The Stimulus Money Has Finally Arrived!

All across the country, State agencies are "Awash"
with Stimulus money for Weatherization

Ready or not, Here is comes!$$ States are getting a massive boost in federal money to weatherize drafty homes, an increase so huge it has raised fears of waste and fraud and set off a scramble to find workers and houses for them to repair.

**The Only way to absolutely "Verify" both missing insulation as well as the completed job, is with an Infrared Thermal Scan! See more at Go-IR.com

An obscure program that installs insulation in homes and makes them more energy-efficient is distributing $4.7 billion in stimulus funds -- dwarfing the $447 million originally planned by Congress this year and the $227 million spent in 2008.

That is enough to weatherize 1 million homes, instead of the 140,000 normally done each year.

President Barack Obama said pouring money into the program would lower utility bills for cash-strapped families, provide jobs for construction workers idled by the housing slump, and make the nation more energy-efficient.

"You're getting a three-fer," Obama said. "That's exactly the kind of program we should be funding."

But some worry states won't be able to keep track of the money.

Leslie Paige, spokeswoman for the Council for Citizens Against Government Waste, said the program is open to fraud because of the way oversight is divided. The federal government passes the money to states, then states pass it to community action agencies, and the agencies pass it to contractors who work with customers.

"It's such a Rube Goldberg operation it should be setting off alarm bells," she said.

Energy Department spokeswoman Christina Kielich defended the program, saying the federal government monitors state operations and does a thorough review at least every two years of the local organizations. In addition, states are getting their money in increments and must demonstrate quality control to get more.

The program helps low-income families take steps to reduce their home energy expenses, from caulking leaky windows to replacing heating and cooling systems. The Energy Department says 6.2 million households have benefited since it began in 1976, saving the average household about $350 a year on energy bills.

In addition to receiving an infusion of stimulus money, the program was expanded to cover families making up to twice the federal poverty level, or $44,100 for a family of four. Also, the average amount that can be spent per house was more than doubled to $6,500.

The funding for New York is going up from $20.1 million last year to $395 million. California's share is soaring from $6.3 million to $185.8 million. Virginia's is going up 23 1/2 times, from $4 million annually to $94.1 million.

Mizz-OU-Rah!! Gears Up!!

Being a Mizzou Alum and a "Show Me" kinda of guy, I really liked this news from my home state.




Missouri Turning to Private Contractors for Home Energy Audits
2009 tax deductions likely to spur increased demand
December 2008

The Missouri Department of Natural Resources sponsors the Home Performance with ENERGY STAR program, which makes certified home energy audits available to homeowners.
Missouri is gearing up for an increasing demand for home energy audits by authorizing private, certified contractors to perform the assessments. Through the Home Performance with ENERGY STAR® program, homeowners can request a home audit, or performance analysis, which will provide a series of recommendations for increasing energy efficiency.
Fluctuating energy prices in the last year have increased general awareness of the need to curb usage. In addition, new Missouri legislation that goes into effect in 2009 provides a tax deduction for home energy audits and the cost of implementing recommendations, provided that the procedures are done by individuals certified by the state's Department of Natural Resources. The department's Energy Office is administering the auditor certification effort, as well as the Home Performance with ENERGY STAR program.
In the Kansas City area, the home audits are overseen by the Metropolitan Energy Center. A story in the October 5 edition of the Kansas City Star ("Area Program Aims to Cut Home Energy Use") reported that home energy audits generally cost between $300 and $500. A rebate of up to $600 is being offered by Kansas City Power and Light to its Missouri customers who take advantage of the Home Performance with ENERGY STAR audit and implement at least one of the recommendations to improve efficiency.
For homeowners considering a home audit, the Department of Natural Resources provides a list of certified energy auditors (also called "building analysts"). It is up to homeowners to select an auditor, to determine whether to make recommended improvements, and to choose a supplier to perform whatever work is done.

Oregon Governor Seeks Mandatory Efficiency Audits for Home Sales

Oregon's Governor proposes a Mandatory Efficiency Audit for ALL Home Sales!

