The Commercial Building Disclosure Scheme “Mandatory Disclosure” will commence on 1 November 2010.
Under the terms of the legislation, owners and lessors of commercial office space with a net lettable area of 2,000m2 or more will be required to disclose energy efficiency information to prospective buyers and tenants when the space is sold, leased or subleased.
Twelve Month Transitional Provisions
- 1 November 2010 to 30 October 2011: a valid National Australian Built Environment Rating System (NABERS) Energy base or whole building rating must be disclosed.
- After the transition period, a complete Building Energy Efficiency Certificate (BEEC) is required to be disclosed.
Requirements for a Building Energy Efficiency Certificate
The requirements to disclose a BEEC will start from 1 November 2011 and will include:
(1) a NABERS Energy base building rating;
(2) tenancy lighting information; and
(3) generic energy efficiency guidance.
For more details about Mandatory Disclosure see the fact sheet and www.cbd.gov.au
Unresolved Issue with NABERS
At the heart of Mandatory Disclosure is the ability for buyers and tenants to compare the energy performance of buildings, on a “like for like basis”, via a NABERS Energy Star rating.
Just like the Star ratings for domestic white goods and electrical appliances, a higher star rating equals greater energy efficiency.
Equipped with this knowledge, the intention is that consumers are more likely to purchase more efficient products. Importantly, this system is applied nationally.
As such, an appliance (for example a television) has the same energy rating in all Australian States.
The same principle applies to the energy efficiency of commercial buildings via Mandatory Disclosure.
However, the NABERS base building rating bands are not set at an equitable rating, with Victorian placed at a distinct disadvantage as the ratings are more stringent on Victorian buildings.
This means that potential buyers and tenants will not be able to compare buildings on a “like for like basis,” which fundamentally contradicts the main purpose of the scheme.
The penalty on Victorian buildings explains why a building in Victoria rates differently to a similar building in other States. For example, a 2 Star building in Melbourne may presently obtain a 3 Star rating in Sydney.
With the Mandatory Disclosure ready to start, the Property Council of Australia is advocating for a revision of the NABERS rating bands to the Victorian Government and the Federal Government to ensure that NABERS can rate buildings on an equitable basis, regardless of which Australian State they are in.
The article below was prepared by the Property Council’s Victorian Asset Committee and demonstrates the current predicament with NABERS, quantifies the financial costs for Victorian buildings and puts forward an easy solution.
Mandatory Disclosure and NABERS
For more information please contact Victorian Policy Advisor, Mendo Kundevski, on 03 9650 8300.
