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The move towards greener buildings: How will the Commercial Building Disclosure changes affect you?

13 July 2016

#Property & Real Estate

Robina Kidd

Published by Robina Kidd

The move towards greener buildings: How will the Commercial Building Disclosure changes affect you?

The Australian Government has announced further changes to the Commercial Building Disclosure (CBD) Program in relation to the mandatory disclosure threshold and tenancy lighting requirements.

Building managers and owners are urged to determine if their building falls under the requirements of the CBD Program.

The Change 

The change will start from 1 July 2017 and reduces the mandatory disclosure threshold for commercial office buildings from 2,000 to 1,000 square metres in net lettable area (NLA). This means that buildings once immune to the CBD Program will need to reassess their disclosure policies.

As a result of this change, a building will now be a disclosure affected building if:

  • at least 75% of the space by NLA is used for office space (for administrative, clerical, professional or similar information-based activities including any support for those activities);
  • the building’s net lettable area is greater than 1,000 square metres; and
  • no exemptions apply.


A disclosure affected building must obtain a Building Energy Efficiency Certificate (BEEC) before the building may be offered on the market for sale, lease or sublease. A BEEC involves obtaining both:

  • National Australian Built Environment Rating System (NABERS) rating in the form of energy star ratings; and
  • a Tenancy Lighting Assessment (TLA) being an assessment of the energy efficiency of the tenancy lighting of the building or premises being leased.


Penalties may be imposed of up to $170,000 for the first day of non-compliance and up to $17,000 for each subsequent day of non-compliance.

TLA Changes

In addition to the above, the new changes to the CBD Program also proposes changes to the Tenancy Lighting Assessment. Currently, a lighting assessment is valid for 12 months, but from 1 September 2016, a TLA will be valid for 5 years. This change has been introduced in the hopes of making compliance with the new regime easier.

Actions to be taken now

If a building will be affected from 2017, building managers and owners will need to accumulate data over the next 12 months for a NABERS energy rating to be assessed in order to obtain a BEEC. Unless this data is collected and the NABERS rating is obtained, stakeholders may find it difficult to obtain the BEEC and comply with the new requirements of the regime.

The Move towards Greener Buildings

These changes are part of a greater policy, to improve energy productivity and is in line with other government policies regarding environmental sustainable property development. It is, therefore, expected that there might be further regulatory changes to:

  • the energy efficiency requirements in the construction of buildings; and
  • the energy efficiency disclosure of residential buildings.


This ultimately means that the lessor and lessee relationship will need to adapt to the shift towards greener buildings. Lawyers must also ensure that leases are structured properly so that the rights and obligations of both parties are uniform with the requirements for energy efficiency.

If stakeholders are unsure of their obligations under these new changes, it is recommended that they act quickly to seek legal advice in order to avoid the consequences of non-compliance. 

AuthorsRobina Kidd and Zile Yu


Contact details

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Chris Lovell
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T: +61 3 9321 9832
E: chris.lovell@holdingredlich.com

Lou Farinotti
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Lisa Cody
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Robina Kidd
Partner
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E: robina.kidd@holdingredlich.com

Vanya Lozzi
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E: vanya.lozzi@holdingredlich.com

Cameron Sheather
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E: cameron.sheather@holdingredlich.com

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E: breellen.warry@holdingredlich.com

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Ron Eames 
Partner
T: +61 7 3135 0629
E: ron.eames@holdingredlich.com

Katie Miller
Partner
T: +61 7 3135 0606
E: katie.miller@holdingredlich.com

Peter Nugent 
Partner
T: +61 7 3135 0632
E: peter.nugent@holdingredlich.com

Gerard Timbs
Partner
T: +61 7 3135 0644
E: gerard.timbs@holdingredlich.com


Disclaimer

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

Robina Kidd

Published by Robina Kidd

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