BB&K In The News

BB&K's Michael Grant Writes About New Regulations Impacting Non-Residential Buildings

By Michael Grant

In a move that will impact thousands of owners and operators of commercial, industrial and retail buildings in the Inland region and the rest of the state, the California Energy Commission is about to require that they start tracking and disclosing the energy consumption of their properties.

The so-called benchmarking of energy data will come into play when a non-residential building is sold, refinanced or leased in whole.

The latest wave in green building practices stems from efforts to reduce greenhouse gas emissions as mandated by the California Global Warming Solutions Act of 2006. The following year, the state Legislature passed AB 1103, and gave the Energy Commission the task of crafting regulations to implement the energy disclosure law. The commission was to have released final regulations later this month, with compliance deadlines expected to begin July 1.

In all, commercial buildings account for 36 percent of electricity consumption in the state, according to a study by Collaborative Economics and touted by the Energy Commission. Given that figure, such buildings are significant contributors to the state’s greenhouse gas emissions.

Along with the typical financial and transaction disclosures during a lease or sale, building owners will soon need to provide the latest 12 months of energy-use information using the U.S. Environmental Protection Agency’s online ENERGY STAR Portfolio Manager. The disclosures only have to be provided to a prospective buyer or tenant of the entire building or to a lender financing the entire building; they are not required for individual leases within a building or the sale of individual commercial condominium units or the financing of those units. The disclosure requirements do not apply to residential buildings.

So what does this mean if you own a non-residential building?

Along with the typical financial and transaction disclosures during a lease or sale, building owners will soon need to provide the latest 12 months of energy-use information using the U.S. Environmental Protection Agency’s online ENERGY STAR Portfolio Manager. The disclosures only have to be provided to a prospective buyer or tenant of the entire building or to a lender financing the entire building; they are not required for individual leases within a building or the sale of individual commercial condominium units or the financing of those units. The disclosure requirements do not apply to residential buildings.

Click here to read the entire article in The Press-Enterprise.