Green Building & Environmental Trends : Green Building & Construction LEED AP Consulting : Rich Cartlidge : Environmental Trends, Urban Development

I have often written about the environmental benefits of green buildings. However, this past week the Los Angeles Times published an article addressing how California environmentalists fought to block California from implementing a mandatory green building code. Since 2004 all new state buildings in California have been required to obtain LEED Silver certification. The Governor of California in an effort to further green building was poised to pass a green building code which would would slash water use, mandate the recycling of construction waste, cut back on polluting materials and step up enforcement of energy efficiency in new homes, schools, hospitals and commercial buildings statewide.  The proponents of the green building code had high hopes and David Wells, executive director of the California Building Standards Commission said: "It is going to change the whole fabric of how buildings are built by integrating green practices into our everyday building code""The rest of the nation will be looking at what we have done." The environmentalists, who one would assume would support such an initiative fought adamantly to block its passage stating that it would create confusion in the marketplace by allowing buildings to be certified without the requirement of third party verification which is required by the USGBC and its LEED certification system. Is this the first of many challenges to be brought by environmental groups that new green building codes essentially will amount to claims of "greenwashing?"

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Several months ago my friend Shari Shapiro wrote a blog post Green Building Litigation--Whither the Lawsuits? Now many builders across the nation are wondering whither the green? An article by the Wall Street Journal, Green Builders Await the Green sheds light on a problem that those of us involved in the green building industry have been acutely aware of for some time...the government is dragging its feet on disbursing the green earmarked for green projects. The General Services Administration was allocated 5.5 Billion dollars under the American Recovery and Reinvestment Act, 2 Billion dollars of which was supposed to be distributed by the end of 2009. Now only two weeks away from the end of the year only 1.5 Billion of that 2 Billion dollars has been distributed! Even more striking, only 89 million dollars has been paid out thus far! So what exactly is taking so long for the green to reach the pipeline?

Are you a contractor who is vying for a part of the 4 Billion dollars that have yet to be allocated? Will 2010 see an explosion of green growth as project currently in the planning stage progress to construction? Will 2010 be the year of green litigation?

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Back in September a Palm Coast ordinance providing for the fast tracking of building permits, relief from permitting fees and  free certification inspection of green buildings by city inspectors hit a roadblock and was tabled. According the the Flagler County News this ordinance was unanimously passed in a modified form this past week. The major sticking point in the original legislation was not resistance to green building itself but rather the provision for unlimited free inspections by city inspectors. The homebuilders group argued that providing unlimited free inspections was going to hurt the business of independent companies who currently provide such services while the city council argued that free inspections would help builders who are currently wary of building green become comfortable with the process. The ordinance is meant to provide an incentive to builders to go green as city manager Jim Landon says: 

"In essence what this does is attempts to not require builders and developers to include more environmentally friendly design, but gives them incentives to do so,"

"We changed the ordinance so we will do one certification per builder with the idea that hopefully they will see some value in continuing that program,"

Are green building incentives and mandates being held up by the market or rather by interest groups who fail to see the bigger picture? Palm Coast is taking steps in the right direction it is a shame to see good legislation being watered down the interests of a small group of independent building inspectors, individuals who presumably want to see green building expand.

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The city of Baltimore is well known for many things, its high murder rate, its rampant crack problem, being the filming location for the HBO program The Wire and perhaps moving into the future as a leader in the green building movement. The Baltimore of today is not the same as the Baltimore I played hockey in just 7 years ago. Patterson Park, the location of the ice rink, a neighborhood where cars were broken into and pocket change was stolen from cup holders, is now a neighborhood full of young professionals and beautifully remodeled homes. In recent years the city has been aggressively promoting green building practices and has now made their support of green building public. In August of 2007 the city implemented Council Bill 07-0602 which was phased in over two years with full compliance required by July 1, 2009. For an excellent discussion of the Bill see Stephen Del Percio's discussion located here.

