From 1 July 2017, the threshold for disclosing the energy efficiency of commercial office space will be reduced to 1,000m2 (currently 2,000m2).

If your building is caught by this threshold then, subject to some exceptions, you must obtain a Building Energy Efficiency Certificate (BEEC) before the office space is offered for sale, lease or sublease.

This is a further step in the federal government’s Commercial Building Disclosure (CBD) Program.

This article provides a brief outline of the disclosure requirements and when they apply.

Who is affected?

If the area of the office space is above the threshold, the disclosure requirements will affect:

  1. a building owner who is selling or leasing the office space
  2. a tenant who is subleasing the office space
  3. an agent who is advertising the office space.

There are some exceptions, noted separately below.

What information must be disclosed?

The prospective buyer or tenant must be given a BEEC. The BEEC contains:

  1. the National Australian Built Environment Rating System (NABERS) energy star rating for the building; and
  2. a Tenancy Lighting Assessment for the relevant area of the building.

All forms of advertising for the office space must include the NABERS energy star rating.

Timing is critical

The BEEC must be in place before the office space is offered for sale or lease. Civil penalties may apply for non-compliance.

Obtaining a BEEC

If the building does not have a current BEEC, a CBD accredited assessor must be engaged to undertake the assessment and lodge the application with the Department of Environment and Energy. Once a BEEC is issued, it is also publicly available via an online search.

Exceptions

There are some exceptions, where disclosure is not required – for example:

  1. for certain buildings - new or recently refurbished buildings, strata-titled buildings and mixed use buildings where total office space is less than 75%
  2. for certain transactions – leases where the term (including options) is not more than 12 months, and the sale of a building via the sale of shares in the building owner.

The legislation does not generally apply to non-corporate building owners or tenants. However, a corporate entity looking to buy or lease office space (over the threshold) from such an owner or tenant has the right to request they provide a valid BEEC.

Moving forward

If your proposed sale or lease post 30 June will be affected by the lower threshold and you do not hold a current BEEC, we recommend you act as quickly as possible to obtain a BEEC to avoid any delays to your proposed transaction and/or the risk of any civil penalty.