Risk mitigation in the event of a failure to meet the contractually required level of green certification may include attempting to certify the project under an alternative rating system. For example, it might be possible to mitigate a project’s failure to achieve LEED certification by having the project certified with an Energy Star rating or a Green Globes certification post completion.
The preferred resolution to these thorny green issues is better contract drafting upfront. The contractual allocation of risk for failure to achieve the desired green certification is key. This could include liquidated damages in the event the failure to achieve the requisite level of certification was the developer’s negligent record keeping (a common problem with LEED projects), and a safety clause if the failure results from the use of innovative products, materials or design systems which fail to perform as anticipated through no fault of the development team.