Don Ferrier of Ferrier Custom Homes in Fort Worth, Texas; Matt Belcher of Belcher Homes in St. Louis and David Jaffe, NAHB staff vice president for Construction Liability and Legal Research, discussed the myths, realities, obstacles and potential for liabilities for builders incorporating green practices into their business.

Both home builders and home buyers are understandably nervous about moving toward green building, and there are many misunderstandings about what it means, conference participants said.

People think it’s just a fad, it costs too much, very few customers are willing to pay the difference or it’s too complicated. However, Ferrier said, building green is a “groundswell,” and his business proves there are a growing number of consumers who are ready to invest in building green.

You can start with a few inexpensive green components, Ferrier said, and “keep learning and educating to move to deeper waters.” Customers need to know that green building is saving not only energy, but also water, resources and money.

As manufacturers begin to cater to the green market and provide new products, they must train their suppliers and sales staff with new – and appropriate --  information. When they make “greener, better, healthier” product claims, there are risks, resulting in a growing body of liability and legal issues.

There may be legal professionals looking at green building liability lawsuits and seeing dollar signs. “You can bet there are attorneys watching the green movement and making [the case for] a business opportunity,” Jaffe said.

Belcher advised builders to organize a green team and get them on the same page. Educate contractors, suppliers and mechanical trade people in the field, he said. More consumers are educating themselves through the Internet and other media, then going to the builder with specific requests and questions, he added. Builders should be prepared.

Builders should go green with a little caution, both builders advised. Customers may come to them and ask for an “all green” house. But there has to be a dialogue between the builder and customer. Ask: What is green to you? What is your budget? Then, the veteran builders said, the house can be as green as a consumer’s budget allows.

For example: Installation of a complete solar-powered electrical generating system is costly right now. But even as energy prices keep climbing, the technology improves and the cost of photovoltaic panels will eventually fall. Pre-wire the house now for future solar, an inexpensive way to gain points under the National Green Building Program rating system.

Avoid Needless Liability Concerns with Contract Provisions

With multiple green products come multiple – and sometimes competing – warranties, Jaffe said. When putting multiple green components in a home, make sure the products work together in the home as a whole.

“The house is a system, not individual components,” he said. Builders should understand the manufacturer’s warranty and make sure there is some third-party verification rather than solely relying on the company claim. 

Builders should consider additions and alterations to their contracts, too.

• Before using the word “green” in the contract, make sure it is defined to the specifications of the builder and home buyer.
  
  
• Specify how delays in the building or inspection process are handled when there is a problem of the availability of green materials.
  
  
• Specify what to do with possible “mismatched expectations” of the home owner versus the builder (indoor environmental quality, comfort, etc.)
  
  
• Include information on maintenance required on green-certified products.
  
  
• Specify restrictions and special inspections on green components.

Overall, home buyers are looking for an advocate for what green features are best for their home. They want to use the builder as a resource, so it is important for the builder to be educated on going green, the speakers emphasized.

The audio seminar was sponsored by NAHB’s University of Housing, Business Management and Information Technology Committee and National Green Building Program. It was worth one hour of continuing education credit toward a number of NAHB University of Housing designations, including the Certified Green Professional designation.

The downloadable audio file and presentation materials are available at a cost of $145. Purchase them at www.nahb.org/Education/Audio or contact Agustín Cruz, Executive Director of the NAHB Business Management Department, at 800-368-5242,  ext. 8472.