In 2010 the Building Energy Efficiency Disclosure Act 2010 was introduced requiring owners of premises with an area of more than 2,000m² to disclose to purchasers or tenants the energy efficiency of the premises. Owners of large office premises across the country have been living with this law for many years. There are not a lot of premises in the Hunter Region that presently come under the act as their area is smaller than 2,000m².
In July this year, the net will be widened so that it will now apply to premises with an area of 1,000m² or more. The lowering of the threshold in the area of the premises now abuts the threshold of the Retail Leases Act, which applies to retail premises with an area of less than 1,000m². Owners of relevant properties need to be abreast of these laws or face the legislative consequences. Retail premises with an area of more than 1,000m² will not automatically come under the legislation unless they are used as an office.
It was always the aim of the Building Energy Efficiency Legislation to make sure that buyers and tenants knew how efficient premises were before they made a legal commitment to those premises.
The law provides that a seller or landlord of relevant office premises has to obtain a certificate that discloses the energy efficiency of the building before they can advertise the property for sale or lease.
The certificate to be obtained by the owner must be issued under the National Australian Built Environment Rating System (NABERS) and also has to provide an assessment of the lighting capacity of the building. This NABERS certificate has to be registered before any marketing campaign can be implemented. A valid certificate must have been issued within the last 12 months and must be publically accessible on the Building Energy Efficiency Register.
The Building Energy Efficiency scheme is more onerous in terms of disclosure than other laws that require disclosure, such as the requirement for a vendor when selling property to disclose title documents, zoning and drainage information by requiring the relevant certificates to be annexed to the Contract of Sale.
The intention of the scheme is to encourage owners to make their building more energy efficient. They can obtain a marketing edge by attracting buyers or tenants to their efficient premises. Some owners will, no doubt, see the increased coverage of the scheme as onerous and burdensome.
Owners need to appreciate that purchasers or tenants wanting office premises with an area of more than 1,000m² are likely to be government departments, large corporations or entities that are very aware of the legislation and the consequences of noncompliance. A quick scan of the web reveals that there are about 10 premises offered for rent at the moment that are subject to the legislation.
There are many ways that buildings can be made more efficient. A building can be made efficient by installing LED lighting, shading or insulation and double glazing to reduce the need for air conditioning or by ensuring that lighting, heating and cooling systems can be easily controlled and managed effectively.
It is a fact that heating, ventilation and air conditioning systems account for most of the energy costs in a commercial building.
Most hunter building owners and managers are very aware of the legislation and are making their buildings more energy efficient than they were previously.
Craig Doyle has been a Solicitor for more than 30 years and is an accredited specialist in business law and commercial litigation. Craig specialises in commercial transactions and documentation, commercial property and related disputes.