Unlike legislation in many cities the legislation passed in Baltimore requires both public and private buildings to be built to green standards. However, until years when the city will release its Baltimore specific standards (which will be more flexible than LEED) and aimed at limiting runoff into the Chesapeake, promoting a cooler city through green roofs, and encouraging sustainable transportation alternatives the exact requirements for comply with the legislation are still unclear although a minimum of LEED Silver is required to obtain a building permit (there appears to be no enforcement mechanism for buildings that fail to obtain certification).

While Baltimore may miss the boat on many important issues the following quote from the Baltimore Sun  indicates that the city leaders understand the importance of going green:

"It is important to include private, not only public buildings, because we all share the same resources," such as energy and water, said Andrew B. Frank, first deputy mayor for neighborhood and economic development. And "including the private sector in the green building requirements can elevate the design standard of the entire Baltimore building stock. Residents, organizations, and businesses looking to call Baltimore home will have the assurance that new buildings are built to a standard of excellence in efficiency and health."

In reading the Baltimore Sun article I found it very interesting that the real estate attorney's quoted appear to disfavor green mandates.

Stuart D. Kaplow, also a real estate attorney, said he didn't think the city should be mandating the standards. Developers, he said, are building green because they see the economic benefits. Mandates can deter smaller, more marginal and complex projects and put off developers in general. "The market will drive green building, with a prodding from government," he said.

The city needs to ensure it doesn't chase away investment, said Jon M. Laria, a real estate attorney and a coordinator of the Baltimore Development Workgroup, which represents city real estate professionals. Laria is working with the city on standards and said his community largely supports Baltimore's greening efforts.

"Most developers recognize the societal and even economic benefits of more sustainable development, and it's exciting to work in a city that is paying attention to these issues," he said. "The reason we have concerns about the green building law is that it goes too far too fast, by mandating LEED Silver, or a locally generated equivalent, while providing no incentives."

What do you think? Are green building mandates without an incentive a prod for green building or a barrier? I look forward to your input.

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In the world of politics it is very rare to see a politician who not only understands environmental issues but then also follows through and leads by example. Governor Timothy Kaine of Virginia is one of those rare individuals who is not just full of hot air but rather follows through on his pledges, leads by example and then seeks to make the necessary changes to facilitate sustainable practices for individuals like you and me.This past week Gov. Kaine toured the Virginia Association of Counties headquarters, a building which was constructed in 1866 and entirely renovated to LEED standards. While on the tour Gov. Kaine made the following remarks:

“VaCo has done a tremendous job of making environmental improvements to this historically important building,” says Kaine. “Legislation I signed this year will not only further my Renew Virginia initiative but will make it easier for localities to encourage green construction and green roofing. I hope localities look to the example set by VaCo to provide incentives for the development and deployment of green roofs across Virginia.”

The legislation the Governor refers to is:

• HB 1975 and SB 1058 from Del. Lee Ware and Sen. Mary Margaret Whipple authorizes localities to grant regulatory flexibility and incentives to promote the construction of vegetative roofs and solar roofs on private homes and businesses. The incentives or regulatory flexibility could include a reduction in permit fees when green roofs are used, a streamlined process for the approval of building permits when green roofs are used, or a reduction in any gross receipts tax on green roof contractors as defined by the local ordinance.
   
• HB 1828 from Del. William Fralin allows water authorities to offer rate incentives for vegetative roof construction. The bill also authorizes localities to establish a rate incentive program designed to encourage the use of green roofs in the construction and remodeling of residential and commercial buildings. A locality’s incentives must be based on the percentage of storm water runoff reduction the vegetative roof provides.

What are your local leaders doing to further sustainability?

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Disclaimer: This is not a political post, just my observations about the health care debate and what the green building community can learn from it.

The definition of green building much like that of the term public option in the health care legislation is open to debate. What criteria does a building need to meet in order to be green? Some individuals argue that a building is not a green building unless it obtains certification either by the USGBC or Green Globes or NAHB. While certification does provide a label and verification of a company or individual's achievement it comes with a cost. Federal projects are now required to be build to LEED silver standards. Does requiring LEED certification miss the point?

