June 30, 2017

From 1 July 2017, the mandatory disclosure threshold on commercial office space will be lowered from 2000 square metres to 1000 square metres.

Building owners are encouraged to seek independent advice to understand their disclosure obligations under the Commercial Building Disclosure (CBD) Program. Some owners and lessors of smaller commercial office buildings may not be aware of the CBD program, and may not be aware of their obligations.

What is involved?

The obligation is to disclose a Building Energy Efficiency Certificate (BEEC) which requires two components:

1. National Australian Built Environment Rating System (NABERS) Energy base building rating; and
2. a Tenancy Lighting Assessment (TLA) for the relevant areas of the building.

The NABERS and TLA certificates are paired up to form a BEEC, which is valid for up to 12 months.

When the space is to be sold, leased or subleased, the certificate must be valid, current and registered on the CBD program’s online central registry.

The NABERS Energy star rating must be disclosed in any advertisement about the sale, lease or sublease of the office. The rating is to be exclusive of green power.

Changes to Tenancy Lighting Assessment

Tenancy Lighting Assessment certificates are now valid for a period of 5 years if the tenancy lighting on any given level has not changed. If the lighting on a floor or number of floors is upgraded with say, new efficient lighting, an owner may elect to repeat the TLA before the assessment expires.

The Tenancy Lighting Assessment will benchmark the existing tenancy lighting against best practice. Accredited assessors will complete a survey of the lighting and enter data into an online calculator.

About the CBD Program

“Mandatory Disclosure” requirements under the Commercial Building Disclosure (CBD) program came into effect on 1 November 2010.

The national program has helped to ensure that credible and meaningful energy efficiency information is available for prospective purchasers and lessees of commercial office space.

Up until 1 July 2017 the program required owners and lessors of commercial office space, with an Net Lettable Area (NLA) of 2,000m² or more, to disclose the energy efficiency rating to prospective purchasers and tenants when the space is to be sold, leased or subleased.

To this date over 1600 individual buildings nationally had received a Building Energy Efficiency Certificate at some point in time.

Types of transactions

The following transactions do not create a CBD disclosure obligation, even if the space is disclosure affected:

• The sale of a building through the sale of shares or units or the sale of a partial interest in a building
• Leases and subleases of 12 months or less (including any option to extend),
• Building owners who receive unsolicited offers for the sale, lease or sublease of their office space.

Accredited Assessors

Assessments for BEECs must be undertaken by NABERS assessors who have also been accredited under the CBD program.

Further details about the CBD program are available from www.cbd.gov.au.