The latest in green development: advising your client on the new standard for real estate projects.

• Author: Lumpkin, Peyton White
• Position: Real Property, Probate and Trust Law

Green strategies promise to reduce developments' impact On the environment and provide health and productivity benefits, all while saving money. But how can you and your clients distinguish green marketing claims about the construction and operation of a real estate development from greenwashing? This article provides an overview of green legal issues that affect the planning, financing, design, construction, operations, and leasing of projects, including green building rating systems, incentives for green projects, and drafting concerns in construction, leasing, and loan documents. You will understand how green can be verified and measured, and concerns arising from common real estate transactional documents.

Green Building Rating Systems

Competing nonprofit organizations have developed a variety of green building rating systems. These systems aim to measure the climate-friendly performance of various components of construction and operation of buildings, particularly increased energy efficiencies.

* LEED--The preeminent green building rating system is LEED, an acronym for Leadership in Energy and Environmental Design, which is a voluntary, nationally recognized third-party certification system for green building projects created and maintained by the U.S. Green Building Council (USGBC). (1) To receive LEED certification, a developer submits its project for review to the Green Building Certification Institute (GBCI), the organization that administers project certification under the LEED rating system. The USGBC has no connection to any governmental agency. However, its prestige is such that LEED has been adopted as a minimum standard of sustainability by numerous governmental entities that regulate land use and development within Florida and across the nation. The USGBC first introduced a LEED pilot program in 1998 and launched its most recent version, LEED 3.0,2 in April 2009.

LEED certifications are not just for new construction projects. The USGBC rates and certifies a wide variety of development projects. It currently offers rating systems for certification in the categories of new construction and major renovations, existing buildings, operations and maintenance, commercial interiors, core and shell, schools, retail, healthcare, homes, and neighborhood development. (3)

LEED uses a point system providing credit for meeting prescribed green building requirements. A project can achieve one of four levels of certification, depending on how many points it has documented. For example, with LEED 3.0 for new construction, core and shell, and schools, a project earns a rating of "LEED Certified" with 40 to 49 points, "LEED Silver" for 50 to 59 points, "LEED Gold" for 60 to 79 points, and "LEED Platinum" for 80 points or more. The descriptions of the available points are found on the USGBC website. (4)

LEED points can be earned in six categories of sustainability: sustainable sites, water efficiency, energy and atmosphere, materials and resources, environmental quality, and innovation in design. For example, a project can earn points in the sustainable sites category if it is located on land that has previously been developed (as opposed to a pristine site in its natural condition); a project can earn points in the materials and resources category by incorporating significant amounts of "renewable" materials (those requiring fewer than 10 years to grow and harvest), such as bamboo, cork, and straw LEED 3.0 offers special points for projects that effectively address issues of regional concern in Florida and in other selected locations with atypical climate conditions. (5) A project is evaluated after completion based upon documentation submitted.

Not only does the USGBC provide rating systems for projects, it also provides for accreditation of people through the GBCI. (6) You've probably noticed a number of lawyers, architects, engineers, and other design professionals who now include "LEED AP" after their names. A LEED accredited professional has passed an examination geared to demonstrate a level of knowledge regarding environmentally sustainable practices in building design, operation, and management. The credential was first offered in 2001, and specialties were added in 2009.

LEED certification of a project increases both the general complexity and the need for teamwork and advance planning. All project team members--including the owner, designer, constructor, and major subcontractors--have different but integrated responsibilities for achieving the desired level of certification, and their respective contributions need to be coordinated in order to meet criteria for LEED certification. The presence of a LEED AP on the project team provides assurance that at least one person understands these interlocking relationships and also earns the project a point.

Effective July 1, 2008, all Florida "county, municipal, school district, water management district, state university, community college, and Florida state court buildings" are required to be constructed to meet either LEED, the Green Building Initiative's Green Globes rating system, the Florida Green Building Coalition standards, or other nationally recognized green building rating system. (7) The State of Florida has also instituted new requirements for greenhouse gas reduction and energy conservation strategies in local comprehensive plans. (8)

Local governments have increasingly established LEED requirements for buildings they own, lease, or finance. For example, Miami-Dade County requires that all new county buildings achieve a minimum of LEED silver. (9) The City of Miami's zoning code, "Miami 21" (10) requires that all new private buildings of more than 50,000 square feet in specified zones achieve at least LEED Silver certification or equivalent standards approved by the city and further requires that the owner post a performance bond (11) to assure certification.

* Other Green Rating Systems--Although LEED is the preeminent green building rating system, there are several others that are frequently used in Florida, including those developed by the Florida Green Building Coalition, Green Globes, and Energy Star.

The Florida Green Building Coalition (FGBC) is a nonprofit Florida corporation dedicated to improving the "built environment" by providing statewide standards to be verified by an independent organization. The FGBC has five certification programs for new development projects: Green Home Standard, Green Development Standard, Hi-Rise Residential Standard (residential buildings over three stories), Green Local Government Standard, and Green Commercial Building Standard (commercial buildings of...