Christopher G. Hill (@constructionlaw) is lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC, a LEED AP. Mr. Hill has been nominated and elected by his peers to Virginia’s Legal Elite in the Construction Law category on multiple occasions. He specializes in mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.  Mr. Hill authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals.  Additionally, Mr. Hill is active in the Associated General Contractors of Virginia and the Construction Law and Public Contracts Section of the Virginia State Bar.

First of all, thanks to Michael for the opportunity to guest post. Please check out his post at Construction Law Musings here.

Lately, there has been a lot of news in the green building world relating to law suits and other liability nightmares relating to green building. The Destiny USA debacle relating to the green bonds program and the failure of a contractor to meet its sustainable building promises is one major issue. Another is the collapse of the Chesapeake Bay Foundation HQ in Maryland. All of this sudden liability related activity in the sustainable building area of construction could lead to two possible outcomes.

The first of these outcomes is the doomsday scenario. To wit (yes I said that, I am an attorney after all), the wonderful momentum built up over the last few years will come to a screeching, and unfortunate halt. Despite my Eeyore like tendencies and related posts on the subject, this is the worst possible outcome. Sustainable building is a great idea, liability concerns aside. To stop now because of issues that have always existed, yet have just recently reared their ugly heads would be a mistake.

The second, and healthier (in many ways) outcome is a learning curve and the use of these solid examples to assure that these types of outcomes do not repeat. Smarter folks than I have been screaming from the rooftops that such outcomes could occur if not taken into consideration. The problem has always been that no concrete examples had been available until now.

With these concrete examples we can now examine and better plan for the range of outcomes in a manner that is not merely the speculation of green building attorneys and other advocates who can be written off as a group of chicken littles. My hope is that, far from derailing the entire enterprise, those of us who advocate green building will learn and plan in a manner that can make green building sustainable for the future in a relatively liability free manner.

Of course, in an uncertain world, no such assurance is possible, but we can sure try.

green building, construction law, liability

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A couple of weeks ago a chap named Jim Wright wrote a post in his blog titled America: You Keep Using That Word. It went viral. In a followup Jim asked a very good question: So, what do you love about America? No, not as in the usual banal patriotic platitudes that flow so easily from our lips. What makes America a place you would die for? That was his question. And as Jim is a fellow veteran, I must assume he knows something about the question he’s asking, since like all vets, he chose to put it on the line, if needs be, when he swore his oath to flag and country.

I would imagine that for some, trying to discover something about America within themselves that would cause them to lay down their life for their country was difficult. For me, it was actually rather easy.

America loves a good fight. We love to argue and we’ll argue about almost anything. We’ll argue with the last call the ref made at our kid’s ball game. We’ll argue about where the neighborhood skate park should go, how big it should be, what it should look like. Hell, we’ll even argue over what color to paint it. We’ll argue over road repairs, sewer updates, the kinds of trees the city should plant along the roads; we’ll argue with cops and shop owners and our own government. And when we really get cracking, we’ll even throw the bums out – even if that bum happens to be our president. It wasn’t too long ago that some of these fights got physical. A little over a century ago there were actually duels fought right in the Senate Chamber! Duels amongst Senate or House members out on the grounds were not uncommon, and they were legal.

And yet, for all of that, we’re still a nation. I’ll never forget Congressman Tip O’Neil’s comment as President Nixon got on Marine One to leave the White House for the last time. We just impeached a president. The leader of the most powerful nation on earth. And yet there was no gun fire, no riots, and no military coupe. (I’m paraphrasing, I’m sorry. I don’t remember the quote.)

For all our love of a good fight, for all our differences great and small, in the end, somewhere deep down in side know we are one and the same thing: We’re Americans. And I don’t know that there has been another group of people quite like us, who will happily fight and argue amongst ourselves until we’re blue in the face, and yet still stick together like glue when things get tough, since classical Greece.

Yes, it’s true that almost all modern countries now give their citizens a right to politically express themselves. But here, we enshrined it our Constitution. We consider the right to express our opinion, individually and in groups, almost as sacred as life’s breath. And the gods be damned should anyone try to abridge that right! A case in point was the Supreme Court’s recent decision to uphold a church’s right to picket veteran’s funerals. What that little fundamentalist church was doing to those families was horrible. The nation was outraged by their behavior. But I don’t know anybody who couldn’t just shake their head at the Court’s dilemma. They knew the court had no choice. They didn’t like it, but they understood it.

We may not like what that other idiot says. In fact, we may just go punch him in the nose over it. But by god, we’ll fight you to the death if you try to take away his right to say it.

