of the property.

Report by Remodeling Magazine on Current Trends in the Market

http://www.remodeling.hw.net/lira/lira-still-trending-down-but-is-the-bottom-near.aspx

The report says that "phones are ringing more," but the jobs are smaller. Hopefully things are looking up!

Friday, July 17, 2009

How To Get Paid as a Contractor or Construction Company

http://www.entrepreneur.com/magazine/entrepreneur/2009/july/202254.html

This is a great article from Entrepreneur Magazine about how to get paid. Particularly in this economy, I think this is one of the biggest issues my clients are facing. One of the major mistakes that I see clients make is their failure to bill on a regular basis. Do not wait until the end of a project to hit a client with a major bill!

First of all, there should be a clear payment schedule in every construction contract.

Second, there should be a penalty for overdue payments.

Every contractor or construction company should include a clause that entitles them to attorney's fees if they have to engage legal help to pursue payments.

The article does not warn about businesses who are trying to collect from consumers. They have to be careful not to violate federal and state debt collection laws.

Make sure that ALL change orders are in writing and clearly spell out how they affect the price and completion schedule.

Subcontractors should avoid "pay when paid clauses."

I could go on, but it's late. Follow these practices and you are more likely to get paid!

Thursday, July 16, 2009

Green Roofs-Are They a Fire Hazard?

This is a thoughtful post from Rich Cartlidge's blog: Green Building and Environmental Trends

The Roof is on Fire! Potential Risks of Green Roofs



I don't know how Rich stays up on the most current issues in green construction, but he does. He also mentions Shari Shapiro and Chris Cheatham, to LEED-AP attorneys with excellent green construction blogs of their own. Part of what makes this interesting is the recent requirement in Toronto for green roofing: http://greeninc.blogs.nytimes.com/2009/04/16/toronto-mulls-mandatory-green-roofs/.

Tuesday, July 14, 2009

Green Building and Environmental Trends-Decertification

Green Leases: How to avoid the devastating consequences of decertification

This past week Chris Cheatham of GBLU wrote an excellent blog post discussing LEED v.3.0 and the potential for a LEED certified building to be decertified. After reading the post and pondering the implicatitons for landlords and building owners one thing is abundantly clear to me, attorneys must advise owners of LEED certified buildings to begin using green leases. An article from 2006 by EDC Magazine states that the following ten requirements must be included in any green lease.

1. Gross lease format with appropriate escalation clause and expense stop clause to reward landlord for operating a high-performance building.

2. Appropriate operational procedures and building control/management systems for charging tenants for after hours/excess energy usage, supported by appropriate lease language.

3. A comprehensive and equitable definition of building operating costs in the lease to protect the interest of both the landlord and tenant.

4. As part of the definition of building operating costs, the lease should contain language that allows the landlord to amortize the cost of projects that will reduce operating costs and treat those amortization costs as operating costs, as long as they do not exceed savings.

5. Right to Audit – This lease clause protects the tenant from overcharges and defines the audit process to protect the landlord from frivolous audits.

6. Hazardous Materials – A clause that defines what it is and that neither the landlord or any tenant violates laws or regulations regarding the hazardous materials.

7. Green Cleaning Specifications – This lease exhibit should define the materials, procedures and protocols for cleaning the building in a sustainable manner.

8. Building Rules and Regulations – This lease exhibit stipulates a building-wide recycling program.

9. Tenant Construction Agreement – This lease exhibit defines sustainable product requirements and construction practices.

10. Tenant Manual & Development Guidelines – A guide to explain the building’s sustainable features and benefits, procedures and operating parameters, that should provide insights into how to maximize the building’s features to create a sustainable workplace.

With the new potential for a building to lose its status as LEED certified if it fails to properly perform a green lease is more important than ever. There are reports in existence which state that LEED buildings actually use more energy than their non-certified counterparts, this increased energy use is more likely than not due to improper use of the building by the occupants rather than faulty design. Real estate attorneys, construction attorneys, real estate brokers, and landlords need to take measures on the front end to ensure that tenants placed in LEED certified buildings understand the energy saving measures that are put in place, what requirements must be adhered to for the building to remain LEED certified, and the consequences for failing to adhere to these standards. Tradititonal commercial leases are simply put not properly drafted to deal with the unique challenges that green buildings can present and as such we must all learn how to properly address the potential liability by learning to draft effective green leases

From Shari Shapiro's Green Building Law Blog

How Is The USGBC like Google?

