Changes to the Commercial Building Disclosure Program
If you own or manage an office building you may be affected by changes to the Commercial Building Disclosure (CBD) Program coming into force from 1 July 2017.
From 1 July 2017, the mandatory disclosure threshold on commercial office space will be lowered from 2000 square metres to 1000 square metres. The effect of this change is that owners and lessors of smaller commercial office buildings may need to disclose the building’s energy efficiency when they sell or lease their property after this date. For an overview of the changes to the CBD Program and what it entails, you can download the CBD Changes presentation. Information on the CBD Program can be found here.
Does this apply to me?
From 1 July 2017, you are likely to be affected by the CBD Program if you are:
- a building owner who is selling or leasing office space with a net lettable area of 1000 square metres or more
- a tenant who is subleasing part of your tenancy with a net lettable area of 1000 square metres or more
- a real estate agent who is advertising office space with a net lettable area of 1000 square metres or more
- a CBD accredited assessor who must comply with the conditions of accreditation, conduct of assessments and use of information gathered from building owners and tenants.
The kinds of buildings and areas of buildings that are disclosure affected are identified in the Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination 2016. The following kinds of buildings are exempt from the disclosure requirements:
- new buildings where a certificate of occupancy (or equivalent) has either not yet been issued or was issued less than two years earlier.
- buildings that have completed a major refurbishment for which a certificate of occupancy (or equivalent) was issued less than two years earlier. Note: for a major refurbishment where no certificate of occupancy was issued, you need to apply for an exemption.
- strata-titled buildings.
- mixed use buildings where total office space comprises less than 75 per cent of the building by net lettable area (or gross lettable area if net lettable area is unavailable).
Further information on who is affected can be found at http://cbd.gov.au/does-this-apply-to-me/who-is-affected.
Information on exceptions and exemptions can be found at http://cbd.gov.au/does-this-apply-to-me/exceptions-and-exemptions.
Independent legal advice may be necessary to understand your disclosure obligations under the CBD Program.
What will I need to do?
After 1 July 2017, disclosure affected buildings or tenancies of 1000 square metres or more that are offered for sale or lease will require a Building Energy Efficiency Certificate (BEEC). BEECs are issued by the Department of the Environment and Energy before the building or tenancy is put to market.
The BEEC includes:
- a National Australian Built Environment Rating System (NABERS) Energy star rating for the building; and
- a Tenancy Lighting Assessment for the relevant areas of the building.
BEECs are valid for up to 12 months and are publicly accessible on the online Building Energy Efficiency Register.
You will need to engage an accredited assessor to undertake the assessments and lodge the application for a BEEC on your behalf, and they will ask you for your building’s previous year’s electricity and gas bills.
The NABERS Energy star rating must appear on all forms of advertising material for the building.
Compliance of the program is monitored and penalties apply to sellers, lessors and their agents who do not comply with their disclosure obligations under the Act. More information on the assessment process can be found at http://cbd.gov.au/how-do-i-comply/overview-of-the-process.
Building owners are encouraged to seek independent legal advice to understand their disclosure obligations under the CBD Program. Some owners and lessors of smaller commercial office buildings may not have heard of the CBD program, and may not be aware of their obligations.
Why is the reporting threshold being lowered to include smaller buildings?
Changes to the CBD program will help inform purchasers and tenants of the building energy costs at the point of sale or lease. By reducing the mandatory disclosure threshold to 1000 square metres, the program is projected to:
- provide a reduction in end use energy consumption of 17,395 TJ
- provide an abatement of over 3.5 million tonnes of greenhouse gases
- deliver around $50 million in benefits over the period from 2015 to 2019
How can I find out more information about the CBD Program?
The Property Council of Australia, along with the CBD and NABERS teams are heading to each state during April and May 2017 to discuss the upcoming changes to the CBD Program. You can find out more details on the event and register your attendance here.
Information about how to obtain a BEEC can be found at: http://www.cbd.gov.au/get-and-use-a-rating/how-to-get-a-beec
An overview of the legal framework for the CBD Program can be found at: http://www.cbd.gov.au/overview-of-the-program/legal-framework
Information on improving the energy efficiency of your building in preparation for a BEEC can be found at: http://cbd.gov.au/get-and-use-a-rating/how-to-improve-your-NABERS-rating
Contact details for accredited assessors can be found at: http://cbd.gov.au/registers/find-a-cbd-accredited-assessor
If you would like further information on your obligations as a seller or lesser, you can email firstname.lastname@example.org or call 1800 020 131.