Legal responsibilities

What is the Act that provides the legal framework?

The legal framework for the Commercial Building Disclosure program is provided by the Building Energy Efficiency Disclosure Act 2010 and a number of instruments made under that Act. Links to these documents are provided below:

• Building Energy Efficiency Disclosure Act 2010
• Building Energy Efficiency Disclosure Regulations 2010
• Building Energy Efficiency Disclosure Act 2010 - Proclamation
• Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination 2011 (Minister’s Determination)
• Building Energy Efficiency Disclosure Determination 2011 (Secretary’s Determination)

This section of the website provides a general summary of the responsibilities arising under the Act. The information in this section is not legal advice and does not take into account your individual circumstances. You should seek your own legal advice about how the requirements of the Act affect you.

What is a constitutional corporation?

Many of the obligations in the Building Energy Efficiency Disclosure Act 2010 apply to constitutional corporations. A constitutional corporation is an entity that falls within the scope of section 51(xx) of the Australian Constitution. Entities that are unsure of their status should seek legal advice.

What is a disclosure affected building or area of a building?

A building (including all area/s in that building) is not disclosure affected if any of the following three circumstances apply:

• 1. the total office space comprises less than 75 per cent of the total space by net lettable area (or gross lettable area); *
• 2. the building is either new or has had a major refurbishment and a certificate of occupancy has either not been issued or was issued less than 2 years prior; or
• 3. the building is held under strata title.

* Note - Please be aware that the 75 per cent threshold for mixed use buildings is an interim measure and will be subject to review by a panel of experts. Once the panel has concluded their review industry will be given clear advice and appropriate timeframes to adapt to any changes, recognising the possible need for metering changes and collection of 12 months data for a NABERS Energy rating.

All other buildings will be disclosure affected where the office space in the building (or area of a building) is greater than 2000m². On this website, for ease of reading, ‘disclosure affected office’ is used to encompass both of these concepts.

The Building Energy Efficiency Disclosure Act 2010 also provides for exemptions from the disclosure obligations (see Exemptions).

Who has legal responsibilities, and when?

There are three main parties that have legal responsibilities under the Building Energy Efficiency Disclosure Act 2010. Note that others may also have certain legal responsibilities under the Act in certain circumstances. You should seek your own legal advice about compliance with the Act.

Building owners

• must obtain a Building Energy Efficiency Certificate (BEEC), in accordance with sections 11 or 12 of the Act when selling or leasing a disclosure affected office building or area of a building
• must include the BEEC energy efficiency star rating for the building in any advertisement for the sale, lease or sublease of the building or area in accordance with section 15 of the Act
• are required to provide information about, and access to, a disclosure affected office if requested by a CBD Accredited Assessor in accordance with section 18 of the Act.

Tenants (including lessors and sublessors):

• must obtain a BEEC, in accordance with sections 11 and 12 of the Act when subletting a disclosure affected office
• must include the BEEC energy efficiency star rating for the building in any advertisement for the sublease of the building or area,in accordance with section 15 of the Act
• an example BEEC is available for information
• are required to provide information about, and access to, a disclosure affected office if requested by a CBD Accredited Assessor in accordance with section 18 of the Act.

Assessors

• must comply with a number of obligations relating to their conditions of accreditation, conduct of assessments and use of information gathered from building owners and tenants.

More detail about these obligations is given in the sections below.

What are the legal obligations?

Under the Building Energy Efficiency Disclosure Act 2010, legal obligations arise in the following circumstances:

• when a constitutional corporation advertises a disclosure affected office for sale, lease or sublease
• when a constitutional corporation offers to sell, lease or sublease a disclosure affected office, or invites offers for the sale, lease or sublease of a disclosure affected office
• when a constitutional corporation requests a Building Energy Efficiency Certificate (BEEC) for a disclosure affected office that is being offered for sale, lease or sublease by another entity (whether or not that entity is also a constitutional corporation)
• when an assessor is gathering the information required for a BEEC and carrying out an assessment

Advertising
Constitutional corporations that wish to sell, let or sublet a disclosure affected office must include the energy efficiency star rating from the BEEC in any advertisement. The requirements for how star ratings must be disclosed in advertisements are specified in the Building Energy Efficiency Disclosure Determination 2010.

To comply with section 15 of the Act, an energy efficiency rating for a building must be expressed:

• by using the rating from 0 to 5 worked out for the building under the NABERS Energy rating rules
• by adding the words ‘-star NABERS Energy rating’ after the number
• for example
  • 4.5-star NABERS Energy rating
  • 3-star NABERS Energy rating
• The rating must be displayed prominently within an advertisement so that:
  • it is clearly visible and
  • it is not obscured
• the number and the text included in the rating is at least as large as the majority of the text contained in the advertisement.

A guidance note on Commercial Building Disclosure Advertising Requirements will aid industry to comply with the new requirements and to avoid accidental non-compliance.