Much like the health care bill which has people on edge because of their inability to understand its poorly drafted language, individuals often shy away from green building and in particular certification because they are unable to understand it. This past week I spoke with a contractor who is currently involved in several projects and asked him about his experience with green building and LEED specifically. The contractor replied that his buildings were being built or renovated to achieve high levels of water and energy efficiency but that he did not pursue certification because the system was too complex and "wishy washy".

In order to overcome the resistance of individuals to build green or pursue certification it is the responsibility of builders, contractors, attorneys and the USGBC to clarify the system, remove the mystery and inconsistency between credits, and alleviate the fears of those responsible for paying the certification costs that despite their efforts a building will fall short by missing a credit. In its current form LEED certification while very valuable is skeptically viewed by some individuals in the same manner as medical procedures and diagnostic tests performed by doctors. Is it time for green building certification to become outcome based rather than design and construction based?

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Image via MinnPost

Today I realized how utterly dependent we as a country are on our vehicles for transportation. This observation was not made as I sat in a traffic jam or as I waited for a red light to change but rather as I reached into the back seat of my car to grab my gym shoes so that I could go work out. Ok so that doesn't seem so bad right? You are likely saying big deal lots of us drive to the gym...Well the gym in less than a mile from my house and I was going there to run!

It was in that brief moment that I realized not only am I way too dependent on my car but that due in large part to our nation's aging and inefficient transportation system millions of Americans are dependent on theirs as well. While LEED certified buildings place an certain amount of emphasis on public transportation and low or no emission vehicles perhaps it is time for us to urge our leaders to overhaul the American transportation system not only to make it more efficient but to reduce our dependency on cars in the future, to reconnect us with our community through use of public transportation (yes its ok to remove the Ipod, drop the newspaper and actually talk to the people you meet on planes, trains, and buses). and to reduce our carbon footprint.

Rep. Jim Oberstar has proposed a complete transportation overhaul which I will attempt to summarize in several brief bullet points. While this program might seem outlandish at first glance I believe in the big picture it would have a far greater and more lasting impact than wasting billions of dollars on Cash for Clunkers and other such trivial efforts to improve the environment and stimulate the economy. Oberstar's plan is briefly summarized below:

• Terminate more than 75 federal transportation programs
• Boost funding for public transit
• Set aside approximately $50 billion for high speed intercity rail
• Impose annual reporting guidelines and project benchmarks on the states for accountability purposes.
• Eliminate the stop gap injections of cash into the Highway Trust Fund and provide stability and guarantees to states so that longer term projects can be undertaken.

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Image: Via Inhabitat

Recently an article published by Real Estate Rama spoke about how the U.S Conference of Mayors and the USGBC  have urged Congress to appropriate additional funds to study and evaluate the benefits of green schools. H.R. 2187 the 21st Century Green High-Performing Public School Facilities Act will authorize billions of dollars for school repair, renovation and modernization nationwide. The construction, renovation and modernization of these schools will serve as an education for everyone involved in their construction, planning, operation and use. While we are all familiar with the litigation that has arisen from school construction projects in the past these new green renovations pose the potential for both great success and great liability. A green school offers numerous benefits such as a healthier learning environment but if the proper steps are not taken the potential for mold and other problems is great. Will your children be educated in the schools of tomorrow or in the same crowded, flourescent lit school of my childhood?

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This past Monday  (6/1/09) Florida Governor Charlie Crist signed Senate Bill 360. The Bill which has been widely criticized as a disaster for the environment amends the growth management statutes and eliminates the provisions calling for review of Developments of Regional Impact (DRI) and the transportation and sewer concurrency requirements in addition to the requirement that developers pay for road improvements. Governor Crist has been criticized as selling the environment to developers in hopes of securing financing for his Senate campaign. Much of the criticism focuses on environmental concerns which are of little consequence. Critics claim that the state will lose valuable wetlands; however, last time I checked wetlands were controlled by Federal legislation and any development that will destroy or adversely affect a wetland must first be cleared by the Army Corp of Engineers.

