Frequently asked questions (FAQs)
Disclaimer
The FAQs and suggested solutions (the materials) contained on this website are not
legal advice and should not be taken to indicate the Commonwealth's commitment to
a particular course of action. Different solutions and outcomes may apply in individual
circumstances. The Commonwealth recommends that users exercise their own skill and
care with respect to their use of the materials and that users carefully evaluate
the accuracy, reliability, currency, completeness and relevance of the materials
for their purposes. The Commonwealth does not guarantee the accuracy, reliability,
currency or completeness of, the materials, and assumes no legal liability or responsibility
for the information contained in the materials. Appropriate independent and professional
advice relevant to your own particular circumstances should be sought if you consider
the materials could be potentially relevant to you
To view the responses to questions submitted from stakeholders at the information
seminars, please view the
Responses to Seminar questions.
Law Society SA 2012
When did compliance under the Building Energy Efficiency Disclosure Act 2010
(BEED Act) become compulsory?
The BEED Act was passed by Parliament on 24 June 2010, with legislation commencing
on 1 July 2010.
From 1 November 2010 disclosure obligations commenced with a transition period which
required only a NABERS Energy rating to be disclosed in sale and lease advertisements.
From 1 November 2011 full Building Energy Efficiency Certificates (BEECs) are required
for disclosure affected buildings or areas which are being sold, leased or sub-leased.
NABERS Energy ratings are also required to be included in related advertisements.
There are some exceptions and exemptions to the BEED Act.
What is the trigger for disclosure under the BEED Act?
The objective of the CBD program is to overcome energy efficiency information barriers
during the sale, lease or sublease of disclosure affected office buildings. For
this reason, the triggers for disclosure are established so that disclosure occurs
as early as possible before the commencement of substantive negotiations between
parties.
Sections 11 and 15 of the BEED Act set out the circumstances in which a constitutional
corporation has a legal obligation to disclose a BEEC, and include NABERS Energy
ratings in related sale and lease advertisements. Section 12 sets out circumstances
where a non-corporate entity may also have disclosure obligations.
Does the BEED Act apply to Government authorities?
The BEED Act applies to constitutional corporations, and non-corporate entities
as defined in section 12 of the BEED Act.
How do you obtain a BEEC for older buildings?
The age of the building is irrelevant. In most cases a BEEC will need to be obtained
if a building or area that is being sold, leased or subleased is:
- greater than 2,000m2 Net Lettable Area (NLA); and
- used for administrative, clerical, professional or other information-based activities
and includes any support facilities for those activities.
The BEEC is comprised of three key components: 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; and general energy efficiency guidance. All BEECs are published
on the CBD website.
To obtain a BEEC a Commercial Building Disclosure (CBD) Accredited Assessor will
need to be engaged. The assessor will undertake a NABERS rating and a Tenancy Lighting
Assessment and apply for a BEEC on behalf of the building owners or lessors. A list
of accredited CBD assessors is available on the website.
What is the approximate cost of a BEEC for a minimum size building?
The cost of obtaining a BEEC will vary depending on the requirements of the building
or area of the building that is disclosure affected. The industry has advised that
the approximate cost could be between $6,000-$10,000. However the cost of the BEEC
is to be negotiated between the building owner/lessor and the assessor. The Department
of Climate Change and Energy Efficiency (DCCEE) does not charge a fee for processing
the Tenancy Lighting Assessments (TLA) or BEEC applications.
What is the cost of updating a BEEC?
DCCEE maintains only one BEEC per building. The CBD Program does not set fees for
any assessments required under the BEED Act. The fees vary from building to building,
depending on the size, complexity and time taken to carry out the assessment.
For example there may be circumstances when a BEEC and NABERS rating expire at different
times or when owners/lessors need to update a BEEC to sell or lease parts of a building
not previously covered.
Some organisations are opting to align the dates for the NABERS Energy rating and
TLAs to streamline their renewal of BEECs.
Do sub-lessors need to obtain a BEEC and who pays?
Yes. Lessors who wish to sub-lease a disclosure affected part of their tenancy will
need to obtain a BEEC. The costs for the BEEC will be incurred by the lessor.
