Green Building: Cost and Performance Considerations for Homeowners

November 28, 2011

As an attorney who has been practicing law in cases involving construction for over 15 years, it’s natural for me to look at new design and construction ideas through the lens of risks and risk avoidance. That is why when examining green building concepts, I tend to focus on risks that such concepts may present.

Our law firm becomes involved in construction related issues when, during the course of construction, the parties believe expectations are not being met or after project completion when damage (usually water related) suddenly occurs to a part of the building. How do green building products and techniques impact those problem areas?

Owners, designers and builders may begin a project with the stated objective of building a green home. Generally this means that products used are (or are marketed as) indigenous to the building location or sourced within 500 miles, sustainable, and/or built out of materials which have less impact on the environment either through production of the product or through its actual use. Additionally, materials that conserve energy use for the building upon completion are included. The homeowner and builder can decide that they want the structure to achieve a desired level (gold or platinum) LEED certification from the United States Green Building Council. A problem may arise in the implementation of these noble objectives.

Green construction, whether it is related to LEED standards or otherwise, generally includes the following:

  1. Implementation of new and therefore unproven products.
  2. Energy performance improvements through the use of increased insulation and increased introduction of outside air into the building’s ventilation system.
  3. Reuse of existing or recycled building products.
  4. Use of new construction materials and products which have not been field tested over time.

In addition to the above scenarios, the goal of a particular LEED certification comes with its own set of uncertainties.

Here is another question to consider: How are parties’ expectations impacted by the goal of constructing a green building? While these issues continue to evolve in the world of building design and construction, our firm has noted the development of some consistency in regard to problems experienced.

Costs are uncertain

The ability to estimate the costs of green construction is very difficult. In fact, while today’s market requires designers and contractors to be very competitive in pricing to meet a homeowner’s available budget for a project, which is usually fixed, this significantly limits fixed fee contracts. Most professionals agree that a fixed fee contract is impossible for green construction project. Therefore, the parties will likely agree to a time-and-materials type of a contract. This kind of contract must allow for the unknown actual cost of the ever increasing number of new green products, the additional time for installation compared to conventional known materials (which translates to a contractor’s learning curve), and the unexpected requirements for certain LEED certifications which may arise by the regulators providing the certification.

Next week we will examine the issues of dealing with unforeseen problems caused by the performance of green construction materials, and we will also discuss the flood of designers, contractors and new products purporting to be green which now flood the market.

This article was written by attorney Glen Van Dyke of the Van Dyke Law Group, which has offices in Truckee, Eldorado Hills, San Francisco and Las Vegas. Van Dyke has represented thousands of residential and commercial property owners and homeowners’ associations in the resolution of disputes over the construction of their homes or buildings. Property owners who have questions about possible legal issues concerning licensed contractors and designers in both California and Nevada can call 877-868-7013 for more information.

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