Compliance with compulsory building energy efficiency
Further to our
eAlert on 19 July 2010 regarding the introduction of the
Building Energy Efficiency Disclosure Act 2010 (Cth) (the
Act), an implementation date has now been set. Owners, landlords
and sub-landlords of buildings captured by the Act and wanting to
sell, lease or sub-lease, must urgently prepare for compulsory
energy efficiency disclosure by 1 November 2010.
As an expansion on
our eAlert, below are a few more important points to
the Act applies in relation to commercial office space covered
by the Act (i.e. a building, or part of a building, with a net
lettable area of 2,000sqm or more and not subject to any of the
listed exemptions) where:
the owner, landlord or sub-landlord is a corporation; or
the owner, landlord or sub-landlord is an individual, but a
prospective purchaser, tenant or sub-tenant is a corporation which
serves a notice requiring compliance with the Act.
strata titled buildings and buildings where the occupancy
permit is less than two years old are exempt from operation of the
it is likely that the operation of the Act will be expanded in
the future to include other types of commercial buildings, retail
buildings, hotels, car parks and health care facilities.
There will be a 12 month transition period commencing on 1
November 2010. During the transition period, a valid National
Australian Built Environment Rating System (NABERS) rating can be
registered in place of a Building Energy Efficiency Certificate
(BEEC), and included in the relevant advertisement.
Owners, landlords and sub-landlords who do not hold a current
NABERS rating (one that is less than 12 months old), must apply for
one or obtain a BEEC. Given that considerable information is needed
to obtain a NABERS Energy rating, owners, landlords and
sub-landlords must urgently ensure that they have access to all the
required data and arrange for an accredited energy efficiency
assessment without delay.
Sale and leasing considerations
For a sale of a qualifying commercial office building, the Act
has only two requirements for compliance; registration of a valid
current BEEC and compliance with the advertising requirements under
For leases and sub-leases of qualifying commercial office
buildings, the Act raises a number of issues that landlords,
sub-landlords and tenants need to consider. Examples include an
obligation on the tenant to provide the necessary information to
enable disclosure and who bears liability for compliance costs and
ongoing costs of renewing the NABERS rating and BEEC. It is,
therefore, important that landlords and sub-landlords consider
including provisions in new leases and sub-leases to deal with the
consequences of compliance with the Act, and recovery or
apportionment of the costs of disclosure and compliance.
For existing leases, the Act gives accredited assessors the
authority to compel tenants to provide data and access in order to
prepare a BEEC.
Given that the Act is likely to be expanded to apply to other
types of buildings, it is prudent to consider including similar
provisions in leases and sub-leases for other types of buildings,
in readiness for the expansion.
Owners, landlords and sub-landlords must act quickly in
preparing for compliance with the Act. Demand for accredited
assessments is likely to be high and owners and landlords may find
themselves on a waiting list. Failure to comply with the Act by 1
November 2010 will inevitably result in delays in selling or
leasing the building and may also result in heavy penalties.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This review has abstracts of recent developments relating to pollution and contaminated land in Australian jurisdictions.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).