Sustainable Land Development Today - November/December 2008 - (Page 22)

sured certification guarantee, each with pros and cons, including among others: Contract for a rating guarantee with insurance negotiated to explicitly cover the risk of default. While this may appear to be a desirable approach for both parties as any increased premium for the extended coverage could be factored into the project economics, there are probably no insurance companies that currently write professional liability insurance for architects that will want or be able to underwrite such coverage because numerous downstream factors from the design make it difficult to evaluate risk. From the insurance carrier’s perspective, underwriting such a risk is very difficult to understand and therefore price properly. In fact, it may only be possible to price the risk properly after an adequate litigation history and/or more clarity of the legislative and regulatory outcomes. Forget about seeking third party ratings and focus on performance metrics. Some would argue that the “chase” for points under a green building rating system, whether as a requirement or aspiration, could result in creating unnecessary risks in the design and construction process (e.g., encouraging the use of novel or untested products or technologies, etc.) and that a better approach is to forego pursuing the rating altogether and focus on the desired performance metrics for the building (e.g., energy and water efficiency targets, etc.) with a structured approached for the design and delivery of the project in a manner most likely to achieve the desired and specifically identified performance metrics. The contracts among the project parties could incentivize the meeting or exceeding of the metrics recognizing that the design professional may not play the primary role in delivering the performance guarantee. In the same manner that the design professional cannot provide a guarantee for a rating certification, no guarantee of performance can be given. In fact, the lack of coverage for the rating system guarantee is a subset of the standard rejection of any performance guarantees within the scope of a professional liability coverage policy. The policy covers contracts for the delivery of “professional services” within the generally accepted competencies and judgments of a particular design professional. It is the failure of basic competencies or requisite judgment that is covered, not a contractually undertaken guarantee of outcomes. Given this, it may behoove the owner/developer to seek out other ways in which to obtain the assurances that may be necessary. It may require obtaining assurances for performance from the general contractor, or engaging in a design-build delivery system, or some other mechanism. While abandoning the pursuit of certification may have its merits as well, in reality the green building certification may be of such import to a particular owner or tenant that it must be sought despite any attendant risks to the parties. All that can be done under such circumstances is to become as fully aware as possible of the risks involved. Do not contract for a guarantee of green building certification from the architect; instead, make the certification a goal. Perhaps the more reasonable approach, if pursuit of a rating is required, would be to forego a contractual guarantee from the architect and instead make the desired third party rating a goal or aspiration subject to the designer’s normal standard of care. The owner/developer, and his counsel, would then concentrate their attention on other more appropriate parties or risk transfer mechanisms to bear the risk of a certification failure. This approach may leave the owner with less contractual comfort in relation to his architect (or other design professionals) since there is no written “guarantee” certification will be achieved, but any such guarantee may provide illusory comfort anyway since, first, many factors subsequent to the design may affect the rating outcome, and second, the design professional may find himself without coverage. According to Robert Connor, “…the foremost underlying cause of claims against architects is missed expectations caused by poor communication with the owner or developer. With sustainable development, there may be an added expectation related to building performance or rating that can complicate the process. As such, regardless of the contractual approach negotiated by the parties, perhaps the most important step that an owner or developer can take to ensure a successful sustainable project is to meet and communicate frequently with the design and contracting teams from project conception to completion to manage the expectations. This will lead to better projects that meet the goals of both the design team and the owner or developer.” The trend toward sustainable building is undeniable and owners and developers are increasingly interested in building and owning high performance buildings. However, as with any emerging industry trend that includes a change in traditional processes, risks emerge that require careful evaluation and management. In the case of architects’ professional liability insurance, owners and developers need to realize that their “negotiating prowess” that culminates in securing a rating guarantee from an architect may leave them with a claim backed only by the keys to the designer’s shop. SLDT About the authors: Paul D’Arelli, Esq. LEED® AP is with Greenberg Traurig, P.A., based in Fort Lauderdale, Florida. He can be reached at (954) 768-8248 or darellip@gtlaw.com. Ujjval K. Vyas, Ph.D., J.D. is a Principal with the Alberti Group of Chicago, Illinois. He can be contaced at: 312.810.1008 or uvyas@albertigroup.net Footnotes: 1LEED® is a registered trademark of the U.S. Green Building Council. 2 A related issue not within the scope if this article is whether the architect’s completion and submittal of the credit templates for LEED certification to the US Green Building Council could be construed as a warranty or certification that could similarly result in exclusion. 22 November/December 2008 Sustainable Land Development Today

Table of Contents Feed for the Digital Edition of Sustainable Land Development Today - November/December 2008

Sustainable Land Development Today - November/December 2008 Contents Our Voice Editorial Board SLDT Resources The BottomLine Go Forth and Tread Lightly on the Land It’s About Name Recognition Managing Risk in the Sustainable Building Frontier Industry Spotlight Achieving Sustainable Land Development Worthy of Recognition Stormwater Wastewater Erosion Control Innovation Classifieds Advertiser Index Last Word

Sustainable Land Development Today - November/December 2008

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