While the Bill may slightly increase urban sprawl it will affect only those areas which are already experiencing growth, the density requirement of 1000 people per square mile is far from the density required for sustainable development but it is important to note that the Bill is intended to jump start the construction industry within Florida. The Bill also aims to provide incentives for "green" building. While there is currently a substantial built housing inventory in the state it is my hope that this Bill will help clear the hurdles and red tape encountered by higher density mixed use and sustainable communities and will ultimately encourage responsible development within the state.

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Climate change is a hotly debated issue with some individuals proclaiming it is absolute and undeniable and others refusing to believe in its existence. Whether or not you believe in climate change is a personal decision but pollution such as carbon dioxide affects our environment in more ways than one.Pollution from both point sources such as power plants and industrial facilities as well as from mobile sources such as cars, planes, and boats undeniably changes our natural environment for the worst. The pollutants released by these sources include Carbon Dioxide, Carbon Monoxide, Sulfur Dioxide, Ozone, and Particulate Matter which as well as numerous other chemicals. The EPA under the Clean Air Act was required to establish National Ambient Air Quality Standards for the six criteria air pollutants. The recent climate change legislation proposes to add Carbon Dioxide to those substances regulated by the EPA.

How:

There are a variety of means to regulate pollution however the two most popular methods are effluent taxes (taxing each ton of discharge) and cap and  trade (capping total pollution and allowing individuals to trade or purchase credits). I would love to hear your feed back as to which you believe is more effective.

When:

 Right Now! Personally I am not convinced the scientific data on climate change is accurate but at the same time I am not willing to gamble and play the "wait and see" game.

Why:

 Civic responsibility. Each and everyone of us is a guardian and trustee for the health of our planet for future generations. Whether you believe in global warming or not we have a responsibility to leave the planet in the same if not better condition as we inherited it so future generations may continue to enjoy the many wonderful sights, sounds, and experiences it offers.

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Today I am going to be a little unconventional and rather focus on my own thoughts or a current issue I am going to encourage you to check out what some of my friends in the construction,design,legal, and real estate industries are up to. The links below are all excellent resources if you have any interest in this area.

• Chris Hill writes a blog www.constructionlawva.com where he focuses on key legal issues surrounding the construction industry. Chris can be contacted on Twitter @constructionlaw.
• Shari Shapiro writes a blog www.greenbuildinglawblog.com where she focuses on key issues surrounding green construction, land use planning, and current and pending legislation. Shari can be contacted on Twitter @sharishapiro.
• Chris Cheatham writes a blog www.greenbuildinglawupdate.com where he focuses on green building LEEDigation, and legislation. Chris is responsible for motivating me to write this blog and a great resource. Chris can be contacted on Twitter @chrischeatham.
• James Bedell writes a blog www.build2sustain.com where he is seeking to document how energy efficient remodeling can be performed. James can be contacted on Twitter @jamesbedell.
• Vik Duggal, the master mind behind www.konstructr.com is an invaluable resource who brings people involved in all disciplines of the real estate development world together. Vik can be contacted on Twitter @vikdug.
• Stepehen Del Percio writes a blog www.greenbuildingsnyc.com which focuses on green and sustainable projects in NYC. Stephen can be contacted on Twitter @stephendp.

All of these individuals are people I encourage you to connect with, each and every one of them is very knowledgeable, approachable, and a truly valueable resource.

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Photo:zmescience.com

The last several weeks there has been a great deal of discussion centered around the Waxman-Markey Climate Change Legislation and  the EPA's decision to declare Carbon Dioxide a pollutant. However, there has been surprisingly little discussion of what this means for the sustainable construction community.

