Green Roofs - Living Architecture Monitor - Fall 2009 - (Page 4)

BEST PRACTICE PART 2 OF 2 RISK-REDUCTION TOOLS LEARNING TO MANAGE THE POTENTIAL RISKS OF GREEN ROOF DESIGN, CONSTRUCTION AND INSTALLATION WITH BONDS, WARRANTIES AND CONTRACTS By Heather Stevenson and Dan Slone substantial body of law has developed to deal with construction problems, including roof failures and associated liabilities. In the last issue of the Living Architecture Monitor (Summer 2009), we began to explore ways to mitigate or manage the potential risks of green roof design, construction and installation. Here in Part 2 of this series, we continue the discussion on best practices regarding risk-reduction tools related to bonds, warranties and the actual green roof contract itself. BONDS Bonds may also be a good tool for shifting risk. With a bond, the risk is shifted to a bank that will pay for damages and take the responsibility for obtaining recovery from the entity posting the bond. Although bonds are frequently required by localities to ensure that projects and infrastructure are completed as promised by developers, bond requirements can be readily incorporated into construction contracts to provide a reasonable level of risk-reduction. Bonds can back completion, performance and warranties, and any party involved in a green roof project can be required to post a bond to ensure satisfactory completion of that party’s portion of the project. Bonds almost always require security or some form of financial guaranty. While bonds may address completion issues, they are rarely accessible for post-construction roof failure. Among smaller contractors, the same bonds are often used to provide assurance on multiple projects, meaning that if there are multiple failures, no funds will be available after the first few remedies. WARRANTIES One of the most common sources of liability are so-called “implied” warranties – and among the most widely used risk-management tools in construction projects are “express” warranties. Implied warranties are unwritten warranties implied by law that generally fall into two categories: 1) Warranties of Merchantability: Warranties that a product purchased is a) as described in the contract and the labels on the packaging, b) is fit for the ordinary use for which the product is designed, and c) is adequately packaged and labeled; or 2) Warranties of Fitness: Warranties that a product sold by a seller for a particular purpose is fit for use for that purpose. Express warranties are those warranties that are specifically expressed by the seller of goods. Consumers have accepted express warranties and LIVING ARCHITECTURE MONITOR are comfortable with the concept, but in truth, warranties are rarely drawn on (except for big ticket items), often lost, and they do not always automatically transfer to new owners of the warranted property. Warranties are often designed with the goal of reducing risks for the manufacturer of systems, more than protecting the consumer. With many building products, the installation instructions are complex and difficult to comply with, meaning that many warranties are void almost immediately. As an owner compares the warranty given for a conventional roof to the types of warranties available for green roofs, there is likely to be a desire for comparable, simple, long-term warranties that wrap installation, maintenance and material issues into a package that eliminates this concern for the building owner. A number of green roof companies are providing warranties for green roofs. Warranties for green roofs vary dramatically. They can cover the total roof-system or only specified components. Different types of warranties are often valid for very different timeframes. For example, roofing contractor warranties may last for one or two years, whereas roofing product manufacturer warranties can extend 20 or more years. The individual components of green roofs (such as the waterproofing membrane) may have other warranty timeframes. Some warranties transfer to new owners, others only to the first owner, and others do not transfer at all. Other warranties – particularly those that concern plants and growing media – are often tied to maintenance contracts. The green roof industry has set a best practice for maintenance contracts at five years, beyond the initial one- or two-year establishment period. Warranties are often negotiable and the parties involved in a green roof project should negotiate warranties that are appropriate for the project. Warranties work well to shift the risk of failure to the entity providing the warranty for a particular product or service. Claims under warranties are often limited to a particular timeframe after product installation or construction completion and, therefore, it is important to inspect projects promptly to ensure that claims are made in a timely fashion. Insurance and bonding do not address products but rather, they shift the risk of roof failure to the design, installation or maintenance professional for that roof. IMPLIED PROBLEMS As described above, warranties can be either express or implied; but of the two, implied warranties are the most dangerous and most often litigated. The issue related to implied warranties is always the interpretation of the warranty: for example, whether the warranty is implied to include performance of the roof as a whole, or is limited to replacement of damaged components only. An implied warranty for performance could make a builder FALL 2009

Table of Contents for the Digital Edition of Green Roofs - Living Architecture Monitor - Fall 2009

Green Roofs - Living Architecture Monitor - Fall 2009
Contents
City Power
Cities Alive!
Welcome to Toronto
Part 2 of 2: Risk-Reduction Tools
Toward Bird-Friendly Living Architecture
Cities Leading by Example
Q&A: On the Roof With...
7 Million-Square-Feet
Seeding the Future
A Green Roof Capitol City
From "Beantown" To "Greentown"
Beyond the Debate
A More Beautiful Baltimore
Policy Support
Seattle's Green Factor
Understanding The Green Roof Evapotranpiration Process
GHRC Professional Development Calendar
Welcome New Corporate Members
The Girl Scout Knows Best

Green Roofs - Living Architecture Monitor - Fall 2009