In brief - What is the purpose of the Building Energy Efficiency Disclosure Amendment Act?
The Building Energy Efficiency Disclosure Amendment Act 2015 (Cth) ("BEED Amending Act") commences on 1 July 2015. It is expected to bring about savings by reducing the regulatory burden on businesses.
What is the original legislation?
The Building Energy Efficiency Disclosure Act 2010 (Cth) ("BEED Act") forms a national scheme to disclose energy efficiency information in the form of a Building Energy Efficiency Certificate (BEEC), when a commercial office space of 2,000 square metres or more is offered for sale or lease. The BEEC is to be advertised or provided to prospective buyers or tenants prior to any offers of sale or lease being made.
The objective of the original legislation is to ensure that credible and meaningful energy performance reports are relayed to prospective purchasers and lessees in order to assist them in making informed decisions and to ensure they take into account the economic costs and environmental impacts associated with operating the property which they intend to purchase or lease.
What are the amendments going to do?
The intention of the amendments has been outlined in the explanatory memorandum of the bill of the BEED Amending Act.
In the BEED Amending Act there are multiple revisions to the BEED Act.
The most significant and relevant changes aim to:
- Reduce regulatory burdens placed on building owners and landlords
- Streamline the administrative process of the Commercial Building Disclosure (CBD) program - the legislative program under the BEED Act
- Address stakeholders' concerns about the BEED Act
Reducing obligations under the BEED Act
Under the BEED Amending Act, exclusions have been implemented to eliminate the need to disclose a BEEC in two scenarios.
First, when building owners receive unsolicited offers for the sale or lease of their office space, they will have no obligation to disclose energy efficiency details. However, there is currently still ambiguity surrounding what amounts to an unsolicited offer, thus, until this issue is addressed, owners and landlords should be aware that they run the risk of neglecting their obligation under the reformed BEED Act if they do not obtain a BEEC.
Secondly, transactions between wholly owned subsidiaries or inter-company transfers will not require the disclosure of energy performance. This allows for more efficient sales and lease transactions between parties that likely already know the specifics in regards to the energy performance of the premises.
Preserving existing BEEC
New owners and lessors that purchase or lease a premises in which there is a valid existing BEEC for that property will not be obligated to obtain a new one. This removes the need for owners and lessors to have to reapply or pay the costly assessment and application fee for the BEEC.
Changes to simplify the BEEC procedural requirements
The BEED Amending Act also stipulates significant adjustments to the BEEC procedure by:
- Introducing the ability to determine a commencement date for a BEEC which is later than the date of issue. This will mean new certificates can be issued prior to expiry to provide greater flexibility for businesses wishing to proactively maintain up-to-date BEECs for their property portfolios.
- Removing the requirement for six pages of standard energy efficiency guidance text on the BEEC. Live and interactive online information about improving energy efficiency for office buildings will be provided instead.
Addressing the ambiguity of assessment of electrical efficiency
The BEED Amending Act tackles the issue of ambiguity in the original BEED Act in relation to the status of assessments undertaken by assessors accredited under the National Australian Built Environment Rating System (NABERS), but not accredited under the CBD program.
This has been addressed by giving power to the auditing authorities (including NABERS) to provide or approve ratings used in BEECs directly.
Impact of the amendments
The new exemptions coupled with a more flexible certification process will look to improve the efficiency of the administrative process of the CBD program, as well as reducing the regulatory burden on the industry. However, it is still unclear whether or not the changes will impact on energy efficiency across office spaces in Australia.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.