•  The proposed legislation covers only major polluters. I suggest that major polluters should be issued permits but that any individual or entity which is able to reduce their carbon dioxide emissions beyond a baseline measurement should be able to sell their credits.
• Allowing individuals to sell their reductions to the market achieves several important goals

1. Allowing for the sale of carbon dioxide emission reductions will stimulate the economy by encouraging individuals to make renovations and improvements which make their residence or business more energy efficient.
2. Increasing energy efficiency will in turn reduce the amount of power which must be generated.Since power generating facilities are major polluters this will in turn further reduce carbon dioxide emissions.
3. Allowing the sale of these reductions will put more money into the pockets of individuals who are not covered under the proposed act and will encourage everyone rather than just major polluters to do their part to reduce their reductions.

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Welcome to part two of GBET’s discussion of the proposed Climate Change legislation. Below titles III and IV of the proposed act will be discussed.

Title III: Reducing Global Warming Pollution

·         Global Warming Pollution Reduction Program

o   Establishes a market-based program for reducing global warming pollution from electric utilities, oil companies, large industrial sources, and other entities who are responsible for 85% of U.S. global warming emissions. Covered entities must have tradable federal permits (allowances such as under the Clean Air Act) for each ton of pollution to be emitted. Entities which release less than 25,000 tons of CO₂ per year are not covered. Allowances are to be reduced each year so that there is a 3% reduction below 2005 levels by year 2012, 20% reduction by 2020, 42% reduction by 2030 and an 83% reduction by 2050.

·         Supplemental Pollution Reductions

o   Directs EPA to enter into agreements to prevent international deforestation. By 2020 supplemental reductions are to account for a 10% reduction from the 2005 base level.

·         Offsets

o   Offsets can be obtained to allow for increases above allowances if the total pollution in any year does not exceed 2 Billion tons split evenly between domestic and international offsets. 5 tons of offset credits must be submitted for every 4 tons of emissions being offset.

·         Banking and Borrowing

o   Unlimited banking of allowances may be used for future years. There is a 2 year rolling compliance period allowing entities to borrow from 1 year ahead without penalty.

·         Strategic Reserve

o   EPA is to create a strategic reserve of 2.5 billion allowances. These allowances may be auctioned when prices rise to unexpectedly high levels.

·         Carbon Market Assurance and Oversight

o   The Federal Energy Regulatory Commission is charged with regulating the market, and the President is directed to delegate regulatory authority for the derivatives market to the appropriate agency.

·         Additional Greenhouse Gas Standards

o   EPA is to set emission standards on sources that are not covered by the allowance program. Special programs would be created to regulate HFCs and black carbon.

·         Clean Air Act Exemptions

o   CO₂ may not be regulated as a criteria air pollutant on the basis of their effect on global warming. The new source review component of the clean air act will not be applicable to CO₂.

Title IV: Transitioning to A Clean Energy Economy

·         Ensuring Domestic Competitiveness

o   To avoid putting U.S. manufacturers at a disadvantage the draft authorizes companies in certain industrial sectors to receive rebates to compensate for additional costs incurred under the program. If these rebates are insufficient the President is directed to establish a border adjustment program under which foreign manufacturers would need to hold special allowances for the carbon contained in products entering the U.S.

·         Green Jobs and Worker Transition

o   The Secretary of Education may award grants to colleges and universities to develop curriculum and training programs that prepare students for careers in renewable energy, energy efficiency, and other forms of climate change mitigation. The Secretary of Labor is authorized to carry out such training programs.

·         Exporting Clean Technology

o   U.S. assistance may be encouraged to deploy clean technologies to developing countries. To be eligible a country must have ratified international treaties and undertaken national mitigation activities to achieve greenhouse gas reductions.

·         Adapting to Global Warming

o   Established an interagency council to ensure an integrated federal response to global warming.

