When I first read about Energy Ace's LEED certification guarantee, I thought it was nuts.
Then I read a Co-Star article and realized Energy Ace's guarantee was brilliant.
When I read a green building regulation, I always look at the enforcement mechanism. And when I look at a green building contract, I always focus on the potential damages. Energy Ace's LEED certification guarantee is brilliant because it limits potential damages if certification is not achieved:
"If a project misses its LEED target level (like Silver or Gold) or fails to earn certification altogether, Energy Ace would refund its LEED administration fee, which is between 30 percent and 45 percent of its total fees, Robertson said.
Simply brilliant. Energy Ace provides a LEED certification guarantee that reassures owners while simultaneously limiting Energy Ace's potential damages.
The potential damages stemming from a project's LEED certification failure are much greater than the limit described by Energy Ace. For example, in Shaw Development v. Southern Builders, the owner sued for $635,000 when the project failed to achieve certification by a certain time. I have never heard of a triple digit LEED administration fee.
Brilliant, right?
By the way, I can help you write a similar contract...
Chris Cheatham, J.D., LEED AP, is a construction attorney in the Washington, D.C., Metro Area. Chris writes the blog Green Building Law Update, where this post originally appeared.
LEED-Silver Certified AMB Morgan Business Park - Image courtesy of AMB Property Corporation.