From 1st July 2017, this expansion of the CBD program will require most sellers and lessors of office space of 1000 square metres or more to obtain a Building Energy Efficiency Certificate (BEEC) before the building goes on the market for sale, lease or sublease.

BEECs include a Part 1 – the building’s National Australian Built Environment Rating System (NABERS) Energy for offices star rating which is valid for 1 year, and a Part 2 – Tenancy Lighting Assessment (TLA) of the relevant area of the building which is now valid for 5 years (since September 2016).

What hasn’t changed?

As the owner or lessor of a disclosure affected building:

• You must provide a current, valid BEEC to potential buyers or lessees free of charge, as early as possible in the transaction enquiry process and when requested;
• BEECs must be publicly accessible on the Building Energy Efficiency Register; and
• The building’s NABERS Energy star rating, Part 1 from the BEEC, must be included in any advertising material for the sale, lease or sublease of the building or office space.

The defined Exceptions to the CBD program, and Exemptions from disclosure obligations, have not changed.

What will change?

By lowering the mandatory threshold to 1000 square metres, the upcoming changes will effectively increase the number of disclosure affected commercial office buildings that will require a BEEC when for sale or lease.

Simultaneously leasing more than one floor space in a commercial office building (which may require adding together the net lettable area for those spaces), is more likely to now be over the 1000 square metre threshold.

What do I do now?

While maintaining a constantly valid BEEC is not required by the CBD program, most savvy building owners / managers have already realised conducting an annual NABERS rating for their building achieves benefits beyond simply complying with the CBD mandatory requirements.

Maintaining a valid NABERS rating each year makes the process of applying for a BEEC significantly easier and quicker should a mandatory disclosure trigger event (i.e. sale, lease or sublease) occur.

The documentation required to be gathered by the building owner / manager, and provided to the NABERS Accredited Assessor, is over at least a 12-month operational period. Therefore, if you think you may need a BEEC from July 2017, then you will need to have the correct building documentation and records dating back to at least July 2016.

The CBD website has a number of self-help fact sheets and guides available (www.cbd.gov.au).

However, if you think you may have a disclosure affected building this year and have never previously had an accredited NABERS rating, then we recommend discussing your particular situation with a CBD Accredited Assessor who can explain the relevant CBD and NABERS requirements.

Napier & Blakeley has CBD Accredited Assessors in each of our offices, if you have any enquiries or need to engage a NABERS or CBD Accredited Assessor as below:

SYDNEY
Rod Clarke
o.  02 8113 7104
m. 0417 736 402
e.  rclarke@napierblakeley.com

MELBOURNE
Paul Bullen
o.  03 9915 6300
m. 0418 407 863
e.  pbullen@napierblakeley.com

BRISBANE
Clayton Stewart
o.  07 3815 0498
m. 0419 528 707
e.  cstewart@napierblakeley.com

BRISBANE
John Proctor
o.  07 3815 0428
m. 0415 422 313
e.  jproctor@napierblakeley.com

For 32 years and counting Napier & Blakeley have been providing the following services to the property industry:

• Property Acquisition & Disposal Technical Due Diligence
• Property Development Due Diligence
• Quantity Surveying
• Capital Expenditure Forecasting
• Make Good Reporting
• Energy Management
• Development Monitoring
• Property Tax Depreciation

Please contact any of the people below for more information or assistance:

SYDNEY
Alastair Walker
Managing Director
o.  02 9299 1899
m. 0419 503 289
e.  awalker@napierblakeley.com

MELBOURNE
Craig Smith
Director
o.  03 9915 6300
m. 0407 371 664
e.  csmith@napierblakeley.com

BRISBANE
Paul Mazoletti
National Director
o.  07 3221 8255
m. 0408 749 202
e.  pmazoletti@napierblakeley.com

PERTH
Graham Rigby
Senior Associate
o.  08 9489 4895
m. 0419 847 998
e.  grigby@napierblakeley.com

Importantly, this impending expansion of the regulatory requirements of the CBD program to include additional commercial office buildings, also comes with the announcement of reducing the regulatory requirements for the Tenancy Lighting Assessment (TLA) component by increasing the TLA validity period from 1 to 5 years from 1st September 2016.

What does that mean?

If you own / manage a building, or an area of a building, that is:

• Now greater than 1,000 square metres;

• For administrative, clerical, professional or other information-based activities, including any support facilities of those activities (i.e. office space); and

• For sale, lease or sublease.

… then it could be disclosure affected from 1^st July 2017. If you have a disclosure affected building, it will need a valid Building Energy Efficiency Certificate (BEEC) before it is put to the market for sale or lease.

A BEEC comprises two parts that need assessment by an Accredited Assessor, these are:

1. A National Australian Built Environment Rating System (NABERS) Energy star rating for the building; and
2. An assessment of the energy efficiency of tenancy lighting in the area of the building that is being sold or leased, called a Tenancy Lighting Assessment (TLA).

A BEEC is valid for up to 1 year, but is no longer valid when either of the two parts listed above reach their respective expiry dates (currently both assessment parts have 1 year validity periods).

By lowering the mandatory threshold, the upcoming changes to the CBD program effectively increases the number of commercial office buildings that are expected to require BEEC’s, and hence increase the requirement for the Part 1 – NABERS Energy ratings to be conducted on those disclosure affected buildings.

