Perhaps the biggest loophole in the LEED certification process is the fact that there is little incentive for owners to ensure that buildings maintain efficient performance post-certification. Under the previous LEED rating systems, once a building obtained a LEED certification level, it would not be downgraded if actual building performance deteriorated or did not live up to the energy models that helped it achieve its certification level. The most recent LEED rating system changes take a small step toward closing this loophole, as indicated in the recent New York Times Article: Some Buildings Not Living Up to Green Label. The U.S. Green Building Council now requires that newly constructed buildings submit energy and water bills for the first five years of operations as part of the certification process. The failure to produce the information can lead to revocation of the building’s certification level.
The U.S. Green Building Council and other green building professionals recognize the loophole and expect future LEED rating systems to incorporate a comprehensive recertification procedure. See Some Buildings Not Living Up to Green Label. Although the recertification benchmarks are in the works, owners should be prepared to take steps from the inception of the project in order to maximize the recertification opportunity and document compliance with recommended operations and maintenance procedures. Ultimately, this means hiring a reputable commissioning agent to monitor and document operations and maintenance of the building systems throughout the life of the building. Therefore, when determining projected profitability and costs for the project, the owner should budget for continuous commissioning.
Counsel should draft the commissioning agent service contract to require the maintenance of records of compliance with all recommended building operation and maintenance (“O&M”) procedures. This documentation can be crucial if the project fails to obtain recertification and leads to litigation due to underperformance of building systems. The owner will want to point the finger at the design professional and/or the contractor for design/construction defects. A likely defense by the design professional and contractor will be improper O&M. As a result, documentation of compliance with O&M procedures will be essential to proving the owner’s case.
From a practical standpoint, the specific types of documentation necessary to show compliance may not be identified until the design and construction teams have completed their scopes of work. Therefore, the owner may want to enter into separate agreements: one for the initial commissioning stage of the project and one for ongoing commissioning after the O&M procedures are developed.
Counsel should also advise the owner of the risks of hiring a commissioning agent that includes a limitation on liability clause in its contract for services. For example, if the commissioning agent’s damages are limited to its fee, the owner may lose out on a significant pocket for recovery if damages exceed the amount of the fee.
Submitted by Desiree Noisette, Hill Ward Henderson.