Over the past couple of weeks, the USGBC announced that it was incorporating energy and water usage reporting requirements as a precondition for acheiving LEED v3 andGoogle announced that it will debut a cloud-based operating system some time in the next 18 months. The answer to how these two entities are similar is simple: both entities announced good ideas perhaps before their time.

Let's take a closer look at the reporting requirements for LEEDv3. Projects can comply with the performance requirement in one of three ways:

1. The building is recertified on a two-year cycle using LEED for Existing Buildings: Operations & Maintenance.
2. The building provides energy and water usage data on an on-going basis annually.
3. The building owner signs a release that authorizes USGBC to access the building’s energy and water usage data directly from the building’s utility provider.

Currently, accessing energy and water usage data can be very difficult, particularly without submetering. In addition, I would expect that public utilities would be loathe to turn over water and energy usage data to a third party. Finally, the turnover of operations in buildings from owner to management company and in some cases to the tenants will create layers of reporting and data gathering issues which are intense. For example, a building is submetered to tenants. What if one tenant chooses to report, and another does not?

The reporting issues go beyond the merely logistical. Ongoing reporting and monitoring by the USGBC will create a new body of work for an institution which has already come under fire due to backlogs in certification. Not only will the USGBC's new certifying sister agency have to certify new projects, but monitor old ones ad infinitim. It will create additional issues for states and municipalities which have incorporated LEED standards into their green building regulations and incentives. What happens to a 10 year property tax abatement if the project loses its LEED certification after 2 years due to failed energy savings? Additionally, as Chris Cheatham points out, there are new legal liability issues which emerge, like risks of suit to architects and engineers.

All this is not to say that the USGBC should not incorporate ongoing energy reporting into the LEED process. Like Chrome OS, the idea is a good one. I believe that a green building that does not perform should not be allowed to continue to benefit from the LEED moniker. There are a few things which could make it work better:

1. Create differrent levels of certification as time elapses--LEED at construction, different from LEED at 5 [years] or LEED at 10 [years], which reflects the ongoing achievement of green goals. This eliminates the issue of "decertification", while providing ongoing incentive to report and maintain buildings to the LEED standard.

2. Phase it in--This ensures that the reporting requirements can be complied with, and allows utilities and others to come to grips with the concept of releasing to third parties energy data. As it stands, projects registering for certification now must comply.

How can you envision the reporting requirements working more effectively?

Monday, July 13, 2009

The Latest Information on Home Sales

Homebuyers Need To Nail Best Offer Price

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Bargains abound in today's real estate market, and buyers rule -- but not necessarily lowball offers.

Real estate agents say steep price declines are driving a selling process now more like 2005's boom market than a bust. Priced-right properties at the lower end of the market get multiple offers and sell in days.

So buyers must formulate offers that stand out. That means offering the right amount, sometimes above asking price. And it means getting pre-approved for a loan and not making nit-picky requests of the seller.

The steep decline in home values is fueling the clamor. Prices fell 18.1% from April 2008 to April 2009, according to S&P/Case-Shiller's latest report, covering 20 major U.S. cities. That index is off roughly 33% from its peak in Q2 2006. In Phoenix and Las Vegas, prices have plunged more than 50%.

Climate Changing

However, April marked the third straight month that the decline wasn't a record -- a small glimmer of hope for those who want to believe the market is improving. Whether one believes the market is nearing the bottom or not, multiple offers are commonplace on modest properties, says Brock Harris, a broker with Silver Lake Real Estate in Los Angeles.

"If it's a bank-owned property, you need to go over asking price," he said. "We're talking 10 to 20 offers. It's like the old days."

Harris says agents selling these properties are pricing them aggressively -- a change from last year. Now, he says, agents selling them are rated by the selling banks on "how quickly they can sell homes."

Lowballing an offer can be a big mistake on real estate owned by banks, or REOs, Harris says.

"REO agents tend to be a heartless and careless bunch ... there's not a lot of room for negotiation," he said.

So how do house-hunters come up with the right offer? A top-notch buyer's agent willing to do research is a necessity, real estate agents say.

Elizabeth Weintraub, a longtime Realtor at Lyon Real Estate in Sacramento, Calif., turns to the Internet, themultiple listings service and public records to dig up comparable prices and research sellers.