All homes and commercial properties being sold in Oregon would be required to have an energy efficiency score under a new proposal.
Potential home sellers determined to ride out the sputtering housing market would do well to invest in efficiency upgrades while they wait — particularly if a new real estate mandate under consideration on the West Coast is a sign of what’s to come.
Oregon’s governor, Ted Kulongoski, wants to require any owner selling or renting a home or commercial building in the state to obtain a certificate disclosing the property’s energy use and greenhouse gas emissions. The mandate, part of his climate change agenda for 2009, would take effect in 2011 for new and existing homes and in 2012 for commercial buildings.
“With escalating energy prices, a homeowner or small business person has a right to know the energy performance of a home or building they invest in,” reads a draft of the bill provided by the governor’s office. Mr. Kulongoski said he plans to submit it to the Oregon legislature in January.
The certificates could prove both a selling point for owners of energy-efficient buildings and a boon to homebuyers by providing a basis for lower mortgage and insurance rates tied to efficiency.
But they could also become an encumbrance to owners trying to sell old or drafty homes, for whom a low rating could look like a defect.
The bill is likely to face some resistance from the Oregon Home Builders Association and the Oregon Realtors Association. The industry lobbies generally support a voluntary program, but are opposed to a state mandate.
Gov. Ted Kulongoski says every Oregon home buyer has the right to know the energy efficiency of a prospective purchase. (Photo: Bloomberg)
Jon Chandler, chief executive of the Oregon Homebuilders Association called mandatory certificates “silly.”
“It’s an educational tool,” Mr. Chandler said. “It doesn’t do anything for energy efficiency one way or another.” Nonetheless, he added, “We’re gearing up for the mandate. We’d like to position ourselves to do the contracting work.”
The proposed bill directs the Oregon Department of Energy to design a home energy rating system, similar to the miles-per-gallon rating on cars.
The basis for such a system might well come from Earth Advantage, a nonprofit sustainable building organization based in Portland. That group has already developed a national certification program for new construction, and it has been working on an efficiency rating program modeled after one in Great Britain, which began requiring certificates for all residential real estate transactions nationwide on Oct. 1.
The Energy Trust of Oregon, an independent nonprofit group created by the Oregon Public Utility Commission and charged with “encouraging energy market transformation” in the state, according to its Web site, is using the Earth Advantage rating system in a pilot project involving 200 Portland homes. The aim is to find the fastest and cheapest way of performing energy audits and issuing certificates for homeowners.
Testing ends this month and the Energy Trust says it will report the results early next year.
“Hopefully this program will serve as a model for the state and the country,” said Kendall Youngblood, a residential sector manager for the Energy Trust. “We’re designing it as an education piece for the homeowner, so they start to understand homes are associated with carbon emissions.”
Other states, including California and Minnesota already have similar voluntary certification programs that use the U.S. Department of Energy and Environmental Protection Agency Home Energy Rating System. Homes are scored between 0 and 100 on an index relative to a model Energy Star home.
The Earth Advantage program would go a few steps further, providing bars that depict a home’s actual energy use, utility costs and carbon dioxide emissions.

Good Morning Arizona!

Going Green in Arizona with Flir Infrared Cameras


Geary Morris & Jerry Lawrence of American Infrared Consultants meet Javier Soto at Dan Davis's home to do an early morning Thermal Scan and find the leaks in his air ducts. Be sure to check out the latest Flir Infrared Cameras and the many applications for them at our web site Go-Infrared.com

Going Green with Jane Poynter

Go Infrared is Featured on NBC KVOA Channel 4
with Jane Poynter


Geary Morris & Kyle Morris of American Infrared Consultants, visited Jane Poynter's home to do a "Thermal Scan" and find the leaks that she, or most any homeowner can mostly fix themselves. We are using a Flir Systems T-400 and a P-640 in this video. Be sure to check out the latest in cameras and the many applications for Infrared Thermal Imaging on our web site - Go-Infrared.com

Home Inspectors Go Infrared & Save Their Customers Thousands in Energy Loss

Flemming Lund, owner of Infrared Diagnostic in Sudbury, conducts an energy audit.

**He's using a Flir Systems infrared camera!

SUDBURY, Mass. —

Hearing the demand to reduce escalating energy costs for homeowners and small businesses, Flemming Lund three years ago added infrared energy audits to his home inspection business, Apex Home Inspections.

