Since green building is still a relatively new practice, little legal analysis exists regarding LEED disputes—protect yourself by properly maintaining records.
Imagine this scenario: John Smith, a general contractor and the owner of ABC Construction, was excited to learn that his company had been awarded a contract to construct the Watkins Building, part of a multi-use complex in Boise, Idaho. Although he had been involved in commercial construction for more than 20 years, this was his first LEED (Leadership in Energy and Environmental Design) construction project.
After ABC won the bid, Smith and his attorney, Bob Andrews, began finalizing the construction contract. Smith and Andrews understood that the owner expected to obtain LEED Gold certification under the USGBC’s New Construction Green Building Rating System. They also understood that ABC would not assume direct liability if the project did not meet the owner’s certification expectations—the architect would meet those expectations. Nevertheless, they realized that ABC would be subject to breach of contract, negligence and/or construction defect claims if it failed to construct the building according to the construction and engineering design documents.
Maintain Records and Agreements
Andrews advised Smith that he needed to properly maintain and organize all of the records and agreements generated during the construction project to protect his legal interests in case a future dispute came up over the Watkins Building construction project. Smith agreed and decided to assign his office manager with the task of organizing and preserving all bid documents, contracts, change orders, time sheets, invoices, electronic records and other project-related documents that ABC processed.
Andrews also recommended that ABC develop and adhere to a comprehensive written document retention policy that would include standards for the retention, destruction, backup and storage of ABC’s electronic business records and communications, including computer files, emails and text messages. He knew from past experience that his construction clients who addressed that issue prior to beginning work on a project were better prepared to retrieve and produce such documents during a dispute. Smith assigned this task to his IT department.
After examining the LEED prerequisites and the various LEED credits that the owner wanted to obtain, Smith and Andrews developed a list of documents that were necessary for demonstrating compliance with those prerequisites and credits. The list included invoices, materials specifications, product warranties, payment records and photographs. Smith and Andrews knew the process of collecting, organizing and filing those documents would require additional time, but they understood it was essential to help protect ABC against claims by the owner and/or architect.
Smith and Andrews also discussed various ways to collect and organize project records to demonstrate that ABC had complied with LEED-specific construction requirements. For instance, ABC was required to create a plan for monitoring and maintaining indoor air quality both during construction and prior to building occupancy, which would allow the owner to achieve two points in the Indoor Environmental Quality credit category. Therefore, Smith directed his construction foreman to create a separate file to include documentation, photographs and other information that demonstrated compliance with that category’s requirements.
Require Subcontractors to Retain Records
Andrews also advised Smith to require subcontractors to obtain and retain records, including invoices and manufacturers’ product descriptions that demonstrated the use and value of certain materials incorporated into the project.
For example, because the owner was attempting to achieve the Regional Materials credit by using a certain amount of materials that had been extracted and manufactured within 500 miles of the project site, certain subcontracts contained a clause that required the subcontractors to furnish ABC with documentation that demonstrated these requirements had been met. Also, because the owner planned to earn several points for using low-emitting paints, sealants and adhesives, the subcontractors were required to obtain and retain documentation (invoices, product descriptions and/or warranties) that would allow them to demonstrate compliance with the relevant emissions standards.
In support of the owner’s efforts to achieve a credit
