Better Building: The Responsible Developer's Blog : Northwest Construction Lawyers & Attorneys : Foster Pepper Law Firm : Sustainable Building & LEED Projects in Seattle & Spokane, WA

Seems as if green building is not only here to stay, it is the one bright light in the otherwise dark or dim construction industry. Nonetheless, there is growing criticism--and response---about perceived deficiencies with the current LEED rating systems.

We have reported robust predictions for green building in previous blogs. Green building now accounts for nearly one third of new construction in the U.S., up from 2 percent in 2005, according to McGraw Hill Construction. Currently, LEED certification comes after construction of the particular structure, with no relationship to that structure's operational performance in terms of energy efficiency or carbon footprint. Green building certification does not ensure lifelong energy efficient performance, something critics believe should be accounted for in a green building rating system.

USGBC responded to this criticism by launching its Building Performance Initiative last summer. After a series of area summit meetings with local, state and federal government representatives, USGBC chapters, developers, architects, engineers, builders, and other construction professionals, USGBC has created the Building Performance Partnership (BPP). BPP is collecting water and energy use data from LEED certifed buildings, which are required to be reported under LEED's 2009 rating systems. Recently, current LEED certified building owners were invited to participate in BPP.

USGBC assures its users that reports will not be used to decertify existing certifications. In a recent press release, USGBC states BPP "will result in the population of a comprehensive green building performance database and enable standardization of reporting metrics and analytics to establish new building performance benchmarks." Currently, more than 120 projects are participating in BPP, and USGBC says these projects will receive a basic performance report in time for its Greenbuild 2010 conference in November this year.

Critics don't think this goes far enough, and think the federal government should lead the charge to establish building performance requirements. Phil Bernstein, vice president of Autodesk, Inc., a San Rafel, Calif., engineering and design software company, suggests "The USBGC should make it so that the LEED Platinum plaque pops off the wall if the building fails to perform."

Expect continuing developments and requirements in the green building performance arena, from USGBC and other rating agencies, along with the federal, state and local governments. In the meantime, I am pleased to report that our Seattle office building recently achieved a LEED Silver rating under LEED's existing buildings program... more to report later!
 

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The 2010 Washington State Legislature amended the State Environmental Policy Act (“SEPA”) to provide cities with a new voluntary tool to encourage urban infill development. This tool, or as many call it, “upfront SEPA,” encourages urban infill by providing greater regulatory certainty for infill development. The 2010 amendment bars administrative and judicial appeals of SEPA compliance for infill development when a city prepares a nonproject Environmental Impact Statement (“EIS”) that analyzes the environmental impacts of future infill development at the planning stage. This is the Legislature’s latest attempt to accommodate projected population growth in urban areas in order to avoid rural sprawl and the conversion of forest and agricultural resource lands.

Although SEPA already contained several provisions designed to facilitate infill development, the 2010 SEPA amendment, RCW 43.21C.420, improves upon the previous measures. Specifically, the amendment:

• Eliminates all SEPA-based appeals for infill development projects if: (1) the city completes a nonproject EIS for comprehensive or subarea plan policies and the development regulations designed to accommodate such infill development; (2) the infill development is consistent with these comprehensive or subarea plan policies and development regulations; and (3) an application sufficient to vest the project is submitted within a period specified by the city, not to exceed ten years.
• Explicitly authorizes cities to charge a late-comers fee to recoup the costs associated with preparing the nonproject EIS.
• Requires increased public notice to encourage early public participation in the planning and nonproject SEPA review processes.

Only cities meeting statutorily defined eligibility requirements may exercise the authority granted by the 2010 SEPA amendment. Eligibility extends to any city with a population over 5,000, located in counties governed by the Growth Management Act, that has a designated mixed-use or urban center subarea, or meets specified urban transit criteria. In Eastern Washington, different transit-oriented eligibility criteria apply to cities located outside of Spokane County.

If a city elects to invoke the 2010 amendment, the city is subject to several requirements:

• The city must establish comprehensive or subarea plan policies and development regulations that allow and encourage high density infill.
• The city must complete a nonproject EIS for the plan policies and development regulations that analyzes the environmental impacts of development consistent with the policies and regulations.
• The city must consider establishing a program for the transfer of development rights from county-designated agricultural and forest resource land to the area targeted for infill.
• The city must hold a public meeting before a scoping notice is issued for the nonproject EIS. Notice of the meeting and notice of the scoping must be mailed to all property owners within the subarea and other interested parties outside of the subarea.

The amendment is lengthy, containing numerous detailed provisions governing eligible cities, authority to recoup the nonproject EIS preparation costs, and immunity from SEPA-based appeals. Some of these provisions vary for local governments depending on population and region of the State. Nonetheless, the 2010 SEPA amendment provides cities with an effective voluntary tool to encourage urban infill development.

For additional information on the amendment, please contact Jeremy Eckert (eckej@foster.com; 206.447.6284) or Dick Settle (settr@foster.com; 206.447.8980).*

* Foster Pepper land use attorneys, Pat Schneider, Tayloe Washburn, Dick Settle, and Jeremy Eckert, were deeply involved in drafting the 2010 SEPA amendment (ESHB 2538, 2010; RCW 43.21C.420). The legislation was endorsed by the Climate Action Team, received unanimous approval from the State Senate, and nearly received unanimous approval in the State House.

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Does the responsible developer need to manage risks by limiting liabilities? Of course, no developer can hope to survive (especially in this real estate market) without being a good risk manager. 

So what is that state of the law regarding limitations of liability (“LOL”s)? Well it depends on whether the LOL is used to manage a business-to-business risk or a seller-to-consumer risk. Why? Because the law affords a greater level of protection for consumers. This dynamic is best explained by some recent Washington court cases.

In a Washington appellate decision last month, Mattingly v. Palmer Ridge Homes, (a seller-to-consumer claim) the court examined the developer-general contractor's contract and warranty LOL disclaimers. The test the court based its ruling on was whether or not the developer’s disclaimers were enforceable due to being clearly worded, or unconscionable and unenforceable due to the developer’s greater sophistication, bargaining power and poorly drafted contracts. The court found that due to providing incomplete information, and the use of confusing contract language, that some of developer’s disclaimers were ineffective. However, the disclaimers that were clearly worded “as is” (as in the stereotypical used car context) and were specifically related to certain claims were found to be effective.

Compare this result to a Washington Supreme Court case from last year in the same context, a residential real estate contract, which at first blush appears to be another seller-to-consumer case. The case was Torgerson v. One Lincoln Tower. Here the court examined the same type of LOL disclaimers to determine whether they were enforceable. The court found that the developer’s disclaimers were effective and enforceable for at least two big reasons: the disclaimers were clearly labeled in bold as such; and the court took notice that these purchasers were far more than average consumers, they were licensed real estate agents and thus appeared to be held to a higher (business-to-business) standard.

The take away here is that the responsible real estate developer should endeavor to ensure (especially when dealing with consumers) that his or her contracts, warranties and purchase sale agreements pass the test for enforceability. After all, responsible risk management is good business. 

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