Under the Nonresidential Building Energy Use Disclosure Program, also known as AB 1103 (AB 1103), any individual who finances, sells or leases a non-residential building in California of a designated size is required to disclose the building’s ENERGY STAR ratings to the opposing party and to report this information to the California Energy Commission (CEC).
The purpose of the legislation is to promote greater efficiency in commercial buildings through enhanced disclosure requirements. The reporting of energy use in the affected structures takes into account the consumption of all types of energy, including electricity, natural gas and fuel oil. This program, which supplements disclosure obligations already in existence in certain jurisdictions, can be traced back to the passage of AB 1103 in 2007, which determined that an improvement in efficiency was the most effective means to conserving energy and reducing greenhouse gas emissions.
A commercial property owner is obligated to adhere to the following timetable for implementation of the energy regulations:
- On and after July 1, 2013, for a building with total gross square footage area exceeding 50,000 square feet;
- On and after January 1, 2014, for a building with total gross square footage area measuring between 10,000 and 50,000 square feet; and
- On and after July 1, 2016, for a building with total gross square footage area measuring between 5,000 and 10,000 square feet. The deadline for commercial properties measuring between 5000 and 10,000 square feet was originally scheduled for July 1, 2014. The CEC amended the regulations in an emergency action and modified the effective date to July 1, 2016.
In addition to a compliance schedule, the regulations describe the building types that are subject to these requirements and how to fulfill the reporting obligations. Commercial property owners or sellers are required to open or update an account on the EPA’s Energy Star Program Portfolio Manager website and input the relevant energy use information.
Chase Law Group, P.C. has a team of highly trained and knowledgeable real estate attorneys prepared to advise commercial property owners on the details of compliance with all aspects of California’s real estate legislation, including the state’s energy disclosure requirements. Chase Law Group, P.C. can be reached at (310) 545-7700 or www.chaselawmb.com to schedule a consultation.