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Building Energy Disclosure

From 1 July 2017 increased commercial building energy disclosure requirements will apply

What is the Commercial Building Disclosure Program?

In 2010 the Building Energy Efficiency Disclosure Act 2010 (Cth) (the Act) came into force.

The Act imposes a number of commercial building disclosure requirements on owners and occupiers of commercial office space in relation to the energy efficiency of the buildings they own or occupy and is designed to improve the energy efficiency of office buildings throughout Australia.

What has changed?

From 1 July 2017 the disclosure requirements will apply to commercial office space in excess of 1,000 square metres (currently 2,000 square metres).

This means that owners and occupiers of smaller commercial buildings will now be subject to the energy efficiency disclosure requirements under the Act.

Who is affected?

As of 1 July 2017, the Act will impose its requirements on:

  • Owners selling or leasing office space with a net lettable area of 1,000 square metres or greater;
  • Tenants sub leasing any part of their tenancy with a net lettable area of 1,000 square metres or greater;
  • Real estate agents advertising office space with a net lettable area of 1,000 square metres or greater; and
  • Accredited assessors who must comply with the conditions of accreditation, conduct of assessments and use of information gathered from building owners and tenants.

Exemptions

There are some exemptions under the Act where disclosure requirements do not apply, including:

  • New buildings (certificate of occupancy issued in the last two years, or have not yet had a certificate of occupancy issued);
  • Refurbished buildings (certificate of occupancy issued in the last two years. Where no certificate has been issued, an application for an exemption to the requirements must be made);
  • Mixed use buildings (where less than 75 percent of the net lettable area of the building is occupied by office space);
  • Strata-titled buildings; and
  • Leases and subleases of 12 months or less (including renewals).

What do you need to do?

Affected parties need to obtain a Building Energy Efficiency Certificate (BEEC) from the Department of the Environment and Energy prior to placing the building or tenancy on the market.

In order to obtain a BEEC, owners and occupiers must engage an accredited assessor to undertake the appropriate assessments and apply for the BEEC on their behalf. Upon issue BEECs are valid for 12 months and include:

  • National Australian Built Environment Rating System Energy star rating for the building which must appear on all forms of advertising for the building/tenancy; and
  • Tenancy lighting assessment for the relevant lighting systems of the building/tenancy.

What are the penalties for non-compliance?

The Act prescribes a civil penalty (person or corporation) of $180,000 for any offer of sale, lease or sub lease carried out without a registered BEEC, as well as a maximum $1,800 penalty for every subsequent day the breach continues.

Summary

In the past some owners or occupiers may not have considered the application of the Act, as it only applied to “larger” commercial office space in excess of 2,000 square metres.

The reduction to 1,000 square metres means the requirements under the Act are likely to have application to a greater number of potential sales or leases. Accordingly, owners, occupiers and agents alike should ensure they are aware of and comply with their respective obligations under the Act.

If you have any queries regarding the disclosure requirements under the Act please do not hesitate to contact Sam Richardson or our Property team.

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