Energy-efficiency disclosure now compulsory

The Building Energy Efficiency Disclosure Act 2010 (Cth) (the Act) commenced on 1 July 2010. Introduced as part of the Federal Government’s National Strategy on Energy Efficiency, the Act places obligations on owners and landlords of large commercial office spaces to disclose energy-efficiency information to purchasers and tenants.

Application

The Act applies to owners, landlords and sub-lessors who are selling, leasing or subleasing buildings or areas of a building, with a net-lettable area of 2000 m² or more.

Requirements under the Act

The Act requires that:

• owners and landlords wishing to sell, lease or make offers to sell or lease buildings must hold a valid, current building energy efficiency certificate;
• owners and landlords must provide a copy of a valid, current building energy efficiency certificate at the request of a prospective purchaser or tenant; and
• advertisements for the sale, lease or sublease of a building must include an energy-efficiency rating.

The Regulations

The Building Energy Efficiency Disclosure Regulations 2010 (the Regulations) also commenced 1 July 2010. The Regulations prescribe (amongst other things):

• information that must be included in a building energy certificate;
• how to apply for an exemption from an energy-efficiency disclosure obligation; and
• the accreditation and training of assessors.

Building energy efficiency certificates (BEECs)

A BEEC discloses the energy-efficiency information of a building. The Regulations provide that a BEEC must include:

• the net-lettable area of the building;
• the hours of occupancy for the building;
• the energy consumption of the building;
• the greenhouse gas emissions generated by the building; and
• an energy-efficiency rating.

Under the Act, only an accredited assessor can prepare a BEEC. Once issued, the BEEC must be registered with the Building Energy Efficiency Register and is valid for up to 12 months.

Transitional period

The Act provides for a transitional period of 12 months beginning on implementation day. The date of implementation day has not yet been set, but is expected to be within the next six months. During the transitional period, a valid National Australian Built Environment Rating System (NABERS) can be disclosed in place of a BEEC.

Exemptions

There are no restrictions on who can make an application for an exemption from an energy-efficiency disclosure obligation. The Act provides that some buildings may be exempt from disclosure, including buildings or areas of a building:

• that are used for police or security operations;
• in which it is not possible to assign an energy-efficiency rating;
• in which it is not possible to assess the energy efficiency of the lighting; or
• instances that may later be prescribed in the Regulations.

Enforcement

The Act gives auditors various powers to enforce compliance with the legislation, including the power to enter a building or an area of a building, by consent or under warrant. Auditors also have powers to search premises and inspect documents and electronic equipment. During a search, occupiers must answer any questions asked by an auditor and produce documents requested.

Non-compliance

Any person who fails to meet their disclosure obligations two or more times within a 12-month period will be recorded in the Energy Efficiency Non-Disclosure Register.

There are also penalties for non-compliance. An owner or landlord that sells or leases a building without a valid BEEC, or does not include a valid, current energy-efficiency rating in an advertisement for the sale or lease of a property may face penalties of up to $110,000.

Implications

It is imperative that owners, landlords and sub-lessors understand how to comply with the Act and the Regulations, and start to take action to ensure their buildings are energy efficient. Non-compliance with the legislation could lead to penalties and delays in selling and leasing properties. During the transition period, owners, landlords and sub-lessors of commercial properties falling within the Act should consider obtaining a NABERS rating to avoid delays in selling or leasing.

*Justin Lethlean, Partner, Middletons