In brief

  • From 1 November 2011, a company cannot sell or lease a disclosure affected office building or area in a building unless a Building Energy Efficiency Certificate (BEEC) is registered. 
  • To obtain a BEEC, a company will need to engage an accredited assessor.
  • Current documents may require updating.

Commercial Building Disclosure Scheme (CBD)

The CBD scheme is made up of the Building Energy Efficiency Disclosure Act 2010 (Cth) (Act), Regulations and Determinations made by the Minister for Climate Change and Energy Efficiency and the Secretary to the Department of Climate Change and Energy Efficiency (DCCEE). Determinations make it easier to alter the details of the scheme from time to time.

The transitional arrangements under the Act come to an end on 31 October 2011.

Owners, lessors, buyers and lessees of commercial office buildings need to be aware of disclosure obligations imposed by the Act on a company that owns or leases a ‘disclosure affected building’.

If you own or manage a building or an area of a building that is:

  • greater than 2,000 square metres, 
  • for administrative, clerical, professional or other information based activities and includes any support facilities for those activities, and 
  • for sale, lease or sublease,

then it may be disclosure affected unless a prescribed exception applies or the Secretary to DCCEE grants an exemption from compliance.

Further, companies must not advertise a building for sale or lease unless a current National Australian Built Environment Rating System (NABERS) Energy star rating for the building is included in all advertisements. Similar provisions apply disclosure affected areas of a building for lease or sublease.

As obtaining a BEEC to comply with the Act may take up to four months, and other documentation needs to be updated, it is important that you act now to check your compliance.

Penalties

Substantial penalties apply for non-compliance.

Fines can apply for each day that the breach continues.

The penalties do not affect the validity of a contract of sale or lease.

What information is required for obtaining a BEEC?

Only an assessor accredited by DCCEE can apply for a BEEC. Some of the information a BEEC must contain includes:

  1. A NABERS Energy star rating for the building which assesses the building’s energy efficiency on a scale of 0 to 6 stars using the NABERS Energy Rating Rules1 but which excludes the purchase of electricity under the GreenPower program. 
  2. The assessment of the energy efficiency of the tenancy lighting in the area of the building that has been sold or leased on an open plan basis in accordance with the CBD Tenancy Lighting Assessment for Office Rules. 
  3. General energy efficiency guidance for owners and tenants on how energy efficiency in the building might be improved. 
  4. Assessment of the energy efficiency of the lighting for the building or area that might be expected to remain if the building is sold, the building or area is let or sublet (ie open plan).
  5. General guidance on how energy efficiency might be improved. 
  6. Information about the building itself eg
    1. net lettable area of the area of the building 
    2. the hours of occupancy for the building 
    3. the energy consumption of the building
    4. the greenhouse gas emissions generated by the building, and
    5. an energy efficiency rating that takes into account the effect of any electricity purchase under the GreenPower program.

The readings of non-utility meters (ie sub meters) must be validated. The Rules set out the requirements for validation.

A BEEC will be valid until the earlier of the expiry of the NABERS Energy rating or the expiry of the tenancy lighting assessment.

Assessment process

In order to avoid delays in the assessment process a party requiring a BEEC will need to make available all the required information to an assessor prior to the assessment date including:

  • NLA survey plans,
  • Tenancy Schedule including name of tenant, size, and location,
  • Floor plans,
  • Current leases to ascertain agreed occupancy hours,
  • 12 months energy data. The actual utility bills must be produced, summaries are not acceptable otherwise the assessor will make an estimate on a worst case scenario,
  • Vacancy information,
  • Reflective ceiling plans of base building lighting,
  • Data sheets or specifications for each luminaire, and 
  • Details for lighting switching arrangements.

If the information is not forthcoming assessors have wide powers of information gathering and access rights.

Future Expansion

Following a consultation process, the energy efficiency disclosure obligations may be expanded to other types of commercial buildings including hospitals, hotels, retail centres and schools but given the proposed timetable, would not be implemented until 2014.

Are your documents adequate?

The Building Energy Efficiency Disclosure Program is a new regime. Its impact on the contractual arrangements between parties must now be considered and addressed:

  • Who pays for the cost of a BEEC? For example, a tenant subletting and requires information from the building owner.
  • If a party incurs a penalty because of the other party’s non-compliance how is the innocent party compensated?
  • Will a tenants’ fitout comfort impact on the owner’s base building rating where the fitout is integrated?
  • Lease clauses, need to be expanded to include power to enter, not only for repairs but to also make energy and water saving modifications, to collect data and for monitoring.
  • Due Diligence checklists should be updated to include current NABERS’ status. A party needs to be able to contractually secure the provision of all relevant information to obtain a NABERS rating if there is no current NABERS Rating.