By Tina Perinotto and Andrew Starc

12 August 2010 – Mandatory disclosure of energy efficiency for large offices will at last take effect on 1 November.

After a series of delays and lobbying to head off unforeseen problems, the industry has won itself a year-long transition period and a number of exemptions and exceptions. The full scheme won’t be effective until November 1, 2011.

Just over a week ago, the Federal Government launched a new website for the program – and a new name – Commercial Building Disclosure. (See www.cbd.gov.au). It also carried out a series of “webinars” to inform assessors that would be working with the scheme.

But there is still a lot to work out. Parts of the website, with critical information and guidance, are still being developed and some key industry advisers are working with the Government on the final version of the scheme.

For now, office tenancies won’t have to bother at all with an energy certificate. Only the base buidling, or the whole building, will need to report its energy efficiency through a NABERS Energy certificate.

When the scheme goes fully operational on 1 November 2011, any office of more than 2000 square metres that is to be sold or leased will need to be have a building energy efficiency certificate, or BEEC.

A BEEC will include:

•    A NABERS Energy star rating for the building.
•    An assessment of tenancy lighting in the area of the building that is being sold or leased.
•    General energy efficiency guidance.

The BEEC must be disclosed and made publicly accessible on the Building Energy Efficiency Register accessed through the CBD website.

The NABERS Energy star rating must also be included in any advertisement for the sale, lease or sublease of the office space, the website says.

For buildng energy experts, the launch of the scheme will be a major step forward for the Australian property industry, despite the stepped approach.

PC Thomas, whose company Team Catalyst is an expert in NABERS and also trains NABERS assessors, says the CBD program means the Australian property industry will step up to the world stage in terms of how it will manage the sector’s energy efficiency.

It was more than reasonable to have a transition period, Mr Thomas said. “What they are saying is that you have a transition period. You are allowed to use a NABERS rating and you don’t need a BEEC during the transition.”

Property Council of Australia chief executive officer Peter Verwer says a key sticking point has been the lighting assessment tool and how it would work. The tool is meant to assess lighting systems on a watt-per-square-metre basis of a tenancy.

Mr Thomas said he was “hesitant to say anything about it because, at this point, I haven’t seen anything”. The Federal Government is developing the assessment procedure and will look to run an assessment trial on a small sample of buildings, he said.

A key question about the assessment tool is how well it will capture the operational efficiency of the lighting system and its controls.

“If you only report watts-per-square-metre it doesn’t capture whether the system is efficient or not. I really doesn’t tell you what kind of controls exist and you can’t really make a judgement,” Mr Thomas said.

How will the CBD work?

A briefing note from law firm Baker & McKenzie has outlined some of the details. The following information has been collated using the briefing note and the CBD website.

It will not be necessary to register a BEEC during the transition period, which allows some leeway for the preparation of both the guidance material and a tenancy lighting assessment until 1 November, 2011.

There are a series of exemptions and exceptions to disclosure, plus a two-year period of grace for new buildings.

A building will not be “disclosure affected” if it has been constructed and an occupation certificate has been issued within two years before a proposed sale or lease date. As a result, new buildings will have a two-year grace period.

A building may be exempt is it is not possible to assign an energy efficiency rating to it.

To claim an exemption, building owners or tenants will need to apply, at a cost of $385, to the Secretary of the Department of Climate Change and Energy Efficiency on a prescribed form to be made available later this month.

Details on exemptions and exceptions that are published on the CBD website include:

Exemptions from the program
An exemption from a disclosure obligation may be sought in the following circumstances:

  • Where a building or area is used for police or security operations.
  • Cases where an energy efficiency rating cannot be assigned because of the characteristics of the building.

Police or security operations

An exemption may be granted if a disclosure-affected office is used by government, police or security agencies. The exemption application must be accompanied by a supporting statement.

Rating cannot be assigned
This class covers disclosure-affected offices for which a rating cannot be assigned under the “methods and standards of assessment”. In practice, this would most likely be because it is not possible for a NABERS Energy base building or whole building rating assessment to be completed.
Possible examples include:

  • Major refurbishments where it is likely that the building is vacant, or not fully occupied, for an extended period such that it is not possible to assign an NABERS Energy rating.
  • Other exceptional circumstances where it is not possible to assign either a NABERS Energy base building or whole building rating.

Applications under this class must be accompanied by a supporting statement made by a NABERS accredited assessor, which details the reasons why a rating cannot be assigned
Applications will be considered on a case-by-case basis. See here

Exceptions to the program
In certain circumstances, there are exceptions to the disclosure obligation for offices that would otherwise be disclosure affected. No action is required by the owner or lessor to be excepted. These exceptions include:

  • Newly constructed office buildings (and areas within such buildings) for which the certificate of occupancy is less than two years old.
  • Strata-titled offices (note: this class of exception will be reviewed if an appropriate methodology becomes available).

The following transactions do not give rise to a disclosure obligation, even if the relevant office space is a disclosure-affected building.

?    The sale of a building through the sale of shares, or units, or the sale of a partial interest in a building.

?    Short-term leases and subleases of 12 months or less (including any option to extend). For example, a six month lease with an option to extend for another six months would not trigger a disclosure requirement. However, a six-month lease with an option to extend for 12 months would trigger a disclosure requirement.

Exemptions from information gathering provisions

The Building Energy Efficiency Disclosure Act 2010 sets out information-gathering provisions that enable accredited assessors to obtain information on, and gain access to, a building or tenancy to conduct an assessment.

Generally, owners and tenants must comply with an information-gathering notice issued by an accredited assessor. However, under certain exceptional circumstances, owners and tenants can apply for an exemption from these requirements.

?    Applications under this category must provide sufficient justification.
?    Applications will be considered on a case-by-case basis.