In brief - Transition period of Building Energy Efficiency Disclosure Act 2010 has ended
The Building Energy Efficiency Disclosure Act 2010 came into effect in July 2010. On 1 November 2010, disclosure obligations commenced nationally for affected offices offered for sale, lease or sublease. The 31 October 2011 was the last day of the transition period, during which a National Australian Built Environment Rating System (NABERS) base or whole building rating could be disclosed instead of a full Building Energy Efficiency Certificate (BEEC). As of 1 November 2011, full BEECs must be disclosed.
What is a full BEEC?
A full BEEC has three components:
- a NABERS report disclosing the energy efficiency rating of a building
- an assessment of the energy efficiency of lighting systems in tenanted areas
- advisory and guidance materials on the proposed energy efficiency performance improvements of the building
A disclosure affected building is one where the office space in the building, or area of a building, is greater than 2000m2. This also affects tenants who sublet premises which are greater than 2000m2, as the onus is on them to obtain and disclose a BEEC.
Exemptions from BEEC disclosure requirements
The building is not disclosure affected if any of these conditions apply:
- the total office space comprises less than 75 per cent of the total space by net lettable area (or gross lettable area)
- the building is either new or subject to major refurbishment and a certificate of occupancy has either not been issued or was issued less than 2 years prior
- the building is held under strata title
- it is a short term lease or sub-lease of less than 12 months (including any options)
The Act also provides for exemptions from the disclosure obligations for buildings which are disclosure affected.
However, unlike the buildings which are not disclosure affected because they fall within the exception categories listed above, for buildings which are disclosure affected, owners can seek an exemption by applying to the Secretary of the Department of Climate Change and Energy Efficiency.
Building owners can apply in the following circumstances:
- where a building is used for policy or security operations
- where a rating is not possible due to the characteristics of the building
- where the building belongs to a class prescribed by the regulations
Landlord's obligation to disclose the BEEC
Landlords who wish to sell, let or sublet a disclosure affected office must include the energy efficiency star rating from the BEEC in any advertisement.
The Act sets out further circumstances in which the landlord has an obligation to disclose the BEEC. These circumstances include but are not exclusive to the following:
- the landlord is offering or continuing to offer to sell, let or sublet the building
- the landlord is inviting offers or continuing to invite offers to purchase, lease or sublease the building
- a constitutional corporation owns the building (whether or not it is a disclosure affected building)
Penalties for failure to disclose the BEEC
Non-compliance with disclosure obligations may incur civil penalties or infringement notices. A court may impose civil penalties of up to $110,000 for the first day and $11,000 for each subsequent day for each breach of a disclosure obligation.
Alternatively, the Secretary of the Department of Climate Change and Energy Efficiency can issue an infringement notice of up to $11,000 for the first day and $1,100 for each subsequent day of non-compliance.
Expansion of the Building Energy Efficiency Disclosure Act
The government is currently focusing this Commercial Building Disclosure on office buildings because the NABERS is readily available for these. The government is considering expanding the disclosure requirements to other types of commercial buildings such as hotels, retail centres, schools and hospitals.
However, the Standing Committee on Energy has agreed to defer consultation until 2012, which would mean that this second phase will be deferred until at least 2014, depending on the outcome of the consultations.
For further information about the Commercial Building Disclosure please see the website of the Department of Climate Change and Energy Efficiency.
This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.