Penalties: Civil penalties of up to $110,000 for the first day and $11,000 for each subsequent day may be imposed by a Court for each breach of a disclosure obligation. Alternatively, the Secretary of the Department of Climate Change and Energy Efficiency can issue an infringement notice of up to $11,000 for the first day and $1,100 for each subsequent day of non-compliance.

Offering to sell, lease or sublease
The objective of the CBD program is to overcome energy efficiency information barriers during the sale, lease or sublease of 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.

Section 11 of the Building Energy Efficiency Disclosure Act 2010 sets out the circumstances in which a constitutional corporation has a legal obligation to disclose a BEEC. These circumstances include:

• if a constitutional corporation owns a disclosure affected building
  • offers or continues to offer to sell the building
  • invite offers or continue to invite offers to purchase the building
  • offers or continues to offer to let the building or
  • invite offers or continue to invite offers to lease the building

• if a constitutional corporation leases a disclosure affected building
  • offers or continues to offer to sublet the building or
  • invite offers or continue to invite offers to sublease the building

• if a constitutional corporation owns a building (whether or not it is a disclosure affected building)
  • offers or continues to offer to let a disclosure affected area of the building or
  • invite offers or continue to invite offers to lease a disclosure affected area of the building

• if a constitutional corporation leases a disclosure affected area of a building
  • offers or continues to offer to sublet the area or
  • invite offers or continue to invite offers to sublease the area.

See Exemptions for information about the exceptions to and exemptions from these obligations.

A BEEC (or NABERS Energy rating in the transition period) can be registered on the Building Energy Efficiency Register at the time of applying to the issuing authority (NSW Office of Environment and Heritage) for the BEEC or rating by ticking the relevant option on the NABERS application form.

Otherwise, use the online form to request the rating of your premises be registered on the Building Energy Efficiency Register, where your premises has a current NABERS Energy rating and is not already listed on the register.

Once a BEEC or rating has been registered for a particular property, it is publicly available on the Building Energy Efficiency Register (see Find a BEEC).

Penalties: Civil penalties of up to $110,000 for the first day of non-compliance and up to $11,000 for each subsequent day of non-compliance may be imposed by a Court. Alternatively, the Secretary of the Department of Climate Change and Energy Efficiency may issue an infringement notice of up to $11,000 for the first day and up to $1,100 for each subsequent day of non-compliance.

Requesting a BEEC
When a building owner, lessor or sublessor is not a constitutional corporation, there is not an automatic obligation to disclose a BEEC when selling, leasing or subleasing a disclosure affected office.

However, a constitutional corporation with a good faith interest in buying, leasing or subleasing a disclosure affected office can request that the owner or lessor provide a valid BEEC. The request must be in writing (which can include email), and may be made at any time while the owner, lessor or sublessor is offering or inviting offers for the sale, lease or sublease of a disclosure affected office. This is provided for in section 12 of the Act.

Anyone who is offering a disclosure affected office for sale, lease or sublease, and who receives such a request from a constitutional corporation, has a legal obligation to register a valid, current BEEC and to provide a copy to the constitutional corporation, unless an exception or exemption applies (see Exemptions). This obligation applies to such entities as individuals, trusts, partnerships and governments.

Penalties: Civil penalties of up to $110,000 for a body corporate and $38,500 for an individual may be imposed by a Court for failing to provide a BEEC in accordance with a section 12 obligation. Alternatively, the Secretary of the Department of Climate Change and Energy Efficiency may issue an infringement notice with a penalty of up to $11,000 for a body corporate or $3,850 for an individual.

Gathering information
It is common for energy use within a building to be controlled by both owners and tenants. Certain types of leasing arrangements may prevent the flow of energy use information between these parties. Section 18 of the Act addresses these information barriers by providing CBD Accredited Assessors with powers to obtain information and access to buildings and areas in certain situations:

• if a CBD Accredited Assessor is engaged by the owner or lessor of a disclosure affected office to produce a BEEC in order to satisfy a disclosure obligation, and
• the Assessor reasonably believes that an owner, lessee or sublessee of the building has information that is necessary for the purposes of the assessment
• then the Assessor can require that person, by notice in writing, to provide the information
• the assessor may also, by notice in writing, request access to a disclosure affected office at reasonable time (e.g. during business hours) for the purposes of conducting the assessment.

Under certain circumstances, owners, lessees or sublessees can apply for an exemption from these requirements (see Exemptions).

In some cases, relevant energy use information will be in the possession of former owners and/or tenants. While the Act does not give CBD accredited assessors the power to compel these parties to provide the information, all reasonable efforts should be made to obtain it. At a minimum, this would include evidence of a written request for the information.

Penalties: Civil penalties may be imposed for failing to provide access or information as required. Penalties imposed by a Court may be up to $55,000 for the first day and $5,500 for each subsequent day for a body corporate, and $22,000 for the first day and $2,200 for each subsequent day for an individual. Alternatively, the Secretary of the Department of Climate Change and Energy Efficiency may issue infringement notices in relation to contraventions. An infringement notice may require payment of a penalty of up to $5,500 for the first day and $550 for each subsequent day for a body corporate, and $2,200 for the first day and $220 for each subsequent day for an individual.