The disclosure obligations to be introduced under the new Building Energy Efficiency Disclosure Legislation were discussed in the June edition of e-Bulletin. Property and Projects Lawyer, Brooke Thomas, provides an update and examines what this could mean for your business.

The Building Energy Efficiency Disclosure Act 2010 (Cth) (Act) received royal assent by Federal Parliament on 28 June 2010. This is Stage One of the National Framework for Energy Efficiency.

Disclosure affected buildings:

Owners and tenants of “disclosure affected buildings” will be required to comply with the Act. The Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination 2010 (Determination) was made on 16 July 2010 to specify the kinds of buildings that are “disclosure affected”.

Section 4 of the Determination states that a building (or area of a building) is “disclosure affected” if:

  1. it has a net lettable area of at least 2,000 square meters  
  2. the net lettable area is for administrative, clerical, professional or similar information-based activities, including any support facilities for those activities that are located in that area.

However, a building (or area of a building) will not be “disclosure affected” if:

  • the building or area of the building is newly constructed or has undergone major refurbishments and a Certificate of Occupancy (Certificate of Classification in Queensland) has been issued which is less than 2 years old, or  
  • the building (or area of a building) is held under a strata title (body corporate) system.  

After debate in Parliament, provisions have been included in the Act so that the scheme will not apply to leases/subleases of 12 months or less (including any options to extend).  

Building Energy Efficiency Certificates

The Building Energy Efficiency Certificate (BEEC) will have three primary components:  

  1. an energy efficiency rating for the office building  
  2. information about the energy efficiency of the office lighting (either for the whole building, if it is the subject of the sale or lease, or the area of the building that is to be leased), and  
  3. general guidance on how the energy efficiency of the building may be improved. Further clarification regarding this guidance can be found in the Building Energy Efficiency Disclosure Determination 2010 dated 8 July 2010 (BEED Determination).  

Part 2 of the Building Energy Efficiency Disclosure Regulations 2010 lists the information that must be included in a BEEC.

The owner or tenant will be required to register a BEEC with the Building Energy Efficiency Register before it offers to sell or lease the building. Both current and prior BEEC’s will be available to potential buyers and tenants to inspect via the online registry.

Disclosure of the BEEC must be made:  

  • in all advertising material  
  • to all potential buyers, tenants and sub-tenants when requested.  

The National Australian Built Environment Rating System (NABERS) Energy star rating will need to be disclosed in any advertisement about the sale, lease or sublease of the building or area of building. The requirements for how star ratings must be disclosed in advertisements are specified in the BEED Determination.

Penalty provisions

There is a maximum penalty of $110,000 for failing to register a BEEC or failing to provide an energy efficiency rating in an advertisement. The penalty provisions drafted in the Building and Energy Efficiency Bill 2010 were revised so that the Act limits the penalty payable for particular contraventions where the infringement continues for more than one day. This means that each new day of the contravention after the initial breach will generally be calculated at a maximum amount of $11,000 per day rather than the initial maximum penalty of $110,000 per day.

Transitional provisions

Certain provisions of the Act commenced on 1 July 2010 to provide persons who will be subject to disclosure obligations with a period of time in which to prepare to meet those obligations. It will also enable the Government to ensure that adequate numbers of assessors and auditors are trained and accredited before the implementation day. Disclosure obligations will then commence on the “implementation day” which was fixed by proclamation on 8 July 2010 as 1 November 2010.

There will be a transitional period from 1 November 2010 to 31 October 2011 during which a valid NABERS Energy base, or whole building rating, must be disclosed. After the transition period, a full BEEC is required to be disclosed. It is advisable that owners of office buildings obtain a NABERS Energy Rating before the implementation day to obtain the benefit of the transition period.