Australia: Mandatory Disclosure for Commercial Office Buildings Has Arrived

Last Updated: 1 April 2010


On 18 March 2010 Greg Combet, the Minister assisting the Minister for Climate Change and Energy Efficiency, tabled the Building Energy Efficiency Disclosure Bill 2010 (Bill). The tabling of the Bill is the final piece of the jigsaw puzzle which commenced in December 2004 when Mandatory Disclosure of Commercial Building Energy Efficiency was first proposed under the Stage 1 Implementation Plan of the National Framework for Energy Efficiency, a joint initiative of the Commonwealth, State and Territory Governments under the Ministerial Council on Energy.

More recently, in November 2009, the Federal Government released a Regulation Document after industry consultation, which outlined the likely key elements of the scheme but which left many aspects of the detail of the scheme still to be articulated. The draft legislation which has now been released addresses many of these aspects, but as we explain below, the ambit of operation of many of the key obligations will be dependent on definitions, methods and standards to be set out in regulations which have not yet been released.

Why Mandatory Disclosure?

The built environment sector is a significant contributor (estimated somewhere in the order of 30%) to Australia's greenhouse gas emissions. Despite this, the built environment sector is not covered by the Government's proposed Carbon Pollution Reduction Scheme (CPRS).

The proposed mandatory disclosure legislation coupled with changes to the Building Code of Australia are the key policy tools being implemented by the Federal Government to reduce emissions in the built environment sector. The Federal Government is of the view that there are persistent market barriers to energy efficiency and that mandatory disclosure will address these market barriers.

Likely commencement date of Mandatory Disclosure

Assuming the Bill is passed, the commencement date of the legislation is 1 July 2010 when the scheme administration will commence, however, the obligation on parties to disclose will occur on a day to be fixed by proclamation of the Governor General which is anticipated to be around October 2010 but no later than 31 December 2010.

What Buildings are covered by the Bill?

The Bill has been drafted from the perspective that the disclosure requirements apply to buildings and areas of buildings that are capable of being used as an office and are of the kind determined by the Minister by regulation. At this stage the regulations have not yet been released, however, it is expected that the disclosure obligations will only apply to buildings and areas of buildings that exceed the minimum size threshold of 2,000 square metres in net lettable area and that strata buildings will be excluded. In the November 2009 Regulation document it stated that mandatory disclosure would only apply to class five buildings under the Building Code of Australia, however, the Explanatory Memorandum accompanying the Bill suggests that a wider definition of building may be utilised and there is no reference to class five buildings.

When do you disclose?

The Bill is designed so that disclosure occurs as early as possible and before the commencement of any negotiations involving the sale, lease or sublease. Essentially any offer or the inviting of offers will be caught.

Further at any time that a property or tenancy is advertised for sale or letting, such advertisement must include the energy efficiency rating for the building. What this will mean in practice is not yet known and will also be the subject of the regulations. What is important, however, is that the penalty regime sets a maximum of 1,000 penalty units ($110,000 fine) for failure to include the rating in the advertisement and a separate contravention will occur on each day that the owner or landlord fails to comply with the requirement so that the maximum penalty may well be in excess of $110,000. In addition, each separate advertisement that does not include an appropriate energy efficiency rating will be considered a separate contravention. The financial consequences of failing to include the energy rating in any advertisements are therefore significant.

The Bill is also drafted in such a manner that it is designed to capture both standard property transactions such as sales, leases and subleases that take place through negotiation, contract exchange and settlement and also more complex transactions such as call options, put options, irrevocable offers and agreements for lease. It does not, however, appear to cover the transfer of buildings or areas of buildings through the sale of shares or units in the entity owning the building although until the regulations are tabled this cannot be ruled out.

The Bill also includes the right for a prospective purchaser, tenant or subtenant to request disclosure in writing.

What must be disclosed?

A valid, current and registered Building Energy Efficiency Certificate (BEEC) must be disclosed to the potential purchaser, tenant or subtenant.

The Bill prescribes the contents of a BEEC and the conditions under which a BEEC will be regarded as current, valid and registered.

The BEEC must contain three elements:

  1. an energy efficiency rating;
  2. an assessment of the energy efficiency of the lighting; and
  3. energy efficiency guidance.


The assessment methods and standards for the BEEC will be determined by the Secretary by regulation. The Explanatory Memorandum discloses that for the purposes of the energy efficiency rating, the assessment methods and standards will apply the protocols of the National Australian Built Environment Rating System (NABERS) for energy efficiency. Interestingly both the Bill and the Explanatory Memorandum are silent as to whether green power will be excluded from the rating.


The assessment of the energy efficiency of the lighting is only in relation to the lighting which might reasonably be expected to remain after the transaction, that is, transfer to the incoming owner, tenant or subtenant. How this will be determined is unclear. Further, the assessment methods and standards are not specified in the Bill and will be determined by the Secretary by regulation. The Explanatory Memorandum states that it is expected that the regulation will include rules for determining the lighting which might reasonably be expected to remain after the transaction.

Energy Efficiency Guidance

The form of energy efficiency guidance will also be determined by the Secretary through regulation although the Explanatory Memorandum has indicated that the guidance will be generic and designed to initiate investigation of specific improvement that may be carried out on a particular building or area of building.

