Building owners’ obligations under the Building Energy Efficiency Disclosure Act
Currently, before offering to sell or lease office space over 2,000sm, owners must obtain the building’s energy efficiency rating and disclose it to prospective purchasers or tenants (as applicable).
From 1 July 2017, the threshold will be reduced from 2,000sm to 1,000sm, thus capturing the sale and leasing of more office space.
What does this mean to owners of office space?
From 1 July 2017, before offering to sell or lease office space over 1,000sm (Disclosure Affected Space), owners must:
- Register a Building Energy Efficiency Certificate (BEEC);
- Provide the BEEC to prospective purchasers and tenants, if requested; and
- Include the building’s energy efficiency rating in all advertising for the sale or lease of the space.
If you fail to comply with the new disclosure obligations, significant penalties apply (see below).
The change flows from a review of the CBD program in 2016. The review found that between 2010 (when it was introduced) and 2014, the program delivered $15 million in benefits ($44 million including reductions in greenhouse emissions) in excess of the cost of compliance. Reducing the disclosure threshold to 1,000sm is projected to deliver an additional $16 million in savings for the period to 2019, as more than an additional 1,000 buildings and 1.5 million square metres of office space is caught by the program.
Owners should be aware that significant penalties apply for non-compliance. An owner may be fined up to:
- $180,000 for failing to register a BEEC prior to offering to sell or lease Disclosure Affected Space and a further $18,000 per day for as long as it continues to do so.
- $180,000 if an owner does not provide a BEEC to a prospective purchaser or tenant within a reasonable time of request.
- $180,000 for failing to include the building’s energy efficiency rating in an advertisement to sell or lease Disclosure Affected Office Space and a further $180,000 per day for as long as it continues to do so.