Contractors and Owners Beware: Lawsuit Follows Green Construction

Contractors and owners everywhere are hearing about the green construction trend, and where construction goes, lawsuits follow. One of the forces behind green construction is the U.S. Green Building Council. The USGBC has developed a third-party certification program and nationally accepted benchmark for the design, construction, and operation of green buildings. This program is known as The Leadership in Energy and Environmental Design ("LEED") Green Building Rating System. Some governmental entities have begun to require certain levels of LEED certification with the construction of buildings and have also offered tax incentives to private owners for achieving certification. In Shaw Development, LLC v. Southern Builders, Inc., an owner filed a countersuit against its general contractor seeking, among other damages, $635,000 in lost tax credits under Maryland's tax credit green building program requiring specific LEED certification. The owner alleged that the contract required the general contractor to build a green building in conformance with Silver LEED Certification. The parties, however, used an AIA Standard Form Agreement for their contract, and only the project manual referenced LEED Certification. The project manual, however, simply stated that the project was designed to comply with Silver LEED Certification. Although its appears that the parties settled or otherwise resolved this matter out of court, this case should serve notice to both owners and contractors to clearly state the contractor's contractual requirements regarding LEED certification or any other green construction expectations. In addition, in April of 2009, HL Construction Law's Rob Remington will take part in a presentation regarding green construction at the ABA Forum on the Construction Industry's annual meeting in New Orleans, Louisiana.