Hastings Business Law Journal


In 2006, the legislators of Washington, D.C. passed landmark legislation introducing green building requirements for various types of structures into the jurisdiction over a five-year period. A noteworthy aspect of the legislation is that it directed construction projects within the district to purchase green performance bonds up to $3 million to guard against a privately owned project’s failure to meet its green building aspirations. Outside of the regulatory requirements, lawsuits may also occur between the participants of a project if the finished structure fails to attain a third party certification. Given the need by project participants to address the risks stemming from potential litigation issues or environmentally friendly governmental policies, the question remains whether performance bonds will provide sufficient coverage if a project fails to meet a sustainability objective, or whether a separate instrument is needed to address the specific perils related to green buildings. This article seeks to address these issues.