The Bill also leaves the door open to allow the Federal Government to introduce additional items to be included in a BEEC by regulation in the future, such as details of on site renewable or low emissions energy sources, green power usage and past year's energy efficiency ratings.

What does current mean?

The BEEC will only be current for a period of up to 12 months and may in certain circumstances be for shorter periods where the energy efficiency rating or assessment of the lighting energy efficiency was completed at a substantial period prior to the registration of the BEEC.

What does valid mean?

A BEEC will be valid if the issuing authority is satisfied that:

  • the energy efficiency rating is appropriate for the building when applying the assessment method and standards, and
  • the assessment of the lighting energy efficiency is appropriate for the building or the area of the building when applying the assessment methods and standards.

Building Energy Efficiency Register

The Bill provides for the establishment of an electronic register for BEEC's known as the Building Energy Efficiency Register. This Register will be accessible to the public. The Register may also include details of past BEEC's that are no longer current to inform potential purchasers, tenants and subtenants of the historical performance of buildings.

The Secretary has the power to remove from the Register any BEEC if it has been found by audit that either the energy efficiency rating or the assessment of the energy efficiency of lighting has not been carried out in accordance with the prescribed assessment methods and standards.

The Secretary may, but is not obliged to, alert the relevant owner, tenant or subtenant of the removal of a BEEC from the Register.

Will there be any exemptions from disclosure?

There is no automatic right of exemption under the Bill. In each case it will be necessary to apply to the Secretary to receive an exemption.

The classes of exemption specified in the Bill are:

  • if the building or the area of the building is used for police or security operations,
  • where it is not possible to conduct a building assessment to obtain a BEEC in accordance with the prescribed methods and standards,
  • regulations may also be made which will generally describe the types of buildings or areas of buildings for which the Secretary may grant an exemption from disclosure.

It is expected that the regulations would prescribe a category exemption for newly constructed buildings or buildings that have undergone major refurbishments and which are vacant or not fully occupied for an extended period such that it is not possible to assign an energy efficiency rating. More importantly whether or not the Secretary grants the exemption is at the discretion of the Secretary.

Information gathering

One of the concerns raised during the consultation process was the potential difficulties of an owner of a building securing the information which it required in order to achieve an energy rating and BEEC.

The Federal Government has addressed this concern in the Bill by empowering an accredited assessor who has been appointed by the person seeking to provide a BEEC (which in most cases will be the owner or head landlord) to request the owner, tenant or subtenant of a building or area of building to provide the information that is necessary for the purposes of producing the BEEC.

Further, the Bill empowers the accredited assessor to request that an owner, tenant or subtenant provide access to a building or area of the building for the purposes of producing a BEEC. Failure to comply can give rise to a maximum fine of $22,000 for an individual and $55,000 for a corporation. There is, however, a right for an owner, tenant or subtenant who is the subject of a notice for information or access to seek an exemption from the Secretary in respect of the information and/or access that is requested. Again this exemption is discretionary and more importantly the Bill does not prescribe a minimum period within which the Secretary must grant or reject an application for an exemption. Nor does the Bill include an exemption from the civil penalty provisions prescribed in the Bill in cases where the Secretary is taking longer than the period specified in the notice to produce information and/or provide access to respond to the request for exemption.

The apparent policy behind this is a concern that if an explicit legislative provision had been included in the Bill it may have the undesired effect of exemptions being sought as a delaying tactic by applicants wishing to avoid their obligations without good reason.

Penalties and offences

The Bill includes numerous provisions setting out a regime for offences and prescribed penalties for failure to comply with the provisions of the Bill and include:

  • If an owner offers to sell the building, invites offers to purchase the building or offers or invites offers to lease a building without a current, valid and registered BEEC the owner will be liable to a maximum fine of $110,000. If the contravention continues there will be a separate contravention in respect of each day the contravention continues.
  • Failure to provide a copy of a valid, current BEEC within a reasonably practicable period after being requested to do so may result in the owner or head landlord being liable to a maximum fine of $38,500 in the case of an individual and $110,000 in the case of a corporation.
  • Advertising a building for sale or lease without including a reference to the rating in the prescribed format will result in the owner of the building being liable to a maximum fine of $110,000 and the possibility of the fine increasing by each day that the advertisement is published.

There is also the prospect of imprisonment of two years if a person uses, copies or discloses information that is obtained or generated as part of obtaining or issuing a BEEC unless the information is used or copied for the purposes of issuing a BEEC.

Owners, landlords and tenants will also have a right to recover damages from an assessor for any loss suffered as a result of the assessor not applying the methods and standards prescribed in the Bill or not complying with the assessors' conditions of accreditation when carrying out an assessment for the purposes of obtaining a BEEC.


The Bill contains extensive enforcement provisions including establishing the power of magistrates to issue monitoring warrants to empower an auditor to enter a building where consent to enter has not been voluntarily provided by the occupier.

If the penalty provisions are not enough there is also a name and shame register whereby persons who are responsible for two or more instances of non-disclosure within a period of 12 months will be named on the register.

More information

We have been closely following the development of the mandatory disclosure requirements. If you require further information about the content of the draft Bill, please contact us.

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

Click to Login as an existing user or Register so you can print this article.

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”

Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions