--- title: Net Zero Land Development date: 2024-08-22T10:00:34Z modified: 2025-07-23T11:29:56Z permalink: "https://chancerylaneproject.org/clauses/net-zero-land-development/" type: clause status: publish excerpt: "" wpid: 5849 jurisdiction: - USA maintenance-status: - Not maintained practice-area: - Construction - Government and public law - Real estate and property sector: - Energy and natural resources - Real estate clause_child_name: "Sam's Clause" clause_summary: "

A clause which can be added to a development agreement between a municipality and a developer to promote net zero development.

" clause_last_updated_date: 2024-09-10 related_clauses: false --- ## Child’s name Sam’s Clause ## Summary A clause which can be added to a development agreement between a municipality and a developer to promote net zero development. ## What this clause does This clause allows municipalities to require a developer to take specific measures to reduce greenhouse gas emissions that could otherwise occur with new development. Achieving net zero or near net zero objectives in land development will help the municipality achieve its overall sustainability goals. ## Clause Content **1. Net Zero strategy** 1.1 In preparing and implementing plans for the Development, the Developer shall: 1.1.1 use all reasonable efforts to achieve the Objectives; 1.1.2 preserve Natural Capital during the Development process and in the use and occupation of the Property in the future; and 1.1.3 align its efforts with the US Net Zero Target. 1.2 In collaboration with the Climate Professionals, the Developer shall create a Net Zero model to measure the GHG emissions from the Development and demonstrate how the emissions will be reduced to Net Zero. **2. Declaration of Covenants** 2.1 The Declaration of Covenants, Conditions, and Restrictions ('Declaration') for the Development, as required by \[_regulation_\], shall be filed with \[recording agency\] no later than \[_number_\] days after the execution of the Agreement and shall: 2.1.1 Incorporate by reference or explicitly state the Developer's obligations contained within this Agreement; 2.1.2 Include a Conservation Covenant protecting the Conservation Land in favor of the Municipality and prohibiting uses of the Conservation Land that would interfere with the Biodiversity Objectives; and 2.1.3 Include appropriate provisions for the ongoing care, maintenance, management, and operation of the property for which the Master Association is responsible, as required under section \[●\]. These provisions must establish a requirement for the Master Association to designate, from time to time, a member of the Master Association to serve as a contact person for communications with the Municipality. _\[Drafting note: This section assumes that the main agreement provides for the establishment of a Master Association composed of the property owners within the Development. Users should substitute alternate terminology as appropriate.\]_ **3. Climate Professionals** 3.1 Subject to the approval of the \[Developer OR Municipality\], which approval may not be unreasonably withheld, delayed, or conditioned, the \[Municipality OR Developer\] shall from time to time employ such Climate Professionals as may be necessary to carry out the services contemplated by this Agreement. 3.2 The Developer shall pay all fees and costs due for the services of the Climate Professionals, and shall hold the Municipality harmless from all claims of the Climate Professionals for unpaid fees and costs. **4. Financial guarantee** 4.1 Prior to beginning any site development, the Developer shall post a security in the form of \[an unconditional letter of credit\] or \[other instrument\] or \[a cash deposit\] to guarantee completion of the Initial Objectives, as described in Exhibit A to this Agreement. The face amount of the security instrument or the amount of the cash deposit shall be as established by the \[City Engineer\] or \[_other official_\], based on the following components: 4.1.1 an amount equal to \[110 (one hundred and ten)\] or \[_multiplier_\]percent of the total dollar amount of the Initial Incentives, as described in Exhibit B to this Agreement; and 4.1.2 an amount equal to \[110\] (one hundred and ten) or \[_multiplier_\]percent of the estimated cost to complete the physical components of the Initial Objectives. 4.2 The security instrument required under this section: 4.2.1 must meet the requirements of \[_municipal regulation_\]; 4.2.2 may be collected on by the Municipality, in full or in part, if the Developer defaults on its obligations to meet the Initial Objectives on schedule, provided further that the Developer must replenish the security instrument as directed by the \[City Engineer\] or \[other official\] for any remaining Initial Objectives; and 4.2.3 will not be released until the Developer has fulfilled all of the Initial Objectives, as verified by the \[City Engineer\] or \[_other official_\], in consultation with the Climate Professionals. 4.3 The \[City Engineer\] or \[_other official_\] shall evaluate the amount of the security on no less than an annual basis. At the reasonable discretion of the \[City Engineer\] or \[_other official_\], the amount of the security: 4.3.1 may be reduced, based on the Developer's progress in fulfilling the Initial Objectives; or 4.3.2 may be increased, if the anticipated cost of fulfilling the Initial Objectives increases due to inflation or other factors. 