Is it advisable for building owners or lessors to obtain a BEEC in anticipation
of a future sale or lease of their building?
Yes. Undertaking the necessary assessments for a BEEC (i.e. a NABERS Energy rating
and a TLA) can potentially take up to 8 weeks to complete. Additional time may also
be required to process the BEEC application. Therefore building owners and lessors
of disclosure affected buildings or areas are encouraged to obtain a BEEC as early
as possible to avoid delays for their building transactions.
Do advertisements for disclosure affected buildings need to refer to the BEEC?
No. Section 15 of the BEED Act requires a valid NABERS Energy rating to be included
in advertisements for the sale or lease of disclosure affected buildings or areas.
Reference to the BEEC is not required in advertisements.
All current BEECs are placed on the publically available Building Energy Efficiency
Register on the CBD website.
Is a building disclosure affected if the advertisement indicates that various amounts
of office space are available for lease on several floors, which individually are
less than 2,000m2 ?
Where an offer/advertisement to let multiple spaces within the one building:
- is stated to be for combined spaces that together exceed the 2,000m2 floor space
threshold ; or
- is for an undefined combination of the spaces that includes combining
spaces that together would exceed the 2,000m2 floor space threshold; or
- might
otherwise lead to spaces that in combination exceed the 2,000m2 floor space threshold
being leased together under a single lease;
BEEC will be required for the combined area, unless the building is otherwise excepted
from the BEED Act or the owner or lessor has obtained an exemption under the BEED
Act.
What if the advertisement indicates that the office space available is over 2,000m2
but the lessor only wants to lease part of the space?
In this situation the advertisement still triggers the disclosure obligations set
out in section 15 of the BEED Act as it states that there is 2,000m2 or more of
office space available for lease.
What happens if a floor of a building has a Tenancy Lighting Assessment but a lessor
only wants to lease part of the floor?
If the part of the floor available for lease covers more than 2,000m 2 and a BEEC
has been obtained that covers the entire floor, then the lessor can use the existing
BEEC when marketing/advertising the part of the floor for lease.
If only a TLA has been completed and it is still current then the lessor would need
to engage an Accredited CBD Assessor to complete a NABERS Energy rating and then
apply for a BEEC.
If the part of the floor available for lease is less than 2,000m2 the disclosure
obligations will not trigger because the area does not exceed the disclosure affected
threshold in the BEED Act. Accordingly, the building owner or lessor would not need
to obtain a BEEC prior to advertising or negotiating the lease of this area.
Will breaches of the BEED Act be prosecuted immediately?
Managing compliance is about encouraging stakeholders to comply voluntarily and
dealing with contraventions appropriately.
All potential contraventions of the BEED
Act are prioritised for investigation using a risk management approach. Action will
be based on the particular circumstances of each case.
The Education, Compliance
and Enforcement Policy (the policy) sets out DCCEE’s approach to facilitating compliance
with the BEED Act and outlines the Department’s enforcement powers under the BEED
Act. A copy of the policy is available for viewing on the CBD website.
Is it proposed to alter the CBD Program once carbon trading comes in?
To my knowledge no aspect of the CBD Program will change as a result of the Carbon
Trading scheme coming into effect.
Are there plans to include other categories of buildings prior to 2014?
Consultations are being held with key stakeholders to discuss whether other building
types should be covered by the BEED Act. If agreement is reached there will be sufficient
lead time to allow industry to prepare for any new requirements.
Definitions
What is the definition of a building ‘owner’? The Act refers to constitutional corporations
that own or lease a disclosure affected building (or a disclosure affected area
of a building). Is a partnership or a single person exempt from the disclosure obligations
and, if yes, are they required to submit an exemption application?
There is an obligation on ‘constitutional corporations’ which own or lease a disclosure
affected building (or a disclosure affected area of a building) to:
- have a valid, current building energy efficiency certificate (BEEC) (or a NABERS
Energy rating during the transition period) registered when offering the disclosure
affected building (or disclosure affected area of the building) for sale, lease
or sublease (section 11 of the Act); and
- include a valid, current NABERS Energy rating for the building in any advertisements
for the sale, lease or sublease of the disclosure affected building (or disclosure
affected area of the building) (section 15 of the Act).
