Page 309 - The Green Building Bottom Line The Real Cost of Sustainable Building

THE FINE PRINT: LEGAL ISSUES IN GREEN BUILDING PROJECTS 287

for such alterations and improvements, including a list of permitted and/or prohibited
products.
The green lease could also contain specific requirements for the contractor per-
forming any such work on behalf of a tenant and rules and regulations for how and
when such improvements may be performed to minimize any adverse impact on the
occupants of the building. As well, the landlord may prefer to retain responsibility for
maintenance of the mechanical systems serving the tenant’s premises (particularly the
HVAC system), rather than attempt to regulate the tenant’s performance in this regard.
The landlord may even elect to require that all improvements by the tenant to the
premises meet a particular standard, such as LEED for Commercial Interiors.
The so-called casualty provisions of a lease addressing events like fire, wind, and
water damage may also have different implications in the context of a green lease.
Specifically, the landlord may want to retain control over the reconstruction of the ten-
ant’s space following a casualty so that the landlord can ensure that the space is rebuilt
in the most sustainable manner. Further, the landlord may reserve the right to recon-
struct the tenant’s space following a casualty to a higher standard, from an environ-
mental standpoint, than the original premises.

The Double-Edged Sword of the

Green Lease

The use of the green lease by a landlord may have some unintended consequences. For
example, if the lease declares the landlord’s intention to seek LEED certification for a
building and the landlord is not successful in obtaining it, a tenant may want to have
a remedy against the landlord for such failure, including the right to pay reduced rent
or possibly to terminate the lease. Similarly, a tenant may want recourse against a
landlord if the landlord desires to impose certain standards on the tenant with respect
to indoor air quality, yet fails to impose or require compliance by other tenants in the
building with the same standards.
As well, other seemingly innocuous provisions in the lease may take on new mean-
ing in the context of the green lease. For example, most leases contain a “quiet enjoy-
ment” paragraph. This paragraph typically provides that so long as the tenant pays the
required rent and abides by all of the other terms and conditions of the lease, the land-
lord will not disturb or allow others to disturb the tenant’s use and enjoyment of the
premises. It is possible to imagine the tenant using such a clause as a sword against
the landlord if, for example, the indoor air quality of the building declines or is not as
represented by the landlord.
Finally, when the tenant, rather than the landlord, is driving the green leasing
process, a landlord can expect to be held to a higher standard for the features and per-
formance of the building than is typical, and the lease may contain certain tools the ten-
ant can use to ensure that the landlord meets these standards, including the right to
perform for the landlord at the landlord’s expense, the right to reduce or withhold rent,