Mitigating Legal Risks in Urban Sustainable Building

There is no doubt that urban sustainable building is a growing trend. More and more builders are looking to incorporate environmentally friendly practices into their projects, and governments are pushing for more sustainable development. However, this trend comes with a certain level of risk for builders, as there are a number of legal challenges that can arise when using these techniques. Following are some of the most common risks associated with urban sustainable building and ideas regarding how builders can manage those risks.

One of the biggest risks associated with urban sustainable building is the potential for construction defects. These may result from a variety of factors, including improper design and untested or unproven materials or construction techniques, which may work in other climates but cause unforeseen problems in Colorado. To mitigate this risk, builders should take the time to thoroughly plan and design their projects, taking the advice of knowledgeable design professionals and not the word of a salesman pitching the latest and greatest green product. Builders should also ensure their trade partners have all of the information and training necessary to correctly install new systems and products. If necessary, bring the design team, trade partners, manufacturer, building department, and a representative of a green building certification organization together during the planning, design, and construction mock-up stages of a project to ensure that everyone is on the same page as to how to build a home to meet the desired criteria.

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Another risk relates to the marketing and sales process. Under current Colorado law, it is a violation of the Consumer Protection Act (CCPA) for a builder to “either knowingly or recklessly make a false representation as to the certification of property,” or to “represent that property is of a particular standard, quality, or grade if he knows or should know that they are of another.” For example, claiming that a home meets certain certification requirements may result in a CCPA claim if the home ultimately does not perform as promised. This is a big problem, as the Colorado General Assembly is, as of the writing of this article, considering House Bill 23-1192. If passed in its current form, the bill would remove the knowing or reckless standard for prevailing on a CCPA claim. Violations of the CCPA can result in an award of treble damages and an automatic award of attorneys’ fees (up to a combined cap of $250,000). Note that most builders’ commercial general liability insurance policies do not cover damages associated with CCPA violations. To avoid this risk, builders should ensure that their marketing and sales efforts do not overpromise the performance characteristics of their homes.

Urban sustainable building is a trend that is here to stay. While it can bring many benefits, it also poses a certain level of risk for builders. By being aware of the potential risks, and taking steps to mitigate them, builders can reduce the likelihood of legal challenges and ensure the success of their projects.