There is no definition in the Act of an ‘owner’. The Act defines ‘constitutional
corporations’ as a corporation to which paragraph 51(xx) of the Constitution applies,
namely ‘foreign corporations, and trading or financial corporations formed within
the limits of the Commonwealth’.
The above obligations therefore do not apply to building owners and tenants who
are not ‘constitutional corporations’, for example a natural person (i.e. a human
being in the ordinary sense) or the members of a partnership who own a building
that they wish to sell or let.
There is no requirement for non-corporate entities to apply for an exemption from
sections 11 or 15 of the Act.
However, there are circumstances in which a non-corporate entity may be required
to disclose a valid, current and registered BEEC. Under section 12 of the Act, if
a ‘constitutional corporation’ is looking to purchase, lease or sublease a disclosure
affected building (or a disclosure affected area of a building), it has the right
to require a ‘person’ who is the owner or lessee of the building to give them a
copy of a valid, current and registered BEEC (or a NABERS Energy rating during the
transition period) for the building (or area of the building).
What is ‘office space’?
Office space is used or capable of being used as an office for administrative, clerical,
professional or other information-based activities and includes any support facilities
(e.g. break-out areas and rest rooms) for those activities. The phrase ‘capable
of being used’ is intended to encompass office spaces that are vacant at the relevant
time.
What if my building is less than 75 per cent office space?
Office space is the space for administrative, clerical, professional or other information-based
activities including any support facilities (e.g. break out areas) for those activities.
If the total office space comprises less than 75 per cent of the building by net
lettable area (or gross lettable area if net lettable area is unavailable), then
the building is not disclosure affected and it does not contain any disclosure affected
areas. This means that the sale, lease or sublease of all or part of the building
will not attract the energy efficiency disclosure obligations and building owners
or lessors do not need to take any action at this time.
Building owners and lessors should be aware that the 75 per cent threshold for mixed use buildings
is an interim measure and will be reviewed. In the event that the rule is revised, industry will be
given clear advice and appropriate timeframes to adapt to any changes.
Building owners and lessees in buildings with less than 75 per cent office space
may voluntarily comply in the meantime by including their NABERS ratings on the
Building Energy Efficiency Disclosure
Register.
What is a disclosure affected area?
The Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination
2011 (the Determination) provides that ‘disclosure affected area’
includes physically separate spaces within a building where those spaces:
- share access to the outside of the building (including via internal access between
spaces); and
- may be grouped together for the purposes of lease of sublease.
Shared access is intended to cover all scenarios where a person can access the relevant
spaces by passing through the same entrance. This is the case whether or not the
person has to pass through other physically separate spaces and the means by which
they do so.
The most common example of shared access is in a classic office tower. Such buildings
are typically characterised by an entrance to a common foyer from which every floor
can be accessed, either directly or by using the lifts or stairs. In such towers,
separate floors would generally be regarded as part of the same area if they may
be grouped together for the purposes of lease or sublease.
The practical effect is that building owners considering leasing, or lessees considering
subleasing more than one floor in such buildings simultaneously, should aggregate
the net lettable area for office activities on each floor for the purpose of determining
whether the area meets the minimum 2000m2 threshold.
Separate areas
The definition of ‘disclosure affected area’ is also intended to clarify that physically
separate spaces within a building that do not share access to the outside of the
buildings are regarded as separate areas.
One of the more common examples of separate areas is in a large building in an industrial
complex comprised of multiple units separated by party walls with no internal access
and each with separate access to the outside.
The practical effect is that building owners considering leasing, or lessees considering
subleasing multiple units in such buildings simultaneously, need not aggregate the
total space across the different areas. Each unit will only be a disclosure affected
area if the net lettable area for office activities is greater than 2000m2
on its own.
What does ‘net lettable area’ and ‘gross lettable area’ mean?
Net lettable area and gross lettable area have the same meaning as in ‘Method of
Measurement for Lettable Area’ published by the Property Council of Australia and
available from their website at
www.propertyoz.com.au.
What if my building or area is measured using the BOMA 1989 or BOMA 1985 Method
of Measurement?
