Green Law Corner: What LEED v4 Means for You

by Spilman Thomas & Battle, PLLC

In late 2013, the U.S. Green Building Council released its latest version of LEED, Version 4. Most of you have certainly heard of LEED but you may not know what LEED really means. LEED stands for Leadership in Energy and Environmental Design and is a national rating system for the design, construction, operation and maintenance of “green” buildings, homes and neighborhoods.

In states such as North Carolina, more than half of all new commercial construction is seeking LEED certification. In Winston-Salem alone, 2013 saw the certification of more than 25 buildings, including numerous residence halls and academic buildings at Wake Forest University, Winston-Salem State University and Salem College, Goodwill’s Regional Operations Center, PepsiCo Call Center and almost every addition to Piedmont Triad Research Park.

The LEED rating system provides prerequisites and criteria for the green building industry and third party verification of green buildings. LEED buildings can earn credits to satisfy green building requirements in areas such as water efficiency (by reducing potable water consumption), energy efficiency (by consuming less energy and generating fewer greenhouse gas emissions) and materials and resources (by using sustainable building materials and reducing waste), among many others. In addition, along with incentives and tax rebates available for LEED certified buildings and developments, studies across the board show that LEED certified buildings can achieve significantly higher rents, sale prices and occupancy rates while posing lower investment risk.

Although LEED v3 (also called LEED 2009) will still be available until June 2015 to give the green building industry time to adjust, the latest version of LEED contains a few significant changes of which all businesses involved with the green building industry should be aware:

  1. Material Transparency. LEED v4 requires a better understanding of the products being used in a building and where they come from. Companies will be required to report on the composition of the materials used in construction, and projects will be rewarded for specifying materials on what is called a “lifecycle basis” rather than just a single sustainable attribute. This requirement poses difficulties since there is a lack of standardized industry data for design firms and project owners, and the effects may be far-reaching. Spilman is currently analyzing the effects of this requirement (on, for example, whether a design firm that accepts responsibility to “ensure that a project meets its goals by using the best products that align with project requirements,” is essentially giving the project owner a guarantee that is beyond the firm’s control) and future Green Corner articles will focus on this issue.
  2. Metering and Recording Energy Use. LEED v4 requires metering and recording a whole building’s energy and water use. In previous iterations of LEED, which merely provided credit when building owners monitor energy and water usage, critics complained of “greenwashing” – projects claimed to be green and obtained LEED certification at some level by focusing on “easy” and “cheap” credits to obtain LEED status. LEED v4 puts at end to that by mandating as a prerequisite to LEED certification that building owners monitor and report energy and water usage.
  3. Integrated Design. LEED v4 contains a new credit for bringing together the full construction team at an early stage in the design process. Every LEED Project is guided by two documents, the Owner’s Project Requirements (OPR) and Basis of Design (BOD), which define project goals and strategies for meeting them. In the past, these documents were not required to be completed until the design was 50% completed, at which time basic commissioning typically begins. The new credit defines steps that must happen before the design gets under way and provides an incentive to change how a team approaches the project altogether.

The effects of the changes in LEED v4 on the green building industry will play out in the months and years ahead. Spilman is analyzing and monitoring those effects with an eye on protecting and guiding its construction industry clients.

For a comparison of the major changes between LEED v3 and LEED v4, download the chart available on USGBC’s website.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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