Hawaii Green Building Law

The United States Green Building Council (”USGBC”) recently accounced its publication of the “Green Office Guide: Integrating LEED Into Your Leasing Process.” At first glance, the guide appears to be targeted towards addressing the tenant’s perspective. According to the USGBC:

This new publication is designed to help office tenants and their service providers (lawyers, brokers, consultants, design professionals) integrate LEED early into the leasing process. It is written to provide critical background content as well as functional tools (including lease language and site selection checklists) that can be used throughout the transaction.

The Chapters of the USGBC Green Leasing Guide are as follows:
SECTION 1 – Why Green the Leasing Process?
1.1 How Buildings Affect the Environment and Tenants
1.2 Primer on LEED®

SECTION 2 – Greening the Leasing Process
2.1 Environmental Strategies for the Leasing Process
2.2 Implementing Environmental Strategies at Renewal and in New Space Searches
2.3 Greening the Lease
2.4 Best Practices for LEED for Commercial Interiors Project Management, Design and Construction
2.5 Implementing Environmental Strategies Under Existing Leases

SECTION 3 – Tools for Greening the Leasing Process
3.1 LEED for Commercial Interiors Scorecard
3.2 Basic Environmental Impact Questionnaire
3.3 Sample Criteria for Qualifying Project Team Professionals
3.4 Sample Green Building RFP Questions
3.5 Building Questionnaire for Tenants Seeking LEED for Commercial Interiors Certification
3.6 Sample Lease Provisions
3.7 Sample Environmentally Preferable Purchasing Policy for Tenant Operations

Several other organizations have published information regarding negotating and drafting a green lease including BOMA’s Green Leasing Guide and the California Sustainability Alliance’s Green Leasing Toolkit. While these are all helpful resources, green building and green leasing involve unique issues. The parties to the lease must be aware of the sustainability issues related to the property and should tread lightly as careful drafting is required to address green building issues. Prior to entering such a lease, both landlords and tenants should seek counsel from an attorney experienced in green building issues.

What do CitiGroup, Wal-Mart, Subway, Toyota and Dunkin Donuts have in common? Each company, in addition to companies across the country has built a “green” store or is a tenant in a “green” development. Several corporations are mandating that their corporate headquarters be located within LEED certified buildings. According to the National Real Estate Investor, “more and more companies are recognizing the business case for sustainability” which includes paying premium rent for occupying “green” office space.

As green development grows, green leasing will also increase. So what is a “green” lease? In an earlier post we discussed the difficulty of defining the term “green building.” Green leasing similarly does not have a standard definition. Nevertheless, there are significant sustainability and liability issues that must be clarified when establishing the landlord-tenant relationship for a LEED certified property or green development. So when you’re leasing green, the typical form lease will not apply.

A green lease should address annual operating charges, energy use and efficiency, water conservation, recycling requirements, tenant build outs, maintenance and repairs, operating expenses, operational performance, transportation, hazardous materials and green cleaning products and applications. We will discuss these issues separately in future posts.

Most landlords, tenants and property managers have not confronted the legal issues that are presented in leasing green property. One example, according to Frank Musica’s presentation “Don’t Let Green Design Cause Red Ink” is
that of a tenant that contracted with the government to provide military systems designs and terrorism identification services. The green aspects of the tenant’s space included extensive daylighting systems. The government later determined that the windows and skylights placed confidential information at risk and threatened to revoke the tenant’s security rating, cancel existing contracts and prevent future consideration. The potential liability stemming from the building’s sustainability aspects typically is not specifically addressed in the normal landlord-tenant relationship.

The lease is a critical document setting forth the relationship between the parties and the terms of occupancy. The parties to the lease must be aware of the sustainability issues related to the property and should tread lightly as careful drafting is required to address green building issues.