Building owners and their agents will welcome reforms to the Building Energy Efficiency Act 2010 (Cth) (Act) to streamline administrative processes and cut red tape. The changes commence on 1 July 2015.

The Act requires energy efficiency information to be disclosed when commercial office space of 2,000m2or more is offered for sale or lease. It aims to ensure that prospective buyers and tenants of large commercial office space are able to make informed decisions, taking full account of the economic costs and environmental impacts associated with operating a building.

The Building Energy Efficiency Disclosure Amendment Act 2015 (Cth), assented to on 25 February 2015, seeks to reduce the regulatory burden on industry and address stakeholders’ concerns about costly and inefficient red tape in the disclosure and certification process.

New exemptions

A major change is the planned introduction of regulations exempting from disclosure obligations building owners who receive unsolicited offers for the sale or lease of office space.

Currently, building owners must undergo energy efficiency assessments of their buildings before they can enter sale or lease discussions, even with their wholly-owned subsidiaries. Assessments take time and can be costly, so exemptions for owners who receive unsolicited offers or who are entering transactions with wholly-owned subsidiaries should facilitate smoother leasing and property sales. The details will be prescribed by regulation, so will become clearer over the coming months.

After 1 July 2015, new owners and lessors will not need to reapply or pay the application fee for exemptions if there is an existing one in place for a building.

Simpler certificates

Another key change is to allow a commencement date for a Building Energy Efficiency Certificate which is later than the date of issue. At the moment, certificates commence on their issue date. The change is intended to provide greater flexibility for businesses wishing to proactively maintain current certificates for their property portfolios.

In addition, the current requirement for six pages of energy efficiency guidance text to be included on the certificate will be removed. Instead, information about improving energy efficiency for office buildings will be available online.

Changes will also be made to the registry, assessment and audit processes under the Act.

A number of industry stakeholders have welcomed the changes, looking forward to more streamlined property transactions. It remains to be seen whether the new exemptions and more flexible certification processes will have any repercussions for energy efficiency across Australian office buildings.