Climate Legislation and Emissions Issues How Attorneys Can Advise Boards

While the ‘Green New Deal’ and other long-term climate solutions are being debated at the federal level, some states and municipalities are getting in on the action as well, setting legal emissions benchmarks that will have a real impact on the lives of multifamily community residents – including those in co-ops, condos, and HOAs. 

For example, New York City passed the Climate Mobilization Act in May of 2019, setting emission caps on buildings larger than 25,000 square feet beginning in 2024, with the goal of an 80 percent reduction in total emissions by 2050 – the year scientists warn will be a point of no return if we fail to drastically reduce carbon emissions and curb climate change.

Writing for The New York Law Journal, William D. McCracken, a partner with the Manhattan-based law firm Ganfer Shore Leeds & Zauderer, makes the case that attorneys are well-situated to help association boards understand – and abide by – emissions standards that may seem intimidating at first. He notes in the piece: “Lawyers are fiduciaries, and they have an obligation to help their clients avoid a nightmare scenario wherein a building fritters away the next few years [and then] finds itself seeking a building permit behind 37,000 other properties, using unproven or incompetent professionals because its preferred choices were fully booked long ago, and incurs million dollar fines year upon year.”

The Cooperator spoke with McCracken about the responsibilities of attorneys outside of New York City in regard to their clients’ energy emissions; their general ability to act as climate stewards; and the root of his own personal interest in environmental issues. We also checked in with attorneys both in New York and beyond to discuss what they feel their roles will be in all of this going forth.

The Advocate

The Cooperator: Outside of the passing of the Climate Mobilization Act, what compelled you to consider attorneys’ involvement in environmental issues, on behalf of their clients?

William McCracken: “I worked on the environmental law journal in law school, so my interest in the area goes back years. I don’t know how anyone can read the news or even go outside anymore and not be aware that climate issues are increasingly important. Fortunately, the new generation coming up is ever-more cognizant of these things.”

Unfortunately, condo and co-op boards can sometimes be shortsighted and slow to move on things...

“I think that’s right, and anyone who’s worked with boards understands the conservatism and short-term outlook via which things often happen in associations – some of that with good reason. But it makes an attorney’s job challenging, because, with this issue, you’re talking about long-term effects and proposing long-term actions that may seem drastic compared to how boards usually operate. 

“As important as all of this stuff is and as much as the government may require buildings to do, if you break it down step by step, everything is possible. Nothing is being asked that buildings can’t handle; most will be able to comply with these standards if they focus their energies properly, hire the right people, and adopt the right long-term perspective. And ideally, you’ll have board members that are savvy enough to really put the work in on these issues over a period of time.”

So far, what have you found effective at activating hearts and minds? Because it often seems as if people don’t want to make any substantial change until they face serious financial penalties.

“I do think that once specific legislation and requirements are in place, that will help. Once more jurisdictions adopt legislation and there are test cases, experiences, and dialogues out there, then people will be brought along almost by osmosis. If our local legislation gets people thinking, and they become more adept at this stuff, it will be easier for people in, say, Chicago, to follow that template, and that will eventually reach a critical mass. Admittedly this is speculative.” 

What advice would you give to attorneys who haven’t had to deal with any type of local emission legislation yet, or to those working in areas where the government is unlikely to ever take the lead on this stuff?

“I think that the one motivating factor that everyone has is saving money. If you can educate yourself as an attorney as to what will save an association money in the long term, that can really add value to a building, that’s the context that might prove the most convincing. As in, ‘I can make this easy for you; I’ve figured out the tax credits; I’ve ironed out the financing, etc.’

“People might be hesitant to spend at first, but if you can convince them that the incentives are there, and you can explain this intelligently and coherently, then you can move them to make a change. When I’m speaking to people, I don’t necessarily want to delve too far into specific legislation, which is mostly sticks – I want to show them the carrots, including that long-term savings. Just show them the numbers.”

Second Opinions

Even within New York City, not every attorney is this climate-focused.

For his part, Thomas D. Kearns, a partner with Olshan Frome Wolosky LLP in Manhattan, says that in his experience, the Climate Mobilization Act has yet to really hit attorneys in a measurable way. “The managing agents and consultants are still trying to get their arms around the legislation,” he says. “The lawyer’s role is to help interpret the law and apply it to the particular circumstances of the building. One big issue is that many buildings have upgraded significantly over the years, installing more efficient boilers and other systems. How much more work will they be able to do in the time constraints applied under the legislation?”

And in many other markets, associations haven’t been mandated to deal with these issues yet, per se. But those proactive boards are certainly considering implications of legislation elsewhere – although it looks like slow going.

“There’s some concern about legislation that may come through regarding electric cars and solar panels,” says Gary M. Daddario, a partner with Marcus Errico Emmer & Brooks, which has offices in Massachusetts and New Hampshire. “Where buildings were constructed with many units and parking space is at a premium, there are some significant practical issues, such as where charging stations can be placed, and who would cover the costs of installation. As for solar panels, the hows and wheres are again questions – as is the calculation of financial benefit and fair distribution to the benefit of various unit owners.

“I think that the attorney’s role here will be to review, understand, and then explain any changes in the law, as well as to review and negotiate the vendor contracts that will inevitably come for the installation, servicing, etc., of any new equipment,” Daddario continues. “Wisely-crafted legislation that leads to energy efficiency and less negative impact on the environment can be a good thing. With respect to condominiums, however, I hope that the legislators take into account their unique physical, operational and governance characteristics. Legislation drafted from a single-family home perspective will likely only produce more questions and dilemmas than answers.”

In Chicago, there is an ordinance that requires benchmarking and reporting usage, but nothing thus far mandating that owners curb their energy consumption, according to Howard S. Dakoff, a partner with the Community Associations Practice Group of Levenfeld Pearlstein, LLC. “A few years ago, some architects were offering ‘green reserve studies’ to address energy usage by installing more energy-efficient equipment,” he says. “But other than light bulbs, we did not see associations proactively purchase new energy-efficient equipment. Once a component needs replacement, energy-efficiency does become a factor – but so does price.

“As a general rule, attorneys do not have expertise on energy consumption and carbon footprint issues, as they are outside the legal wheelhouse and not a fiduciary obligation of legal counsel to community associations,” Dakoff continues. “If there is an organic/authentic opportunity to mention energy efficiency as not just a sustainability issue, but as a business decision, then we speak up.”

Finally, some attorneys are still skeptical that climate change is even an issue warranting concern. “While I am generally in favor of cost-cutting measures and energy efficiency, I do not subscribe to the climate ideology or the ‘science’ which very often propels it,” says Ronald J. Barba, a partner with Bender, Anderson and Barba, P.C., in North Haven, Connecticut.  

The bottom line—should one seek to move their building or community association to adopt energy-efficient materials and systems—is to appeal to, well... its bottom line. Even a board whose members consist of committed environmentalists will have an easier time convincing residents to go along with a project that offers demonstrable savings in the future—regardless of where their constituents come down on the issue of climate change.

Mike Odenthal is a writer/reporter for The Cooperator. 

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