Page 311 - The Green Building Bottom Line The Real Cost of Sustainable Building

THE FINE PRINT: LEGAL ISSUES IN GREEN BUILDING PROJECTS 289

ture. If certification was obtained when the building was constructed, for example, it
will not help a buyer confirm that the building has actually used less energy than other
buildings over time. Certification also would not preclude the possibility that alter-
ations have been made to the building that are less sustainable or green than the ini-
tial improvements.
Energy and sustainability audits will likely become a typical part of a potential
buyer’s investigation of a property. Buyers may request information regarding how
energy and water are managed, what materials have been used to make alterations,
how air quality is measured, whether programs are in place to encourage the use of
public transportation or bicycles, and what percentage of the building’s waste is recy-
cled. Sellers will need to be able to provide all this information.
A large part of being green is simply being aware of how much energy a building
uses, how many resources it requires, how healthy it is, and where there is room for
improvement. To truly protect the value of its asset, however, the owner of a green
building must not only know these things but must document them as well.

The Costs and Benefits
of Green Counsel

Developers should strongly consider hiring an attorney to help prepare the various
contracts discussed in this chapter. As we have discussed throughout, because devel-
oping a green building raises issues that do not exist in a conventional building proj-
ect, each contract is likely to be more complex in the green-building context, some, of
course, more than others. Legal costs are therefore likely to increase somewhat.
The variables that can influence the amount of legal costs are nearly unlimited and
include the complexity of the project, the level of experience that participants in the
development process have with green building, and whether aspects of the project change
during the development process. In an effort to provide some idea of how legal fees might
increase in a green building project, however, we offer the following example:
Suppose a developer is building a 70,000-square-foot office building on previously
vacant land. Total budget for the overall development of the project is estimated to be
approximately $15 million, with a developer fee of around 4 percent, or $600,000. The
developer hires an attorney to assist with the acquisition of the land, financing of the con-
struction, permitting of the project, negotiation of the design and construction contracts,
and leasing of the building. For a conventional project, the budget for legal fees will
amount to slightly less than 1 percent, or $135,0000, broken down as shown in Table 9.1.
Legal feels associated with acquisition and financing costs should not increase by
more than 5 percent or so if the project is a green building. Legal fees to negotiate the
design and construction contracts could be expected to increase by something closer
to 10 percent, however, given the issues related to certification, construction practices
and the like that we have outlined above. Legal costs related to leasing can also eas-
ily increase by 10 percent or more, since a new lease form may need to be developed,