Skip to Content

Energy Ratings to be Mandatory

October 2010 will see a huge change in the way commercial office buildings are sold, leased or sub-leased when the mandatory disclosure of energy ratings kicks in.

“Energy Ratings to be Mandatory”

Building Energy Efficiency Disclosure Act 2010
New Mandatory Disclosure of energy ratings for commercial office buildings

October 2010 will see a huge change in the way commercial office buildings are sold, leased or sub-leased when the mandatory disclosure of energy ratings kicks in. Australia’s commercial office buildings accounts for approximately 10 percent of the greenhouse gas emissions which are caused by obsolete technology and inadequate energy management. This new scheme is in line with the government’s National Energy Efficiency Strategy where the objective is to encourage the engagement of energy efficient procedures to reduce Australia’s greenhouse gas emissions.

What is the change?
The new legislation requires a valid National Australian Built Environment Rating System (NABERS) energy rating during the transitional period. After that a full Building Energy Efficiency Certificate (“BEEC”) must be registered and disclosed. The BEEC comprises of three components:

1) Energy Efficiency Rating
• A valid NABERS base building rating

2) Tenancy Lighting Register
• Accredited assessors will compare existing lighting against best practice

3) Energy Efficiency Guidance
• Guidance will be given to building owners and tenants on common energy efficiency opportunities in commercial office buildings

Who will be affected?
Buildings with a net lettable area of greater than 2000 square metres used essentially as offices will be included in this scheme. There is to be no sale, lease or sublease of such premises unless a valid and current BEEC is registered and produced. Any advertisements proposing a sale or lease of affected buildings must include a NABERS energy rating. A BEEC must also be disclosed to the prospective buyer, lessee or sub-lessee upon request and the BEEC must be registered on the Building Energy Efficiency Register website before any offers, or invitations to offer are made. Any failure to comply can incur severe penalties and fines.

Some Exemptions
1) Leases and subleases that has a term of less than 12 months (this must include any options to renew or extend the lease).

2) If the building or the area of building is used for police or security operations.

3) Where it is not possible to allocate an energy efficiency rating in line with the assessment methods and standard due to the particular attributes of the buildings.

Enforcement Measures
The Act gives power to a Magistrate to issue monitoring warrants to an auditor to enter the disputed building to carry out checks despite the refusal by the building owner.

A corporation which fails to register rating information before offering or inviting offers for sale, lease or sublease will be liable for fines up to $110,000.00 each day and $11,000 for subsequent days.

Failure by a corporation to include a valid current energy efficiency rating in advertisements to sell, lease or sublease will also incur fines up to $110,000.00 each day and $11,000 for subsequent days.

An individual owner who failed to provide a valid BEEC within a reasonably practical time after being notified to do so, will be liable for a fine up to $38,500.00. 

Impact
It is imperative for building owners who are looking to sell, lease or sub lease commercial office buildings greater than 2000m2 to start applying for a NABERS rating. To comply with the required assessment methods and standards, suitable and qualified professionals will have to be engaged. Furthermore, 12 months worth of historical data of the building is needed. This entire process will inevitably require quite some time to complete.

New leases after October 2010 will have to be carefully drafted to address these new requirements. For example, that the mandatory energy efficiency disclosure information has been provided by the landlord and receipted by the lessee or sub-lessee. All the new leases will have to reflect these changes.


<< Back | Home