The increase of the validity period from 1 year to 5 years of the Part 2 – Tenancy Lighting Assessment (TLA) from 1st September 2016, reduces the potential burden of having to re-assess the TLA component for the tenancy lease spaces each time a BEEC requires renewal in the future.

While maintaining a constantly valid BEEC is not required by the CBD program, most savvy building owners / managers have already realised conducting an annual NABERS rating for their building achieves benefits beyond simply complying with the CBD mandatory requirements.

Maintaining a valid NABERS rating makes the process of applying for a BEEC significantly easier and quicker should a mandatory disclosure trigger event (i.e. sale, lease or sublease) occur.

What do I do now?

The documentation required to be gathered by the building owner / manager to conduct a NABERS performance rating, is over at least a 12 month operational period. Therefore, if you think you may need a BEEC from 1st July 2017, then you need to start assembling the correct documentation and records from 1st July 2016.

Some office buildings or areas of buildings are not disclosure affected if they are:

• Mixed use buildings with less than 75% office space by net lettable area;

• New buildings, where there is a certificate of occupancy less than 2 years old;

• Strata-titled buildings;

• Transferred through the sale of shares or units of interest;

• Leased in a short term lease, (i.e. for a period of less than 12 months); or

• Leased by exercising an option to renew or extend an existing lease.

However, if you think you may have a disclosure affected building from 2017, and have never previously had an accredited assessment for a NABERS rating or TLA, then we recommend discussing your situation with a CBD Accredited Assessor. The CBD website also has a number of fact sheets and guides available (www.cbd.gov.au).

Napier & Blakeley has CBD Accredited Assessors within each of its Sydney, Melbourne and Brisbane offices, if you have any enquiries or need to engage a NABERS or CBD Accredited Assessor.

For any further information on this please contact:

SYDNEY
Rod Clarke
o.  02 8113 7104
m. 0417 736 402
e.  rclarke@napierblakeley.com

MELBOURNE
Paul Bullen
o.  03 9915 6300
m. 0418 407 863
e.  pbullen@napierblakeley.com

BRISBANE
Clayton Stewart
o.  07 3815 0498
m. 0419 528 707
e.  cstewart@napierblakeley.com

BRISBANE
John Proctor
o.  07 3815 0428
m. 0415 422 313
e.  jproctor@napierblakeley.com

For 30 years and counting Napier & Blakeley have been providing the following services to the property industry:

• Acquisition & Disposal Technical Development Due Diligence

• Quantity Surveying

• Capital Expenditure Forecasting

• Make Good Reporting, Energy Management

• Development Monitoring

• Property Tax Depreciation

Please contact any of the people below for more information or assistance:

SYDNEY
Alastair Walker
o.  02 9299 1899
m. 0419 503 289
e.  awalker@napierblakeley.com

MELBOURNE
Craig Smith
o.  03 9915 6300
m. 0407 371 664
e.  csmith@napierblakeley.com

BRISBANE
Paul Mazoletti
o.  07 3221 8255
m. 0408 749 202
e.  pmazoletti@napierblakeley.com

PERTH
Graham Rigby
o.  08 9489 4895
m. 0419 847 998
e.  grigby@napierblakeley.com

On the 4th February 2016, The Minister for Resources, Energy and Northern Australia, The Hon. Josh Frydenberg MP, released the report on the Commercial Buildings Disclosure (CBD) Program Review (http://cbd.gov.au/overview-of-the-program/cbd-review).
 
The independent review, produced by ACIL Allen Consulting, found the CBD Program to be a successful and effective way of delivering significant benefits at a minimal cost to industry and government. The review concluded the CBD Program has delivered $44 million in benefits over the last four years by assisting to improve the energy efficiency of Australia’s large office buildings. The Hon. Josh Frydenberg MP agreed that the CBD Program will continue and consideration would be given to the recommended regulatory changes that are projected to deliver an additional $13 million in energy efficiency benefits by 2028 and streamline industry regulatory obligations.

The proposed changes to the CBD Program include:

• Lowering the threshold for mandatory disclosure of energy efficiency information on buildings from 1,000 square metres and up to capture smaller office buildings.
• Extending the validity period for the tenancy lighting assessment from one to five years.

Any changes to the CBD Program will be preceded by a one year transition period following Ministerial approval. It is anticipated that the proposed changes won’t be introduced until July 2017.

A Regulatory Impact Statement on the proposed changes has been prepared and is available on the CBD website (http://cbd.gov.au/overview-of-the-program/cbd-review).

A consultation survey on the proposed changes to the CBD Program is open to the public until 5 pm AEST on the 12 March 2016. The public consultation can be accessed here:
https://consult.industry.gov.au/energy-division/cbd-public-consultation

They also welcome feedback from stakeholders through the CBD Hotline: 1800 020 131 and through the CBD email address: info@cbd.gov.au

Napier & Blakeley are pleased to have the following CBD Assessors and they invite you to contact them if you have any queries regarding this or anything else related:

SYDNEY Rod Clarke o.  02 8113 7104 m. 0417 736 402 e.  rclarke@napierblakeley.com	MELBOURNE Paul Bullen o.  03 9915 6300    m. 0418 407 863 e.  pbullen@napierblakeley.com
BRISBANE Clayton Stewart o.  07 3815 0498 m. 0419 528 707 e. cstewart@napierblakeley.com	BRISBANE John Proctor o.  07 3815 0428 m. 0415 422 313 e. jproctor@napierblakeley.com