The June 2016 decision by the Federal Government to expand the Commercial Building Disclosure (CBD) scheme and the Equipment Energy Efficiency (E3) will lower the requirement for most sellers and lessors of commercial office space from 2,000 to 1,000 square metres. Few would argue against environmentally AND economically sustainable best practice, nevertheless many 2nd & 3rd grade commercial building owners will feel the pain of this expanded compliance. From 1 July 2017 they will be required to obtain a BEEC (Building Energy Efficiency Certificate) before their building goes on the market for sale, lease or sublease, and to include a current NABERS (National Australian Built Environment Rating System) rating on all advertising. NABERS measures the energy efficiency, water usage, waste management and indoor environment quality of a building or tenancy and its impact on the environment.

Changes to lower the disclosure threshold are supplemented by a decision to extend the validity for Tenancy Lighting Assessments (TLAs) from one to five years for all new TLAs from 1 September 2016.
According to a report May 2016 by Australian Sustainable Built Environment Council, commercial buildings can potentially deliver 28 per cent of Australia’s 2030 emissions reduction target and more than 50 per cent of the national energy productivity target. More than 60 per cent of commercial buildings in Australia are reportedly B, C and D-grade buildings with low energy efficiency ratings.
The proposals has been welcomed by the Property Council of Australia. “This scheme has led to improvements in energy efficiency as well as a reduction in emissions across the commercial office market. It has also strengthened the market for high-performing buildings.” “At first glance, the CBD scheme seems to increase the compliance burden, but the industry’s experience is that it creates significant benefits that far outweigh the costs”.

Reduced compliance with the extension of the TLA to be every five years instead of every year, but bringing into the compliance regime any office space for sale or lease (or sub-lease) which is 1,000sqm in size. This will bring in a new trench of owners, including those in regional areas.

Civil penalties of up to $170,000 for the first day of non-compliance and up to $17,000 for each subsequent day of non-compliance may be imposed by the Department of Industry, Innovation and Science.
The scheme currently covers around 5000 buildings with 26 million square metres of space. While acknowledging that there is poor quality data available the Department anticipates that over 1,000 new buildings across Australia will be impacted, adding 1.5 million square metres to the reach of the program. Others have expressed concern that the real impact could be many times that guestimate.

These changes, while announced, are yet to be translated into law – so that will need to wait until after the outcome of the Federal election.

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