Atkinson Vinden clients were alerted to the gazettal of the Commercial Buildings Energy Efficiency Code and its potential and significant effect upon commercial building owners in our February/March 2011 AV “Law Talk” article.
From 1 November 2011 “Green Building” issues became serious with the regulations enacting the Commercial Building Disclosure (CBD) program coming into effect. Substantial penalties can result for building owners (and even tenants) if their office/commercial spaces do not meet environmental standards when leased or sold. The transitional disclosure period began on 1 November last year but with a lower level of disclosure.
Building Energy Efficiency Certificates (BEECs) are required to be issued if more than 2,000 square metres of office space is sold, leased or subleased – so the CBD requirements apply to both building owners and tenants who sublet space.
BEECs are only valid for 12 months and must be publicly available – they need to include:
- A National Australian Built Environment Rating System energy star rating for the building.
- An assessment of tenancy lighting within the area being sold or leased.
- General energy efficiency guidance.
It is likely that compliance will require substantial works on many buildings by their owner landlords and it is unlikely that the (largely capital) work costs could be passed on to tenants (even though a tenant is likely to reap benefits in lower energy costs and similar). Tenancy disruption could result while compliance works are carried out; preferably the work would be carried out when the property is untenanted, but for many multi-tenanted buildings, this will not be possible.
A tenant’s fit-out and general working practices may have a big impact on the building’s “green credentials”, and needs careful monitoring.
Management of the CBD programme is shared between the Federal Department of Climate Change and Energy Efficiency and the NSW Office of Environment and Heritage. This may complicate both compliance and enquiry aspects.
It is estimated that energy use in commercial buildings accounts for approximately 10% of total greenhouse gas emissions so it is perhaps understandable that Government seeks to improve the energy efficiency of commercial buildings…… and, of course, the “carbon tax” legislation has also just passed through both houses of Federal Parliament.