That service has since become a company, Infrared Diagnostic. The Sudbury firm now conducts five energy audits for every home inspection Lund performs at Apex.

"I saw the need, got the training, purchased new equipment to detect insulation defects and holes where air enters the home and that got the ball rolling," said Lund.

Some of the air leaks - such as in recessed lighting - surprise some clients, including a Lincoln homeowner.

"Because of the opening to the outside, air rises out through the leaks," said Lund. Infrared Diagnostic performed the audit on the newer Lincoln home with 75 recessed lights.

"The house was like a sieve because there were so many penetrations in the ceiling," said Lund. "The homeowner could not keep heat in the house. He knew he had a problem, but he couldn’t figure it out. You can have two feet of insulation but if there is a possibility of air coming in, it penetrates right through the fibers."

Causes of other air leaks include plumbing penetrations, such as a vent stack that goes through the roof or a pull-down stairway in the attic.

Lund conducts the infrared energy audits and recommends contractors, who do the work. In addition to reduced energy costs, Lund said there’s another benefit to the audits.

"Once the suggested work is completed and drafts are eliminated, customers gain an increased comfort level in their homes during the heating and cooling seasons," he said.

Many Infrared Diagnostic clients chose an energy audit to get the best return on their investments when trying to reduce their energy costs. For example, a family requested an energy audit for a local home built around 1880. Cost of the audit on the 3,300-square-foot home: $525. Estimated savings on utility bills: $1,500 to $2,500 annually. The cost of energy audits are based on the age and square footage of the home.

"It’s a huge savings compared to the audit," said Lund, who is also an electrician and certified home inspector in Massachusetts. "Installing insulation and correcting air leaks gives the biggest return on investments - bigger than windows."

With every energy audit, Infrared Diagnostic provides a report with recommendations that often result in 15 to 25 percent energy savings annually. "Windows are expensive to replace, but in most cases they are not the main problem," said Lund. "Air leaks are. Many homeowners are not aware of how small the investment is to see a decrease in their utility bills."

The energy audits, Lund said, are more comprehensive than others because of the equipment he uses - a blower door test for locating air leaks and an infrared camera for detecting missing or defective insulation.

Jan Hackman called the energy audit conducted on his Hudson home "priceless."

Infrared Diagnostic performed the audit on Hackman’s 3,200-square-foot L-shaped ranch, built in 1963 with an addition put on in 1989.

"We wanted to know why we use so much energy," said Hackman. "A previous energy audit we had done left us with many questions. They told us the windows lost a lot of heat, which was not the case, Flemming’s audit showed. I wanted someone with expertise to start me on the path to get the best return on my investment.

"In the infrared audit, the windows turned out to be pretty efficient and Flemming found problems with air leaks, insulation and the like. For me, it was an eyeopener - here are the cold hard facts. Now we can start doing something about them."

Infrared Diagnostic’s report included a series of digital and infrared photographs with an explanation of different problems, including air leaks in the cathedral ceiling. "Apparently the insulation, where it touched the rafters, must have been pushed aside," said Hackman. "In one case, it showed a temperature of 39 degrees."

Infrared Diagnostic also detected leaks by the chimney in the attic, in the basement where the foundation meets the frame and in the recessed lights in the kitchen, said Hackman.

"The audit, which cost about $300, gave us a blueprint on what to do and where to go next," said Hackman. "The house will be a lot more comfortable."

For more information, visit infrareddiagnostic.com. or call 508-353-2381.

Green Building Litigation is Right Around the Corner

The Anatomy of America’s First Green Building Litigation

Stephen Del Percio

August 20th, 2008 • Related • Filed Under

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• Brookhaven National Laboratory Awarded Long Island’s First LEED Silver Rating
• JetBlue’s Terminal 5 at Kennedy Airport: Green But No LEED
• Galapagos Art Space Opens Green Doors in Dumbo
• HSBC Close to Joining Silverstein at LEED Gold 7 World Trade Center
• Your Luxury Amenities May Be Trying to Kill You
• Upper West Side’s First Green Condo Complete on 72nd Street
• NBBJ Earns Manhattan’s Ninth LEED-CI Rating at 2 Rector Street
• Industry Groups Launch Legal Challenge to Albuquerque Green Building Codes