The Building Owners and Managers Association (BOMA) methods of measurement for gross
and net lettable areas are substantially identical to those in the Property Council
of Australia’s ‘Method of Measurement for Lettable Area 1997’. The measures
can be used interchangeably for the purposes of complying with the Building Energy
Efficiency Disclosure Act 2010.
Disclosure obligations
Can a NABERS Energy Commitment Agreement be disclosed instead of a NABERS Energy
rating?
No. However, a NABERS Energy Commitment Agreement rating can be disclosed in addition to a NABERS Energy rating,
for example when an existing building is undertaking a retrofit. A NABERS Energy Commitment Agreement rating can
also be displayed when a building has an exception or exemption from the energy efficiency disclosure obligation.
For further information, see Exemptions. Refer to the guidance note on advertising
for examples on displaying ratings.
Would a building owner be penalised if a tenant subleased their office space of
more than 2,000 square metres without disclosing the required information?
For subleases of a disclosure affected building (or a disclosure affected area of
a building), the disclosure obligations fall on the lessee to obtain and register
a Building Energy Efficiency Certificate (BEEC) - or a NABERS Energy rating during
the transition period to 31 October 2011. A tenant who does not obtain and register
a BEEC (or NABERS Energy rating during the transition period) before offering the
space for sublease, is liable for a civil penalty under section 11 of the Building
Energy Efficiency Disclosure Act 2010.
Are short-term leases covered by the Act?
Short-term leases and subleases of 12 months or less (including any option to extend
the lease or sublease) do not trigger disclosure requirements under the Building
Energy Efficiency Disclosure Act 2010. All other lease arrangements are
subject to the disclosure obligations in the Act. For example, a six month lease
with an option to extend for another six months would not trigger the disclosure
obligations because the total proposed lease term would be 12 months or less. However,
a six month lease with an option to extend for 12 months would trigger the disclosure
obligations because the total proposed lease term would be more than 12 months.
For more details see Exemptions.
Do disclosure obligations apply to a medical centre (e.g. a multi-tenanted building
containing premises occupied by medical practitioners)?
Provided the net lettable area is at least 2,000m2, a medical centre
may be disclosure affected. It will depend on the nature of the services delivered
in the centre. A medical centre comprising consulting rooms only, will generally
be disclosure affected. On the other hand, a medical centre more analogous to a
hospital comprised mostly of rooms for the carrying out of diagnostic imaging or
medical procedures, will not generally be disclosure affected. If you are uncertain
about the status of a particular building, owners and sublessors should seek to
obtain a NABERS Energy rating.
However, if the characteristics of the building to which the disclosure obligations
would otherwise apply are such that it is not possible to assign a rating using
the NABERS Energy rules, the owner or lessee may apply for an exemption.
If an accredited assessor is unable to apply the NABERS Energy rules, because of
the characteristics of the building, then the person who would otherwise be subject
to the disclosure obligation can apply for an exemption to the Secretary of the
Australian Government Department of Climate Change and Energy Efficiency. Applications
must be accompanied by a supporting statement from the accredited assessor, which
explains why a rating cannot be assigned using the NABERS Energy rules. Applications
will be considered on a case-by-case basis. See
Exemptions for more details.
Do I need to add together separate office spaces in separate buildings on one title?
No. Where multiple buildings are contained within the one title, the net lettable
area of the office component of each office building should not be aggregated to
determine whether the 2,000m2 threshold is reached.
If I sell or lease a new building before a certificate of occupancy is granted,
is it disclosure affected?
No. New buildings are excepted from the energy efficiency disclosure obligations
prior to, during and after construction for two years from the date the certificate
or occupany (or equivalent) is issued for the building.
What about buildings held under strata title?
An office building is not disclosure affected if it is held under strata title (however
described in the relevant state or territory).
Do I need to continuously maintain a valid Building Energy Efficiency Certificate
(BEEC)?
There is no requirement under the BEED Act to continuously maintain a valid BEEC.
A BEEC is only required to be obtained and registered on the Building Energy Efficiency
Register on the CBD website prior to a disclosure affected building or area of a
building being advertised or offered by a constitutional corporation for sale, lease or sublease.
A BEEC is also required to be registered if such a building or area is , lease or sublease by an
entity (even if not a constitutional corporation) and an interested constitutional corporation
requests that a BEEC be provided to it.
