Commercial Building Disclosure

A reminder to owners of commercial property of new disclosure obligations: 
From 1 November 2011, subject to certain exemptions, the sale, lease or sublease of commercial office space with a net lettable area of 2000m2 or more, now attract certification, registration and disclosure obligations under Building Energy Efficiency Disclosure Act 2010, Commonwealth (“the Act”).   

What buildings require registration and disclosure?

Buildings (and parts of buildings) which are used as an “office” in at least 75% of the net lettable area of the building (or part thereof; and where the net lettable area of that office space exceeds 2,000m2 are called “disclosure affected buildings” or “disclosure affected area of a building” and must comply with the compliance obligations under the Act.

Note: “office use” means “administrative, clerical, professional or similar information‑based activities”.

Who must comply?

• Owners who intend to sell or lease a disclosure affected building or disclosure affected area of a building.
• Tenants/sub-landlords who are intending on subleasing a disclosure affected building or disclosure affected area of a building.

How to comply

Owners (or sub-landlords) of buildings (or part thereof) that fall within the provisions of the Act must register arrange for a Building Energy Efficiency Certificate (BEEC) and register the BEEC with the Building Energy Efficiency Register (BEER).

To prepare a BEEC, owners (or sub-landlords) must brief an accredited assessor to provide a BEEC and register that certificate with the BEER.

When to comply

BEECs must already be registered.

Disclosure must be made (if requested) to potential buyers/tenants at the point of offering to sell, lease or sublease or inviting offers to sell, lease or sublease. This would include any pre-contractual steps such as leasing proposals or advertisements for sale.

Building Energy Efficiency Certificate

BEECs are valid for 12 months and include:

• a NABERS Energy star rating for the building.  The rating starts at a one star level for low energy efficient buildings to a 6 star rating for the high energy efficient buildings
• an assessment of tenancy lighting in the area of the building that is being sold or leased, and 
• general energy efficiency guidance.

Who issues the BEEC?

Accredited Commercial Building Disclosure Assessors must be engaged by building owners to undertake the required assessments and apply for the BEECs.

Exceptions  & Exemptions

There are some exceptions to the disclosure obligation including:

• mixed use buildings with less than 75% of net lettable area as office space;
• new buildings (certificate of occupancy less than 2 years old);
• Strata-titled buildings; and
• Short term leases for a period of less than 12 months.

Exemptions are available for buildings which are unable to comply including buildings which have had a major refurbishment.  There are other exemptions that may apply.

Application for an exemption must be made in writing and the appropriate fee paid.

Penalties

• Penalty for failing to register or disclose can be up to $110,000 for companies.