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It is widely agreed that greenhouse gases are a leading cause of global warming. The most plentiful and arguably hardest to regulate of these gases is one which every single one of us is responsible for generating, Carbon Dioxide CO₂. Carbon Dioxide is a natural byproduct of respiration, combustion, and decomposition. Traditionally, the EPA has regulated pollutants which originate from point sources (sources which are stationary, and readily identifiable such as smoke stacks, drainage pipes, and other similar structures) and not from mobile sources such as vehicles, vessels, and other activities such as deforestation.

The new climate change legislation proposed by Representatives Waxman and Markey is divided into four titles the first two of which will be summarized below:

Title I: Clean Energy

•  Renewable Energy
•   Retail electricity suppliers must provide certain percentages of their load with electricity generated from renewable resources such as wind, solar, geothermal, and biomass.
•  The following amounts of energy must be from renewable source, 6% in 2012 stepped up to 25% in 2025

·         Carbon Capture and Sequestration (CCS)             

o   Enables coal to continue to be used for electricity generation while reducing global warming by capturing and injecting the carbon dioxide into underground wells.

·         Clean Fuels and Vehicles

o   Establishes low-carbon fuel standard to promote biofuels. Additionally authorizes grants or loan guarantees for large-scale demonstration of electric vehicles.

·         Smart Grid and Electricity Transmission

o   Provides for deployment of a smart grid including measures to promote smart grip capability in new appliances. Also directs the Federal Energy Regulatory Commission to provide for new transmission lines to carry electricity from renewable sources.

·         Partnership with States

o   Form a State Energy and Environmental Development Fund in each state to serve as repository for federal money for clean energy and energy efficiency projects

·         Federal Purchase of Renewable Energy

o   Federal agencies may enter into long term contracts to purchase renewable electricity

Title II: Energy Efficiency

·         Building Energy Efficiency

o   Federal funding and training for states that adopt advanced building codes.

o   Directs the EPA to develop procedures for rating building energy efficiency

·         Appliance Energy Efficiency

o   Codifies efficiency standards for lighting and other appliances.

o   Improves DOE process for setting energy efficiency standards and strengthens the cost-effectiveness test to establish minimum standards. Incentives are provided to retailers who sell high volumes of “Best-In-Class” appliances.

·         Transportation Efficiency

o   Seeks to harmonize vehicle emission standards of the EPA, California, and Federal fuel economy standards.

o   Directs EPA to set emission standards for locomotives, marine vessels, and nonroad sources.

o   Large metropolitan planning organizations must submit plans which establish goals for reducing global warming pollution from the transportation sector.

·         Utilities Energy Efficiency

o   Distribution companies must show their customers have achieved a 1% electricity savings and 0.75% natural gas savings in 2012 and increase to 15% electricity savings and 10% natural gas savings by 2020.

·         Industrial Energy Efficiency

o   Secretary of Energy is required to establish standards for industrial energy efficiency and to seek ANSI recognition of the standard.

·         Public and Federal Energy Efficiency

o   Amends the Energy Independence and Security Act of 2007 to include nonprofit hospitals and public health facilities as public institutions eligible for grants and loans for energy efficiency.

Later this week part two of this series will focus on the remaining two titles of the proposed legislation as well as what it means from a regulatory prospective as well as its implications for green building.

 A copy of the draft legislation can be found here.

The executive summary of the legislation can be found here.

An excellent article form the New York Times explains some of the problems the EPA will have with implementing the new legislation if it becomes law.

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As Goethe said “Knowing is not enough; we must apply!” Simply being aware of the Interstate Land Sales Act is not enough, we must learn what It means and then apply that knowledge to rescind contracts or protect ourselves from law suits in the future. Have you heard of the Interstate Land Sales Act? This is a question that developers may soon be facing in courtrooms and arbitrations across the nation.

The Interstate Land Sales Full Disclosure Act 15 U.S.C. §1701 et seq. is being used by home purchasers across the nation but particularly in Florida, Tennessee, Nevada, and New York City as a grounds on which to escape contracts for the purchase of a condominium.