Research Pays Off

On a recent sale, Weintraub found out a seller was a home flipper with 37 properties. She discovered that he has sold 9 properties so far, for an average of just 2% under asking price. So he's pricing them well. Thus she had her buyer make a first offer 5% under asking.

She also knew from the seller's agent that there was another offer coming in. So she made sure that her buyer didn't confuse the offer by asking for a lot of seller concessions -- the home had been remodeled but a couple of fixes were still needed. The seller countered her offer, not the other party's, and the buyer agreed to the counter -- at the seller's classic 2% under asking price.

Weintraub says she also sells bank-owned properties and has seen buyers' agents make some lame moves. On her worsts list are agents who: don't call the selling agent to see what they can find out, submit fake comparable sales, submit lowball offers with a low deposit, or submit opening offers seeking too many concessions.

Preparing A Bid

Buyers need to review comparable sales, no more than two months old, when trying to formulate an offer price, agents say. And comparables should be equivalent homes in the same neighborhood or very nearby.

Agents say in this era of tight mortgage lending, a buyer must supply a pre-approval letter with an offer. It should show the buyer's pre-approved for the asking price of the home. A pre-qualification letter isn't good enough, says Patricia Broghamer, an agent with Re/Max Advantage Realty in Charleston, S.C.

The letter needs to be from a well-known lender on bank letterhead, says Broghamer. And it should be dated on the day of the offer -- stale, generic letters won't cut it.

Janet Hildebrandt, a Realtor with The Tonnesen Team, Prudential Americana in Henderson, Nev., says some banks selling foreclosures are even asking buyers to submit "a pre-approval from a specific lender." The buyer doesn't have to use that lender for financing, but the selling bank wants the letter so it has confidence in the buyer's ability to close the deal, she says.

On hot properties, buyers must be willing to put an offer in within a day or two of the home coming on the market.

Sale Stallers

Collections agencies and homeowners associations can hang up deals, Hildebrandt says. HOAs hire collections agencies to go after delinquent HOA dues from defaulting homeowners.

"These collection agencies have no rules, no regulations," Hildebrandt said. She says she's been waiting 30 days for demands from one collections agency on a home in escrow.

In what market category are prices still coming down, fueling below-list offers? Million-dollar and multimillion-dollar homes. Jumbo financing is still hard to come by, agents report, and the tough economy is hitting the luxury-home market hard.

In Isle of Palms, a tony vacation home area of South Carolina, luxury home prices have fallen 50% from their peak in 2005, Broghamer says. And sales still go at steep discounts from list prices -- two luxury homes that sold in May and June went for 21% and 24% below their asking prices. Broghamer says many investors are buying such homes.

Green Building Disputes Prompt Lawsuits-from environmentalleader.com

Green Building Disputes Prompt Lawsuits

usgbclogoLawsuits and claims are emerging as businesses embrace “green” building and other sustainable processes, says Harvey Berman, a partner at the law firm of Bodman LLP, in an article for the Ann Arbor Business Review.

Berman said the first reported lawsuit involving a green building is believed to be a case filed in Maryland by a contractor against a developer. The developer alleged that the contract which included the project manual and specifications required that the contractor construct an environmentally sound “green building” in conformance with a Silver Certification Level according to U.S. Green Building Council’s Leadership in Energy & Environmental Design (LEED) Rating System, said Berman.

The contract documents attached to the developer’s counterclaim contained no provisions limiting the contractor’s liability relating to any “green building” aspects of the project, did not discuss the role of the developer or the design/construction team regarding the LEED certification and did not discuss the LEED process or the effect of a project delay on the attainment of tax credit but the contract did contain a construction time limit of 336 days.

Since most green building standards involve some type of incentive for building green, there is an inherent potential liability for design professionals and contractors if an owner does not achieve the required “green” certification, warned Berman.

The second reported lawsuit involves the City of Albuquerque, N.M.’s enactment of a new green building law including an Energy Conservation Code and a High Performance Buildings Ordinance.

This lawsuit, which is still ongoing, alleges that a federal law, Energy Policy and Conservation Act of 1975, preempts the city’s new green building law. The plaintiffs claimed that the increased requirements of the new Albuquerque green law would prohibit them from selling or installing residential or commercial HVAC products and water heaters for use in the city that do not meet the requirements of the new law, said Berman.

Berman’s lessons learned: Parties involved in a green building project should carefully review their contracts for potential liability arising from green certification requirements, and municipalities adopting green building laws should take special care to avoid laws that violate or conflict with other existing or superseding laws.