Filed Under: Green Building • Green Business Law • Green Construction • Green Liability • Most Recent • green building law • green construction law

Tags: AIA documents • construction contracts • green building case law • green building contract documents • green building contracts • green building insurance • green building law • green building lawyer • green building tax incentives • green construction law • green design • green liability • green real estate lawyer • green risk management • LEED • LEED lawsuit • LEED lawyer • LEED litigation • New York City construction attorney • USGBC

We’ve written extensively here at gbNYC about the potential for litigation arising out of green construction projects. To date the issue has been on the radar screens of numerous industry authors, but real-life application of green legal theory has been relatively difficult to come by outside of a handful of green-related claims reported by insurance carriers. However, a (relatively) recent lawsuit that was filed on the eastern shore of Maryland demonstrates that green building risk is real- particularly in light of rapidly increasing regulatory activity at the state and local levels. The suit suggests the critical importance of clear contract language for each stakeholder on a green construction project and posits that the alternative could be massive exposure to unanticipated liability for every project participant.

Background to the Lawsuit

The lawsuit in question grew out of the construction of a $7.5 million, 23-unit condominium project in Crisfield, Maryland called the Captain’s Galley, which was completed back in 2006. The development is adjacent to a local marina on the Chesapeake Bay and includes a number of green design features that were intended to support an application to USGBC for a LEED Silver rating. Southern Builders, the general contractor on the job, filed a $54,000.00 mechanic’s lien against the project late in 2006. In early 2007, a Maryland Circuit Court both reduced the lien to $12,000.00 and consolidated a related $1.3 million countersuit initiated by the owner Shaw Development that sought, among other things, $635,000.00 in what Shaw claimed were lost tax credits under a state-level green building program.

The Tax Credits at Issue

A brief overview of Maryland’s green building tax credit program is necessary in order to understand how Shaw crafted its counterclaim against the contractor.

Maryland offers state tax credits of up to 8 percent of a project’s total cost for buildings greater than 20,000 square feet. (As a side note, the current iteration of the program has doled out all of the available tax credits and is not currently accepting additional applications). Only LEED projects are eligible to apply for the credits. The program requires applicants to first submit an Initial Credit Certificate Application to the Maryland Energy Administration.

MEA reviews the application and issues an Initial Credit Certificate which sets forth the project’s maximum credit amount and (critically for our purposes) sets an expiration date by which the project must receive a Final Credit Certificate.

Projects can only apply for the Final Credit Certificate upon receiving a certificate of occupancy after construction is complete, and a LEED-AP must submit an Eligibility Certificate to MEA stating that the building meets the criteria necessary to receive the tax credit (i.e., it meets the requirements to qualify for a LEED Silver rating). However, if the Initial Credit Certificate expires prior to the project obtaining its Final Credit Certificate, the available credits are put back into the program’s pool, the project slides back in line, and must reapply to MEA.

Captain’s Galley Contract Documents

The contract documents set forth the project’s LEED requirements in a specification section (it’s unclear exactly how those requirements were delineated, other than language in the project manual which stated that the project was “designed to comply with a Silver Certification Level according to the USGBC’s LEED Rating System, as specified in Division 1 [of the specifications.]”) It does not appear that there was language in the contract documents obligating Southern to secure any formal certification from USGBC. With respect to the tax credits, although the credits were not identified specifically in the contract (which was the AIA’s 1997 version of the A101 Owner/Contractor Agreement) or any of its attachments that were included in Shaw’s countersuit papers, Southern was required to deliver a Certificate of Occupancy within 336 calendar days from the date of the agreement.

Shaw’s Countersuit

In the countersuit, Shaw alleged claims in both negligence and breach of contract against Southern for, among other failures, the contractor’s failure to “construct an environmentally sound ‘green building’ in conformance with the LEED rating system.” However, there was no detail in Shaw’s papers describing precisely how Southern was responsible for the $635,000.00 in lost tax credits. Presumably, Southern failed to deliver the project to Shaw such that the latter could obtain a certificate of occupancy by the date specified in the Initial Credit Certificate; according to Shaw’s papers, the project remained incomplete “[n]early nine (9) months after the required completion date” (i.e., the 336 calendars specified in the A101). In addition to recovery for the lost tax credits, Shaw also sought damages for non-conforming work and loan defaults with its construction lender. The total amount in damages that Shaw sought was approximately $1.3 million. The damages it sought for the lost tax credits were the largest under any of its claims.

