LEED Risk Management: Crossing the Model/Reality Chasm


What happens if I've already jumped in?

This post began as a comment by Mitchell Swann of MDCSystems. "A question that continues to rumble thru my head is how does the owner's 'actions' related to operations and maintenance factor in to the potential for disputes and damages?".

This brings to mind two issues. While participating in a seminar a few months back the esteemed counsel sitting on the panel surmised that all litigation related to sustainable design and construction would be prosecuted using the same basic claims that exist today: delays ("That LEED certification didn't come through before my incentive options ran out!"), errors & ommissions ("You didn't get me my plaque"), negligence ("How high was that standard of care bar in 2002?"), etc. It seems to me that most of the time these issues will sort themselves out fairly and in much the same fashion as any other claim against an architect or designer. If the architect makes a reasonable effort to earn LEED certification making reasonable assumptions about how to proceed, and avoided making any boneheaded statements about their abilities in the field of sustainable design (I forgot to include misrepresentation in the list of claims above), then the law should smile favorably upon them even if something goes awry.

What interests me is what Mitchell raises above: What is really happening when you have a semi-official document that says you give a client a building whose design outperforms an ASHRAE 90.1 baseline by 25%. Does the client have any right to claim damages if the building underperforms in real life? The ASHRAE standard is not designed to cover all loads. Does the client forfeit any claims if he does not operate the building within the parameters of the design assumptions?

What can we do today to mitigate the issue? Not make any claims? This will be unavoidable problem whenever a school or municipality sets an energy benchmark for a project - see North Carolina's here requiring you to beat ASHRAE by 30% here. Are you just not going to take any of those kinds of projects? Good luck lasting five years...

It wouldn't be a fun conversation, but you could ask for a clause exempting you from any damages arising from the owner's operation of the building straying from set design assumptions. Perhaps a global warming clause is in order as well? That's bound to affect your cooling loads!

With an emerging (and proper) emphasis on tracking and more importantly reporting building performance, the real estate market will soon begin to value relative utility performance into leasing and development cost models. How this issue of designer's assumptions vs. owner operations is resolved will have real economic consequences. It is a looming problem that is not easily resolved, but a delay before it matters may be the one silver lining in having a market that undervalues the benefits energy efficiency. Being a blogger, I'm in the fortunate position to simply raise the question and ask the masses to decide on an answer... Please share your thoughts by leaving a comment!

Fun with Disclaimers

Guess what? I'm not a lawyer, and none of anything I've ever said or written or will write about should be construed by you, or your family, or your small to medium sized pets to be legal advice. Your large size pets may construe as they may, but that does not make it any more accurate.


Chris said...

Very timely article. I have a couple thoughts.

First, this article was brought to my attention yesterday: http://blog.cleveland.com/metro/2009/02/_hospital_may_have_lost.html

The article highlights a Cleveland Medical Center that has failed to show energy efficiency improvements. This is the exact scenario that can lead to disputes and litigation.

Second, I am concerned that this will be a hotbed for litgiation with the passage of the stimulus. A large chunk of money is going to the states and the GSA to improve energy efficiency in federal and state buildings. Not all of these buildings are going to perform as expected...

Eric O'Neill said...

ASHRAE 90.1 appendix G, I believe, has the answer to this built right into the beginning of it. Section G1.2 note 2 states:

"Neither the proposed building performance, nor the baseline building performance are predictions of actual energy consumption or costs for the proposed design after construction. Actual experience will differ from these calculations due to variations such as occupancy, weather, energy use not covered by this procedure, changes in energy rates between design of the building and occupancy, and the precision of the calculation tool."

Energy simulations are not predictions. They are useful for comparisons between two energy conservation measures, holding all else constant.

So, the designed energy costs being equal to what was predicted of the ASHRAE baseline doesn't mean anything because that just means the baseline design - in all likelihood, would have preformed considerably worse in real life.

joelmckellar said...


Good to know! It seems like step one is now to get that statement in writing in front of the owner somewhere. My guess is that typically this is not the case?

In the next few years however I predict owners will begin to ask for real reductions in energy use to be accounted for by designers, as building sale and rental prices are likely to be linked to actual energy use and not some model engineers put together.

I guess the issue becomes how does the designer verify that the building as constructed could reach those goals, even if the owner is butchering the efficiency through poor use and maintenance, but presumably has a few months of bills only showing a whole lot of energy costs. The only thing I can think of is for the designer to point to the model, or perhaps make a strong effort to include comprehensive system level submetering and only make claims for those systems? Even then an HVAC energy use profile could be way out of whack if the owner (say, a retailer) likes to leave the doors open in the summer to attract customers into the cool conditioned space inside (a common practice in Charleston, SC unfortunately). I guess you could model for that, but then you'd be oversized most of the time anyway!

Bill Swanson said...

I was just reading an article by Henry Gifford written last summer where he criticized LEED's reliance on estimated energy savings rather than actual energy savings. Suggesting discosure of building energy data could lead to realtors advertising properties based on energy data.

I bet this would put pressure on the building designers to take extra time in their design details and specifications and put pressure on the CM to prevent contractors from cutting corners. Architects and CM's could brag to potential clients that their buildings are XX% more energy efficient then an average new building.

Ken R said...

I think it will also come down to good communication with the client. Perhaps, architects will need to include a recommended system operation plan to the owner at completion of construction with a disclaimer that deviation from said plan may affect the efficiency of the system.

Contributing Author said...

I think a leed certified building and a car are similar in the fact that a car with a 22 mpg estimate is only going to achieve that estimate if the driver adheres to the estimates specifications. This is only going to be an average but it's better than the next model that isn't leed certified.

Anonymous said...

I don't see them as the same. The car's estimated mpg is a measurement. One of the cars is brought to test facility and under detailed, controlled tests they determine what the mpg is for that car model. Individual user mpg will vary. But a controlled measurement was made.

Moebius said...
This comment has been removed by the author.
Moebius said...

"Perhaps, architects will need to include a recommended system operation plan to the owner at completion of construction with a disclaimer that deviation from said plan may affect the efficiency of the system."

In my humble opinion, it should be the MEP consultants who should be making this recommendation to the building owners.

Hopefully LEED 2009 will change the playing field by taking the LEED EAc3 Enhanced Commissioning requirements beyond the 10 month period after occupancy and look more deliberately at the life cycle of a building.

dick gregor said...

Henry Gifford and Joe Lstiburek have been going into the Greenwash issue lately and I must say it seems that "model" performance should not substitute for "real" performance. I do commercial building evaluation, and our standard ASTM 2018-08 has a glib reference that actual knowledge trumps plans and specs. If you see a door, and the door is not on the plan, there is a door. If you look at the electric bill, and it is 30% lower than the code projected electric bill, you have achieved the savings, if you have an electric bill that is 50% higher, you are out of luck, and should unscrew the plaque from the wall.

Eric said...

LEED buildings can, and should, have better energy performance than the average building; however it isn't the fault of the hammer and chisel if the sculpture sucks, it's the guy swinging the hammer.