The rise of carbon offset companies is also resulting in some misrepresentation. In some cases, carbon offset companies are double or even triple counting carbon credits and offsets, according to the Coyote Blog.

One example cited is My Emissions Exchange. Here, the carbon credits are equal to a one-ton reduction in carbon emission, and are currently trading between $10 and $25, according to the site, said the blog. The blogger says the exchange makes no differentiation for how one’s power is generated, which translates into “soft” savings as real credits to be paid for.

Tuesday, July 07, 2009

Eligibility Requirements for the LEED Green Associate Exam from Green Building Education and Training

What are the eligibility requirements for the LEED Green Associate exam?

http://www.green-buildings.com/content/78626-what-are-eligibility-requirements-leed-green-associate-exam

After March 31st, 2009, candidates for the LEED Green Associate (GA) credentials must fulfill eligibility requirements.

LEED Green Associate candidates are required to do ONE (1) of the following:

Option 1: You must be (or have previously been) employed in a sustainable field of work

This is perhaps one of the more nebulous requirements posed by the GBCI, because no definition of a "sustainable field of work" is given. The USGBC does state that the company needs to "relate to environmentalism or the green building industry". If you are in any doubt that your profession would qualify, contact the GBCI at gbci.org or by calling 1-800-795-1746.

Option 2: You must be (or have been) involved in a LEED Certification Project

To prove eligibility by way of LEED project involvement, you must have been involved in the certification process of a LEED registered project. This means that your name must be on the registry of a specific LEED project that has already taken place, or which is currently in progress. Note: the building does not have to have earned its LEED rating yet, it just has to be registered with the GBCI. This can sometimes be difficult to achieve, as many organizations prefer to have existing LEED APs take care of the certification process, but as there is no requirement for a person working on a LEED project to be a LEED AP, it is possible to be added to a project.

If taking part in a LEED project led by your place of business isn't an option, we are able to help. We offer a Green Professional Training Program, in which you can take part in an actual LEED certification process over the course of a few months, and when all is said and done, your name will be listed on the LEED project, making you eligible for not only the Green Associate exam, but for future LEED AP exams as well. Please contact us for details.

Option 3: You must show involvement in an education program that addresses green building principles.

This is perhaps the most straightforward of the three eligibility options for the Green Associate exam: You have to show that you've taken (or are currently taking) some sort of training course to do with Green Building. This, thankfully, is one of our specialties. We have a number of training courses available weekly, and are adding more all the time. Our classes range from one-day online classes to two-day in-person classes, and everything in between. To get started, just head to our Green Exam Prep Training section and have a look at our offerings. We have a number of Green Associate exam preparation classes happening all the time, any of which will make you eligible for the Green Associate exam!

Assuming you are able to fulfill one of those three requirements, you are eligible to register for and take the LEED Green Associate exam.

Remember that this exam is considered to be "part 1" of the LEED AP process, and is considered to be a prerequisite for the LEED AP+ exams. To register to take the Green Associate exam, visit the GBCI and get started today!

Monday, July 06, 2009

USGBC Addresses Performance Gap-By Chris Cheatham

USGBC Addresses Performance Gap

I'm impressed. In one fell swoop, the USGBC has stepped up to the plate to address the primary criticisms of the LEED rating system.

Kudos to Scot Horst and the USGBC for acknowledging an issue that has bothered many users of the LEED rating system:

“Today there is all too often a disconnect, or performance gap, between the energy modeling done during the design phase and what actually happens during daily operation after the building is constructed,” said Scot Horst, Senior Vice President of LEED, U.S. Green Building Council. “We’re convinced that ongoing monitoring and reporting of data is the single best way to drive higher building performance because it will bring to light external issues such as occupant behavior or unanticipated building usage patterns, all key factors that influence performance.”

In order to address the performance gap, projects seeking LEED certification must agree to comply with one of the following ongoing requirements:

1. The building is recertified on a two-year cycle using LEED for Existing Buildings: Operations & Maintenance.

2. The building provides energy and water usage data on an ongoing basis annually.

3. The building owner signs a release that authorizes USGBC to access the building’s energy and water usage data directly from the building’s utility provider.

There are serious liability and risk issues implicated by this decision, but I am going to ignore those for now.

Instead, I would like to recognize the USGBC for transparently addressing the primary critique of the LEED rating system.

What will happen to projects that don't comply with an ongoing requireme