4.4 The Municipality may use funds collected from the security for any of the following purposes: 4.4.1 to complete or repair defects in infrastructure or public improvements related to fulfillment of the Objectives; 4.4.2 to progress Carbon Insetting or Carbon Offsetting relating to the Development or elsewhere in the City; 4.4.3 to promote Carbon Capture by planting trees \[or preserving peat bogs and other wetlands\]; or 4.4.4 to carry out any similar or analogous activity that would offset or balance the resulting Development’s carbon footprint and help ensure achievement of the Net Zero Objectives. \[_Drafting note: This section contemplates that financial security will be required to guarantee fulfillment of the Initial Objectives but not for the Ongoing Objectives. Users may add language to require security for fulfillment of the Ongoing Objectives as well if the incentives alone are not sufficient._\] **5. Rights of third parties** The Municipality may assign its rights under this Agreement, including the rights to monitor the Developer's performance of its obligations, to one or more third parties. The Developer may assign its rights and obligations under this Agreement to the Master Association or other third parties, subject to the Municipality's consent and the assignee's written agreement to be bound by the Agreement. Otherwise, a person who is not a party to this Agreement will not have any rights to enforce any term of this Agreement. **Exhibit A** **Objectives** _\[Drafting note: This exhibit should provide specific details of the measures to be completed in meeting the Community Objectives, the Green Transport Objectives, and the Net Zero Objectives, as defined in the Agreement. If preferred, the three categories of objectives may be shown in separate exhibits. Objectives should be further categorized as:_ _Initial Objectives – the objectives the Developer must meet as the property is under development. Fulfillment of these objectives is tied to the Initial Incentives (see Exhibit B)._ _Ongoing Objectives – the objectives the Development must meet on an ongoing basis upon completion of the Development. Fulfillment of these objectives is tied to the Ongoing Incentives (see Exhibit B). Parties other than the original Developer may be responsible for achieving these objectives. Covenants that run with the land may delegate this responsibility._ _Local governments should also establish methods for measuring success in meeting the Objectives and determining that a default has occurred. Where appropriate, Initial Objectives should include a target date. Ongoing Objectives should state a measurement time period or frequency, for example, whether an inspection will be conducted quarterly or a report filed annually. Tables or charts may be useful in setting various benchmarks. For example, the following components could be set out in tabular form for the Community Objectives:_ **Community Objectives** **_Community Land:_** Initial Objective: Specific areas designated in each required Community Land category. Verified by: Approved plat showing designated areas as committed. Ongoing Objective: Community Land preserved and maintained as required. Verified by: Onsite inspection. **_Housing Diversity_** Initial Objective: Variety and mix of housing options to be included in Development identified. Specific percentage or number of units designated as affordable housing. Verified by: Approved plat showing locations of various housing options, building permits, final inspections, and public offerings to target audiences. Recorded covenants binding property owner and successors to maintaining affordable housing commitments, including eligibility requirements and limits on sale price or monthly rental cost, and preserving other housing options as identified in the recorded plat. \[_Verification required for any initial or ongoing tax credits_.\] Ongoing Objective: Housing options maintained as required. Verified by: Tax appraisals showing type and use of housing units. Affidavits from Developer or successors supporting maintenance of affordable housing commitments. Monitoring by employees of the Municipality or independent third parties. **_Co-Working Space_** Initial Objective: Commitment to designated square footage amount or percentage of total office space as co-working space. Verified by: Co-working space is built out as committed. Recorded covenants binding property owner to maintain space for co-working. Ongoing Objective: Original co-working space is maintained or replaced with new co-working space. Verified by: Onsite inspection. **_Single-use plastic_** Initial Objective: Written program establishing realistic methods for minimizing or eliminating the sale and use of single-use plastics in commercial and institutional facilities within the Development. Verified by: Evaluation and approval of program by Climate Professionals. Ongoing Objective: Program remains in place and implementation continues. Single-use plastic use is minimized and, where possible, eliminated. Alternatively, program is adjusted as needed to meet goals. Verified by: Statistics showing uses of alternatives to single-use plastics, verified by Climate Professionals. **Exhibit B** **Incentives** _\[Drafting note: This exhibit should provide specific details of the incentives to be provided by the Municipality for meeting the Objectives._ _Incentives may be broken down into:_ - _Initial Incentives, such as waivers of fees normally charged in connection with new development and construction. The Developer would be the most likely beneficiary of these incentives, although they may also be passed down to other parties._ - _Ongoing Incentives, such as tax credits or utility discounts. The Developer may be the beneficiary of some or all of these incentives, to the extent the Developer remains involved in the ownership and operation of the Development. These incentives may also benefit the Master Association or individual property owners who play a part in fulfilling the Objectives.\]_ ## Topics **Jurisdictions:** [USA](https://chancerylaneproject.org/news/jurisdiction/usa/) **Maintenance status:** [Not maintained](https://chancerylaneproject.org/news/maintenance-status/not-maintained/) **Practice Areas:** [Construction](https://chancerylaneproject.org/news/practice-area/construction/), [Government and public law](https://chancerylaneproject.org/news/practice-area/government-and-public-law/), [Real estate and property](https://chancerylaneproject.org/news/practice-area/real-estate-and-property/) **Sectors:** [Energy and natural resources](https://chancerylaneproject.org/news/sector/energy-and-natural-resources/), [Real estate](https://chancerylaneproject.org/news/sector/real-estate/)