And that, my friends is worth fighting for. That rare gift is worth dying for. That’s what I love about this loud mouthed, scrappy, hard nosed, belligerent country we named the United States of America.

As green building increases in popularity, the importance of good and reliable certification programs also increases. Some would argue that they already exist. I partially agree. Despite the popularity of some programs, I see major flaws in the existing programs. Some flaws are the exact same ones that exist in the normal building inspection process. Others, while epidemic amongst green building certification programs, are less common in the non-profit sector as a whole.

The Fox Guards The Hen House

One major problem with green certification programs is that these non-profit corporations function exactly like for profit corporations. They lobby legislatures to pass laws forcing citizens to use their programs, programs that those citizens have to pay for either directly, as an added project cost, or indirectly as tax payers. (The latter meaning the legislature pays for the program, usually through a rebate program funded by tax dollars or bonds, a cost that still comes back to the citizens.) They charge building owners to pay to enter the program; they require inspectors to pay to go through their training program; and they often hold the purse strings to the property owner’s receipt of monetary benefits (cash rebates or lower interest rates or whatever) for building or renovating green. In some cases they’re empowered to hold the monetary hammer over the contractor’s head, preventing him or her from being paid a bonus until they’re satisfied. Each program is a veritable cash cow for the non-profit. Especially if they can get the program legitimized or mandated by some state legislature – or better yet, a federal agency.

Which brings us to the second problem: The fox guards the hen house. The same non-profit that develops the certification program is the one lobbying for it, providing training certification (a certification that must be regularly renewed, of course), and is responsible for quality control of its own program. It’s an internal system with no external checks and balances. Buyer beware!

A Suite of Solutions

Non-Profits Should Act Like Non-Profits: I spent nearly twenty years on the boards of directors of various non-profit corporations, usually in the capacity of an executive officer of some sort. Some of the non-profits were funded primarily by foundation grants, others by memberships through annual dues. Had we, as a board of directors, attempted to act like the green building certification non-profits and develop an income producing product, our funders would have probably had a fit. Yes, depending on the exact type of 501c3 being created it can be legally done. But in my twenty years of experience in the non-profit community, selling products and services like a for-profit was considered very bad form, at least, and down right rude, at worst.

Green building non-profits could do themselves a world of good by acting a lot more like the Corporation for Public Broadcasting and a lot less like Goldman Sachs. Fund your programs the way everyone else does: Via grants and membership dues from the construction industry, not by charging every home owner who wants a certification and every contractor who wants training thousands of dollars. While it might be reasonable, and even good policy, to ask home owners and contractors to become members, those annual dues should be less than three digits. Don’t even talk about making them four digits.

Use Third Party Verifiers and Certifiers: Let’s get the fox out of the hen house, shall we? Program compliance inspectors should be completely independent of both the certifying non-profit and the architectural/engineering/construction (AEC) team. And it is they, not the program creator, that should determine whether or not a project complies with the terms of the certification program being sought – and at what level. Ideally the program inspector will have been brought in on the project early, and so on one level they are as much partner as an inspector. But that is, in my opinion, all to the good. Green certification verifiers are not building department inspectors. They serve a different purpose amongst a group of professionals who, in theory, are all trying to achieve the same goal for the customer.

Certifiers/Inspectors Should Be AEC Professionals: Building science is, well, a science. It takes training, education, and experience to master, and there’s always something new to learn. The notion that you can take some random green activist off the street, put them through a class on some green building certification program or other, and suddenly they’re a ‘building professional’ is rather disturbing. If you’re not a licensed architect, engineer, or contractor, you probably don’t a sufficient background in the building sciences to be an inspector/certifier. In fact, I’ll even go one step further: I think the day is coming when inspectors will have to be specialized, just like contractors and engineers, in order to stay up to date in their field.

Program Creators Should Be Prevented From Lobbying: I know. I’m dreaming, right? If we can’t keep the CEO of GE out of the Oval Office, how can we expect to keep BPI out of Congress? But I’ll continue to dream, if you don’t mind.

It’s A Matter of Trust

Contractors are, of a necessity, a distrustful bunch. They have their ways of doings things. Ways they’ve built up year after year. It may not be the right way – or maybe it is. But one thing is certain: It’s the way they’ve found that doesn’t fail a building department inspection or create call backs. So when it comes to asking a contractor, whose profit margins are already low, to change his ways, the one asking better have some ‘cred’. And you don’t have to wade through too many construction forums to discover that most current green building programs are, to put it mildly, disliked.

