Understanding LEED Certification in R.E. and Construction Contracts

By now, just about everyone in the real estate industry knows how ambiguous the term "green building" is. A green building can be anything from a building with a well-kept lawn to one that generates power from the exhaust of passing buses and contains a corner-office sanctuary for endangered beluga whales. So stakeholders now are careful to define "green" in their contracts. One of the more common methods of defining "green" is by reference to the Leadership in Energy and Environmental Design (LEED) system. But, without a full understanding of the LEED process, incorporating LEED into real estate and construction contracts can cause misunderstandings, disputes, and inefficient allocations of risk and responsibility.