Expansion of the Commercial Building Disclosure Program May Affect Your Commercial Building

Did you know that commercial buildings are responsible for 10% of Australia’s energy consumption?[1] Well now those sterile lights, air conditioning systems, computers and all the trappings of office buildings are once again the target of the government’s energy agenda. In 2010 the federal government passed the Building Energy Efficiency Disclosure Act 2010 (Cth) and with it created the Commercial Building Disclosure Program[2] (CBD).

The purpose of the CBD is to inform buyers and tenants (including sub-tenants) of a building’s energy efficiency and encourage them to seek out “greener” buildings. Originally the CBD only applied to certain buildings with a net lettable area greater than 2,000 square metres, however following the success of the program, from 1 July 2017 the scope of the CBD will extend to all commercial premises where:

1) the building’s net lettable area is greater than 1,000 square metres; and

2) at least 75% of the net lettable area is used for office space.[3]

To comply with the CBD vendors and landlords must obtain a Building Energy Efficiency Certificate. There is an online register of buildings that have already been assessed, and a register of accredited assessors who can be engaged to apply for a certificate on behalf of a vendor/lessor.[4] The certificate must be provided to prospective purchasers/tenants prior to any formal offer to sell/lease the property. As a note for real estate agents, the legislation also provides that any advertising material for the sale or lease of a property must contain a National Australian Built Environment Rating System (NABERS) energy efficiency rating.

Exceptions/Exemptions

• The legislation mostly applies to vendors/lessors who are corporate entities, however a non-corporate entity can be asked to provide a certificate by a prospective corporate entity purchaser/tenant.
• The CBD does not apply to leases of less than 12 months (including any options to renew).
• A building does not require a certificate if:
• it is new or has had a “major refurbishment”; and
• an occupation certificate has either not been issued for the building or is less than 2 years old.
• The legislation does not apply to buildings held under strata title.

Obtaining a certificate and a NABERS energy rating

Obtaining a certificate is not necessarily a quick process. In addition to engaging a certifier, you must provide supporting documentation such as:

• electricity and gas bills for the last 12 months;
• documents validating net lettable area;
• lease documents; and
• after-hours air conditioning log requests.

An application for a NABERS rating involves a similar process of investigation and accreditation by an accredited certifier. Make the process simpler for your company by retaining all energy related documents, and starting the process long before you intend to sell or lease. Failure to comply with the legislation may result in fines and infringement notices.

Kells have a number of commercial and property specialists who can advise and assist on transactions, disputes, and the latest legal requirements to ensure that your commercial interests are protected.

[1] http://www.joshfrydenberg.com.au/guest/mediaReleasesDetails.aspx?id=231

[2] http://www.cbd.gov.au/

[3] Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination 2016

[4] http://www.cbd.gov.au/