By Michael Fetter

5 July 2017

From 1 July 2017 changes to the Building Energy Efficiency Disclosure Act 2010 have meant that owners, landlords and sub-lessors of office buildings with areas over 1,000 square metres (previously 2,000 square metres) will need to comply with the Commercial Building Disclosure Program. The program also applies to sub-leases.

What is the Commercial Building Disclosure Program?
The Commercial Building Disclosure (CBD) Program requires energy efficiency information to be disclosed where commercial office spaces are offered for sale, lease or sub-lease and they are over 1000 square metres.

Until now, the CBD Program required disclosure of certain information where commercial office space had a net lettable area of 2,000 square metres or more. This now applies when the property is to be sold, leased or sub-leased unless the building is subject to an exemption (see below), or the owner or sub-lessor had an exemption certificate.

What needs to be disclosed?
Under the CBD Program:
• A Building Energy Efficiency Certificate (“BEEC”) must be provided to potential buyers, lessees and sub-lessees;
• BEEC’s are made publicly available on the BEEC Register and are valid for 12 months; and
• The buildings NABERS Energy star rating must be included in any advertising material, for the sale, lease or sublease of the building. Agents must be aware of this.

Which buildings and circumstances are subject to an exception or exemption?
The following exceptions and exemptions from the CBD Program may apply:
• Mixed use buildings where the total office space comprises less than 75% of the building by net lettable area;
• New buildings or buildings which have undergone a major refurbishment for which a certificate of occupancy has either not been issued or has been issued in the last two (2) years;
• Strata titled buildings (i.e. subdivided floors);
• When they obtain an unsolicited offer from a prospective purchaser or tenant and the party waive’s their right to a BEEC;
• When the sale or lease is between wholly-owned subsidiaries; and
• When an exemption exists in relation to a building, a new building owner will not be required to reapply or pay the application fee for a new application.

In addition, building owners who are required to produce a Building Energy Efficiency Certificate can now delay their BEEC’s commencement date to be after the certificates issue date, allowing for owners to obtain new certificates ahead of time.

What does this mean for you?
If you are the owner of a building that has a floor area over 1,000 square metres you must comply with the Act unless a specific exemption applies. You must be careful to review exemptions as each has particular guidelines and requirements and an exemption will only apply if all requirements are met. For example, no more than 1 exemption can be sought in respect to an unsolicited offer in any 3 month period. If an exemption applies, an application to apply the exemption must be made.

Only once the BEEC has been granted can the building owner/lessor start offering the office space and commence advertising.

Penalties for non compliance are up to $180,000 for the first day of non compliance and $18,000 for each day thereafter (civil penalties) and infringement notices of $18,000 for the first day and $1,800 for each day thereafter.