Non-profit used to be about public service, about charity, about improving society by solving problems that the for-profits can’t, or won’t solve. They weren’t about making money or market share. They were about getting in and helping folks help themselves. It’s that selfless public service component that gives the non-profit sector a lot of its credibility and makes it a powerful force for good in our society. The sooner green building non-profits get back to those basics by acting like they really care about the building industry and our society, rather than their pocketbook, the sooner they’ll be embraced by the industry they’re trying to change.

I was cruising my local Craigslist the other day and noticed a few adds by “handyman” types who were peddling their fix-it-all services for as little as $8/hour. Now, I realize that things are bad in my local area. Official unemployment figures for our area are several points higher than the State overall, which in turn is higher than the National numbers. But…  $8/hour? Really?

Some readers may remember my article from a few years ago entitled He Can’t Do It For That where I point out the potential problems customers can find themselves in when hiring someone who doesn’t know the difference between running a business and working for wages. Now, some may say, there’s a big difference between hiring a contractor for a major job and hiring someone for a small job like changing a light fixture of fixing a leaky toilet. Thing is, the rules of running a business don’t care how large the ticket price is. They remain the same.

Consider, if these folks are charging you, the customer, $8/hour to work, then here in California their “take home pay” is going to roughly $4/hour (the cost of payroll runs nearly 50% of wages paid here in California, and unlike employees, the self-employed have to pay it all themselves). Out of that $4/hour they have to pay for the gas and upkeep on the truck that brought them to your house, they have to pay maintenance and upkeep on the tools, they have to keep their truck stocked with the long laundry list of consumables that you, the customer, never get charged for like plumbers putty, pipe dope, tape, screw caps, screws, nails, saw blades, sand paper, solvents, rags, hand cleaner, and so on. And we haven’t even touched the “back office” overhead that even a one-truck Johnny has in the way of forms, bookkeeping, sales and income tax, and what not. So, after all of that, what would be left?

Let’s work a simple example: I’ll pretend to be one of these folks. Let’s say I come to your house to reset your leaky toilet. You’re 10 miles away and my work truck gets 14 miles per gallon (about what a Toyota Tundra gets). I show up. The clock is running.

• Once the toilet is up I discover that the seals on the supply line are shot. You’ll need a new one.
• I head to the hardware store to get you one. I’m working for only $8/hour dude, the clock is still running.
• The hardware store is 3 miles away. That’s a 6 mile round trip.
• I get back, reset the toilet with a new wax seal, hook up your new supply line, and I’m done.
• Total time for the job? Let’s be generous (to me) and say 90 minutes. An hour and a half.

So you own me $12 for my labor. Assuming I’m smart enough to mark up the wax bowl seal and the supply line, I might make another $2 there. So my gross income on the job is $14. After the tax man takes his cut, I’ve made $7. That’s $4.67/hour! Half of minimum wage! I ran my truck 26 miles total to do your job and get back home. At 14 mpg on my truck I burned 1.9 gallons of gas. Our local gas price (as of this writing) is $4.15/gallon, so the gas I burned in my truck cost me $7.89.

So already, without even figuring in overhead costs on my truck for things like insurance, lube oil and filters, tires, and so on, I’m in the hole. And I haven’t even begun to touch the cost of tools or consumables! (How many rags did I go through in lifting that toilet, for example? Or, did I have to add screws to the closet flange because it was loose?) And we’re not touching the cost of bookkeeping and accounting.

Now, ask yourself: What if something had gone wrong? What if I had dropped the toilet tank and cracked it? I owe you a new tank, if I can find one. Probably I’d have to buy you a new toilet. A cheap toilet runs $100. I’m working at a loss; do you really think I’ve got the resources to buy you even a cheap $100 toilet, never mind the nice one I just broke that probably cost 4 times that?

Unlikely!

Or, what if I had no idea what I was doing and totally screwed up the job? I’m working for (roughly) 1/8th the rate a licensed plumber works for, after all. So the probability I’m at least partially clueless is very good.

And because I, in this fictitious example, am unlicensed and unbonded, if something does go wrong you really have no recourse against me other than small claims court. But even if you won your case – and you probably would – your chances of collecting on the judgment are very small.  You didn’t hired a legitimate business working on a legitimate business model that allows a margin of profit to accumulate to cover little jobsite contingencies such as a broken toilet. You hired someone whose gross labor rate doesn’t even cover the bare costs of running the business, never mind leaving any money to take home to the family.

But that’s the very real risk you take when you hire a non-professional to work for you at or below minimum wage.

handyman, repairs

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