BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
What is “Green?”
Q: I am listing a newly-built home and the builder/seller wants me to advertise it as a “green” building. I am not sure what that means. I do not want to advertise something that vague. How do I advertise this property?
A: That is a good, and timely, question. With the increase in awareness of the home-buying public of environmental issues, sellers want to emphasize the “green-ness” of the property. But there is no generally accepted meaning of the word “green.” Much like the word “organic,” the word “green” gets stretched to an almost meaningless marketing term.
You are wise to look behind the seller’s request and to tailor your advertising to something more specific than labeling the property a “green” building.
Green building practices aim to reduce the environmental impact of buildings, including energy efficiency, water efficiency, enhanced indoor air quality, and the use of products and materials that were manufactured, and can be disposed of, with minimal environmental impact.
According to the federal EPA, a “Green” building (which is also referred to as “green construction” or “sustainable building”) refers to a structure, its construction and use, that is environmentally responsible and resource-efficient throughout a building's life-cycle: from design through construction, operation, maintenance, renovation, and ultimately demolition.
GREEN BUILDING STANDARDS
1. California Building Standards Commission: The California Building Standards Commission (“CBSC”), along with other state agencies, is in the process of developing green building standards that will reduce greenhouse gas emissions from structures. The 2010 California Green Building Standards (CALGreen) Code is a code, effective as of January 1, 2011, with mandatory requirements for new residential and nonresidential buildings (including buildings for retail, office, public schools and hospitals) throughout California. The Commission is continuing to work with state agencies and others to develop a comprehensive set of further mandatory provisions to be added to this code. So, this is a work in progress that will affect home construction in the future. This very lengthy code can be found in the CBSC website.
2. Leadership in Energy & Environmental Design (LEED): Developed by the U. S. Green Building Council (USGBC), LEED is intended to provide building owners and operators a methodology for identifying and implementing measurable green building design, construction, operation and maintenance processes. It is an internationally recognized green building certification system which provides an objective third-party rating system that a building was designed and built using methods and materials to improve environmental sensitivity, increase energy and water efficiency, reduce carbon dioxide emissions, improve indoor environmental quality, and encourage responsible use of resources and materials.
PRACTICE TIPS:
1. Don’t advertise that a building is a “green” building. That term is too generic and subject to interpretation so as to lead a buyer to expect that the building complies with ALL of the various ways a building can be built to one of the accepted green standards. In other words, it could be alleged to be a misrepresentation.
2. Instead, advertise that the home has “green” features as, for example, dual/triple pane windows, drip irrigation system, heat recovery system, a Home Energy Rating System (HERS) rating, etc.
3. Ask the seller to provide this information to you in writing. Then advertise:
“Seller states that the home has such “green” features as _______________________.”
If that information later turns out to be incorrect, it is the seller who properly has the responsibility.
4. Get trained to receive NAR’s “Green Designation.” Many homebuyers are expressing interest in environmental issues and green homes. This can be a good market differentiator to set you apart from agents who do not have that designation. In conjunction with the Green Resource Council, NAR has developed a series of mandatory and elective courses that leads to a “Green Designation.’’ Green Designation agents are then a member of the Green Resources Council at a cost of $99 per year.
For information on this Green Designation go to:
http://www.greenresourcecouncil.org/how_to_get_nars_green_designation.cfm
DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2011 4/22/11