By Partner, Tony Butler

Amendments to the Building Energy Efficiency Disclosure Act will come into effect on 1 July.  These amendments will affect commercial building owners and lessees intending to sell, lease or sublease their property after this date.

The key amendment is the reduction of the commercial office space threshold from 2,000 square metres to 1,000 square metres.

The aim of the amendment is to reduce greenhouse gas emissions and improve building energy efficiency in the commercial building sector.  This will allow prospective purchasers and tenants to make more informed decisions about energy efficiency when purchasing or leasing smaller commercial buildings.

Who is affected?

1. Most building owners who are selling or leasing office space with a net lettable area of 1,000 square metres or more.
2. Most tenants who are subleasing part of their tenancy with a net lettable area of 1,000 square metres or more.

There are some exemptions to this.  As detailed in section 5 of the Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination 2016, a building is not disclosure affected if:

• the building is new and a Certificate of Occupancy has not yet been issued or is less than two years old;
• the building has had a major refurbishment and a Certificate of Occupancy is less than two years old;
• the building is held under a strata title system; or
• mixed use buildings where total office space makes up less than 75% of the building by net lettable area.

No sale, lease or sublease without a BEEC

Section 11 of the Act specifies when disclosure of a BEEC is required.  Importantly, it should be noted that an owner of a disclosure affected building must not offer, continue to offer, invite offers or continue to invite offers to sell or lease their property without a valid and current BEEC.  This also applies to tenants wishing to sublet part or all of their leased premises in a disclosure affected building.  Any person or corporation found to be in breach of this section of the Act may incur civil penalties of up to $121,900.

Disclosure Obligations

 BEECs are to be provided to potential buyers and lessees upon request and must be made publicly available on the Building Energy Efficiency Register, whereas the NABERS (National Australian Built Environment Rating System) and tenancy lighting assessments must be included in any advertising material.  BEECs are valid for 12 months and are undertaken by accredited assessors.

If you are unsure about whether your building is subject to compulsory disclosure, we encourage you to seek our legal advice before putting your property on the market.