The Nonresidential Building Energy Use Disclosure Program, also known as AB 1103, is an initiative of the California Energy Commission requiring commercial buildings to disclose energy use benchmarks to the State of California prior to the sale, lease or financing of a commercial building. The benchmark data is a summary of the building’s energy consumption and is applied as a tool for comparative analysis with similar sized buildings. The bill aims at increasing energy efficiency by measuring the use of energy, water, and the emissions of greenhouse gases. The legislation is intended to encourage building owners and operators to improve their buildings’ efficiency ratings.

AB 1103 was implemented for all buildings exceeding 10,000 square feet since January 1, 2014. It will go into effect for all owners of non-residential buildings that measure between 5000 and 10,000 square feet after July 1, 2016. The disclosure obligations apply only if the building owner intends to sell, lease or finance the building. There are limited exceptions for Factory, Industrial and Residential structures, as defined in the California Building Code. Unlike similar environmental regulations in other major cities, compliance is required only prior to undertaking a transaction in connection with the property and has no additional annual deadlines.

In order to meet the requirements of the bill, owners of commercial properties must submit energy consumption and other building related information into the Environmental Protection Agency’s ENERGY STAR Portfolio Manager System. The system then produces an energy rating score for that particular building from 1 to 100, with 100 being the highest energy rating possible. A building that earns a score of 75 or higher can earn an ENERGY STAR certification. The building owner or operator is obligated to submit a compliance report and disclosure documents, which include a summary sheet, a statement of energy performance, data checklist and facility profile. These documents must be presented to all prospective buyers or lessees within a prescribed time prior to executing a relevant contract pertaining to the commercial building.

Shane Coons has the background and experience to assist commercial property owners with their real estate issues, including the state’s energy disclosure requirements. Contact Shane Coons at 949-333-0900 or visit www.ShaneCoonsLaw.com to schedule a consultation.