In West Palm Beach, Florida the Palm Beach Post recently announced three lawsuits were filed against the developers of Two City Plaza, City Place South Tower, and City Palms. To date only 166 of the 1.175 units marketed during the height of the Florida real estate craze have closed. The buyers allege that the developers failed to deliver the units within 2 years and are therefore in violation of the Interstate Land Sales Act. Interestingly, several of the plaintiffs said they would have been able to close on the units if they were delivered when promised but due to the current economic situation are unable to do so now.

In Nevada, the Las Vegas Business Press recently reported that a suit has been brought on behalf of 200 homebuyers for condominiums at the Cosmopolitan a 2,998 unit condo-hotel.  The Cosmopolitan project which has undergone an ownership change and several interior redesigns is now slated to open in June of 2010, approximately a year behind schedule. The attorneys representing the condo purchasers have amended their complain to include a violation of the Interstate Land Sales Act as the purchasers were never provided a property report as required by the Act prior to signing their purchase contracts.

The Press Register of Alabama has also reported that a condominium project in Orange Beach is now scheduled to open 18 months behind schedule. The developers have obtained extensions from 40 of the 69 owners but are potentially facing a law suit based on the Interstate Land Sales Act. The developers are claiming that they will not be liable under the Act as the units experienced delays due to Hurricane Katrina which destroyed a facility manufacturing pilings for the condo project and that Force Majeure clauses in the contract allow for delays due to an act of God such as the Hurricane. The developers are making efforts to work with the purchasers including partial rebates of the purchase price and $10,000 worth of complimentary upgrades. I will continue to monitor the Phoenix West II project and update my readers if any law suits involving the act are filed.

The Nashville Post has reported several Interstate Land Sales Act law suits against the developers of Ashland City’s Braxton and the Gulch’s Terrazzo and Icon condominium projects. The plaintiffs in these cases allege that the buildings were not constructed within 2 years and that the developer’s failure to provide a property report allows for them to walk away from their contracts with their deposits.

Stay tuned this week for a more in depth discussion of the Interstate Land Sales Act and its various provisions.

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Recently there has been a reemergence of individuals using the Interstate Land Sales and Full Disclosure Act 15 U.S.C. §1701-1720 to escape from contracts to purchase land, homes, or condominiums. The act was passed in the late 1960’s and modified several times in the 1970’s in response primarily to the shady development practices of Florida developers who were selling land to out of state residents. The most often litigated provision of ILSA is the exemption found in §1702. Developers are exempt from the time consuming disclosure requirements if they are building a residential subdivision containing 25 lots or less or if there is a contract which requires completion of the building in 2 years of less. It is my opinion that the 2 year completion provision is the most relevant provision in light of the current economic situation.

Imagine that a client walks into your office wanting to escape a contract to purchase a condominium entered into at the peak of the market in 2006. The condominium building was supposed to be ready for occupancy in the start of 2008 but due to the credit crunch and their inability to obtain bridge financing the developer did not complete the building in time. ILSA might just provide the escape hatch that your client desperately needs. If the condominium developer did not make the disclosures required under ILSA because of the 2 year completion exemption but has now failed to complete the building you may be in luck!

In January of 2009, a Miami based arbitrator ruled that the contract Kurt and Micheline Moeding inked with Kolter Homes violated federal law, and that they should get their $76,114 deposit back. The couple signed up for the $629,580 home at Kolter's Verano community in Port St. Lucie in 2006 - before home values plummeted (As an interesting side note it was the development of Port. St. Lucie and Cape Coral that originally spurred Congress to enact ILSA). A link to an article from the Palm Beach Post relating to this case can be found here.

While ILSA has traditionally been an obscure law known only to those active in the real estate and land development industries the above referenced case shows it may soon become a valuable tool in the arsenal of any attorney representing client attempting to escape purchase contracts on properties now worth significantly less than their contracted for price.

This post can also be found at Christopher Hill'sBlog www.constructionlawva.com. I also suggest following Christopher on Twitter @constructionlaw

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