Building owners or lessors may decide, as part of their business planning, to carry
out annual NABERS Energy ratings and Tenancy Lighting Energy Efficiency Assessments
to continuously maintain a valid BEEC. Some owners or lessors may choose to instead
undertake a NABERS Energy for Offices assessment annually but to carry out a Tenancy
Lighting Energy Efficiency Assessment only if and when required (noting that these
assessments may be carried out relatively quickly). Building owners or lessors will
need to make a judgement about the appropriateness and cost effectiveness of maintaining
a continuous rating, and the timing of undertaking ratings to maintain continuity.
It is recommended that a building owner or lessor prepare for obtaining BEECs by
ensuring that they have access to all the necessary data and information that is
needed to carry out a NABERS Energy rating and Tenancy Lighting Energy Efficiency
Assessment; for example, electricity and gas bills from their utility, documents
validating Net Lettable Area, lease documents and after hours air conditioning request
logs. Building owners and lessors can discuss these issues with their NABERS assessor.
Parties may also consider including clauses in leases or agreements to ensure ongoing
access to the required information. Being prepared will facilitate the timely assessment
of buildings for the purposes of obtaining a BEEC.
Can current NABERS Energy ratings that are carried out in the transition period
be used in BEECs?
NABERS Energy ratings that are carried out by NABERS accredited assessors in the
transition period from 1 November 2010 to 31 October 2011, and that are current
and valid, will be able to be used to obtain a Building Energy Efficiency Certificate
(BEEC). In such a case, the BEEC will be stated to expire at the same time as the
underlying NABERs Energy rating (which is valid for 12 months from the date of certification).
Proposed expansion of the CBD program
Will the program be expanded to other commercial buildings?
The Commercial Building Disclosure (CBD) program applies to office buildings in
the first instance (Phase One) because:
- there is a readily available office building energy rating tool under NABERS
- carbon emissions associated with office buildings are projected to have almost doubled
between 1990 and 2010, from 8.5 mega tonnes to 16.5 mega tonnes
- office buildings have relatively frequent sale and lease transactions and will enjoy
higher benefits from disclosure.
Under the National Strategy on Energy Efficiency, governments are
considering expanding disclosure to other types of commercial buildings including
hotels, retail centres, schools and hospitals. This will be subject to further regulatory
impact assessment and consultation with industry to decide on appropriate rating
tools and disclosure mechanisms.
The Standing Committee on Energy (under the Ministerial Council on Energy) has agreed
to defer consultation until 2012 which would result in Phase 2 being deferred until
2014, subject to the outcomes of the consultation process.
Refurbished buildings
For information about refurbished buildings please refer to the guidance note 'New disclosure obligations
for refurbished buildings'.
Unsolicited offers
How are unsolicited offers affected?
The energy efficiency disclosure obligation in section 11 of the Building Energy
Efficiency Disclosure Act 2010 potentially applies in relation to four types
of conduct. These are where the constitutional corporation is:
- offering to sell the whole building;
- inviting offers to purchase the whole building;
- offering to let or sublet all or part of the building;
- inviting offers to lease or sublease all or part of the building.
Where do unsolicited offers to purchase, lease or sublease fit into this framework?
The energy efficiency disclosure obligations would be triggered as soon as the constitutional
corporation that received an unsolicited offer enters into any kind of negotiation
with the person who made the offer about the terms of sale, lease or sublease.
This is because the constitutional corporation would be regarded as engaged in at
least one of the four types of conduct listed above depending on the particular
circumstances.
What should I do if I receive an unsolicited offer?
Unless you propose to accept the offer unconditionally, you should not enter into
negotiations without first registering a valid, current building energy efficiency certificate.
You may also reject the offer.
What should I do to prepare for an unsolicited offer?
Building owners and prospective sublessors who wish to be able to entertain unsolicited
offers without delay should consider maintaining a valid current Building Energy
Efficiency Certificate (or NABERS Energy rating in the transition period) at all
times.
Given that extending a lease on different terms may attract the energy efficiency
disclosure obligations, building owners and sublessors with tenants approaching
the end of their current lease or sublease in particular, may wish to prepare by
registering a NABERS Energy rating.