The Result & What Could Have Happened

Other than a few newspaper articles that mentioned the delays at the project, there has been nothing written about what appears to have been the country’s first green building litigation. Though the Circuit Court judge did set the case for trial sometime in August of 2007, it appears that the matter has since settled out of court.

The twist in the factual posture of the case is that the allegations were not that the contractor (or a design professional or consultant) failed to secure formal certification from USGBC, as much of the literature written to date in the liability context suggests will be the feeding ground for potential litigation. Rather, it was the failure by both the owner and the contractor to recognize the risk implicated by the regulatory scheme that led to the claimed loss of tax credits. The contract documents included as exhibits to the court papers were devoid of any risk transfer mechanisms whatsoever with respect to securing the tax credits. A tight contract that recognized the risk of failing to complete the project on schedule would have (1) assisted the contractor in determining whether it was capable of bearing a significant portion of that risk and (2) provided the owner some level of assurance that in the event the contractor could not deliver the project as required in order to secure the tax credits, it would still have the ability to assert a breach of contract claim for that specific failure.

Form Contracts Won’t Fly! gbNYC’s Top 5 Legal Issues for Green Construction Projects in Action

The critical lesson from the lawsuit is that there is no one-size-fits-all form agreement for a green construction project. The case also demonstrates the absolute necessity of two of my five most important legal issues to consider on green construction projects. First, a thorough understanding of existing legislation that may apply to a green project is critical. Retaining counsel that understands the regulatory landscape and can assist stakeholders in managing the risk that it implicates, regardless of which side of the table they may find themselves, is key. This point is becoming increasingly salient as more municipalities legislate green initiatives and third-party rating systems continue to evolve and proliferate. Second, the possible failure on the contractor’s part (and probably the owner’s as well) to translate the procedure for securing the LEED-driven tax credits into the contract documents exposed both sides to unanticipated liability. Indeed, the lack of any disclaiming language in the contract- or any indication that the contractor attempted to shift some of the risk off of itself- is perhaps indicative of where green liability may actually exist.

Conclusion: Insurance & Other Implications Moving Forward

Sustainability is changing the risk management equation and the Shaw case will likely go down as just the very tip of the iceberg. Again, the lawsuit demonstrates the danger for contractors, owners, and design professionals to simply rely on form construction agreements on green projects. Although the claim was asserted by the contractor, a slight twist in the facts could have just as easily resulted in the suit being asserted against the architect, engineer, or LEED consultant. While owners obviously want to get their projects out of the ground as quickly as possible, and given the deteriorating economic conditions here in the U.S., contractors and design professionals may feel pressure to sign up for work quickly, Shaw Development v. Southern Builders teaches caution during the course of negotiations for green construction work.

The lawsuit also raises some important insurance implications. Could the contractor’s commercial general liability policy have provided coverage for the owner’s claim for the lost tax credits? CGL policies typically only cover property damage, so it seems highly unlikely. From the owner’s perspective, if there was a waiver of consequential damages provision in the contract documents (which is unclear from the Shaw court papers), the owner would have a difficult time arguing that its claimed damages for the lost tax credits should not be considered consequential.

The potential lack of insurance coverage for this type of claim demands its own discussion, but it suffices to say that the insurance industry is examining these issues closely to determine whether an endorsement for green projects might be necessary. In fact, a recent report prepared by Marsh called The Green Built Environment in the United States: The State of the Insurance Marketplace evaluated not only property insurance policies, but how the insurance industry is considering professional liability, pollution liability, builder’s and owner’s risk insurance, surety bonds, and casualty coverage in the context of green risk management.

Please let me know if you’d like more information on the case and I’d be happy to pass along the materials that I was able to dig up online. Feel free to chime in below if there are any other legal issues arising out of the Shaw fact pattern that deserve discussion.