25 October 2011 – Jones Lang LaSalle has released a Mandatory Disclosure Update Paper to help prepare building owners and tenants for the Commercial Building Disclosure Program, also known as Mandatory Disclosure, which comes into effect from 1 November 2011.
The paper outlines four steps to follow to comply with the new disclosure obligations. These include:
- Determine the eligibility of the area under the Building Energy Efficiency Disclosure Act (2010).
- Review the expiry dates of your NABERS Energy rating and Tenancy Lighting Assessment. If you do not have a current NABERS Energy rating and a current Tenancy Lighting Assessment for the space, appoint an accredited assessor to undertake these ratings. Allow 4-8 weeks for NABERS Energy ratings and Tenancy Lighting Assessments.
- Submit an application to Department of Climate Change and Energy Efficiency for a BEEC. The application must be submitted by a CBD Accredited Assessor and must include the NABERS Energy rating assessment number and the Tenancy Lighting Assessment number(s). Allow up to four weeks to process.
- When you have a registered BEEC, commence transaction on the disclosure affected area.
The Mandatory Disclosure program requires that during the sale, lease or sub-lease of commercial office space that is 2000 square metres and larger, the energy efficiency be disclosed through a Building Energy Efficiency Certificate.
The BEEC consists of three elements – a NABERS Energy rating, energy efficiency guidance and a tenancy lighting assessment. Only the NABERS Energy rating was required to be disclosed during the 12-month transition period from 1 November 2010 to 1 November 2011.
Building owners must obtain and register a BEEC including tenancy lighting assessments for all disclosure affected areas and include the NABERS Energy rating in any advertisement for the sale, lease or sub-lease of the building or area.
Tenants must obtain and register a BEEC including Tenancy Lighting Assessment for all relevant tenancies and BEEC energy efficiency star rating (NABERS Energy rating) for the building in any advertisement for the sub-lease of the building or area.
The paper advises that failure to comply with the scheme may result in severe fines up to $110, 000 for the first day of non-compliance and up to $11,000 for each additional day of non-compliance. .
Director of sustainability at Jones Lang LaSalle, Joel Quintal, said the new disclosure obligations would provide benefits for landlords, tenants and investors alike.
“Landlords can use this opportunity to market the energy efficiency features of their properties. More efficient assets will attract the growing number of tenants that have sustainability on their corporate agenda,” said Quintal.
“Tenants can use the BEEC to make informed decisions on the space they are planning to occupy. The BEEC will tell you how efficient the building is, which will have an impact on operating budgets.
“Investors can use this information to assess the liquidity of their assets as sustainability considerations become part of investment due diligence.”