Building Energy Efficiency Disclosure Determination 2016

The Determination defines or adopts a set of technical concepts central to its operation, all grounded in the source text.

NABERS Energy rating rules is the document titled “NABERS Energy and Water for offices: Rules for collecting and using data”, as in force from time to time, published by the NSW Environment Agency. These rules are the foundational assessment method, subject to modifications in section 6. The rules are dynamic: any update by the NSW Agency automatically becomes the standard for this Determination without further legislative action.

Base building rating and whole building rating are both given meaning by the NABERS Energy rating rules. The Determination creates a hierarchy: the default is a base building rating, which measures the energy performance of the base building services (common areas, lifts, air conditioning, etc.) separately from tenancy energy use. A whole building rating, which measures combined performance, is only permitted when metering is inadequate to distinguish tenancy from base building energy use. This is defined as meters “not sufficient to distinguish energy measured for tenancy energy use from base building energy use, resulting in a non-representative figure of the base building energy use.” This is a factual determination by the accredited assessor, not a regulatory pre-approval.

Tenancy Lighting Assessment rules are the “CBD Tenancy Lighting Assessment for Offices Rules” as in force from time to time, together with any rulings made under them, published by the Department. This is the method for working out lighting energy efficiency under section 21(1)(b) and (c) of the Act.

GreenPower program is defined as the National GreenPower Accreditation Program, a joint initiative of NSW, Victoria, Queensland, Western Australia, South Australia and the ACT. The Determination explicitly excludes the effect of GreenPower purchases from the rating, so a building cannot inflate its rating by buying accredited renewable energy certificates. This applies both when calculating a new rating (subsection (2)) and when relying on a current NABERS rating (subsection (7)).

Major refurbishment has the meaning given in the Building Energy Efficiency Disclosure Regulations 2010 (not defined in this Determination). The Determination prohibits an accredited assessor from assigning a rating to a building undergoing a major refurbishment where the assessor “reasonably forms the opinion” that the works are likely to affect the energy efficiency rating. Similarly, when relying on a current NABERS rating, the assessor cannot do so if they reasonably believe the building has undergone or is undergoing works likely to affect the rating.

Hours of occupancy and rated areas are both given meaning by the NABERS Energy rating rules. Net lettable area is defined by cross-reference to the Property Council of Australia’s “Method of Measurement for Lettable Area” dated March 1997, as in force at the commencement of the Regulations (not the Determination). This is a static reference: that 1997 version is frozen, unlike the NABERS rules.

Utility meter is defined as a meter installed to measure electricity, gas or other energy source and operated by the supplier for billing. This definition underpins the concept of inadequate metering for distinguishing tenancy from base building use.

Rated areas and rating period are both given meaning by the NABERS Energy rating rules.

Start day is defined by reference to section 13(1) of the Act. Department means the Commonwealth department whose minister administers the Act. NSW Environment Agency means the NSW agency that manages NABERS.

The Determination directly affects several categories of persons and entities, imposing obligations and creating costs.

Building owners are the most directly affected. They must obtain a building energy efficiency certificate before selling, leasing or subleasing a covered commercial office building (the Act requires disclosure). The Determination controls the content of that certificate and the method of calculating the rating. Owners bear the cost of engaging an accredited assessor, which includes fees for data collection, NABERS rating certification, and lighting assessment. If metering is inadequate, the owner may face additional costs to install sub-meters or accept a whole building rating, which may be less advantageous for leasing. Owners also bear the risk that a major refurbishment delays or prevents a rating, potentially stalling a transaction.

Accredited assessors are the key gatekeepers. They must apply the modified NABERS rules, exercise professional judgment about whether works are likely to affect rating (without clear guidance on what “likely” means), and choose between base building and whole building ratings based on metering adequacy. They must also determine whether a current NABERS rating can be relied upon, and whether to use a current lighting assessment. Assessors face liability if they certify a rating that does not comply with the Determination, and they must keep records. The reliance provisions reduce assessment costs where a current rating exists, but impose conditions that may be overlooked.

Prospective buyers and lessees are the intended beneficiaries of the disclosure regime, but they also bear indirect costs if compliance burdens raise transaction costs or if landlords pass on assessment costs through higher rents. The rating itself is a single metric that may obscure building-specific factors such as actual tenancy energy use or the effect of GreenPower purchases (which are excluded). The determination that the rating “must” exclude GreenPower means that a building purchasing accredited renewable energy cannot reflect that in its mandatory disclosure rating, potentially making such investment less attractive.

Advertisers (typically owners or their agents) must comply with strict formatting rules. Every separate advertisement must display the rating in a specific format, and the rating must be at least as large as the majority of the rest of the text. This imposes design constraints, particularly for small advertisements, social media, or digital displays. Failure to comply may attract penalties under the Act.

The Department (Commonwealth) and the NSW Environment Agency are indirectly affected as administrators. The Department publishes the Tenancy Lighting Assessment rules and certifies lighting assessments. The NSW Environment Agency manages the NABERS rating rules and certifies ratings through the National Administrator. These agencies benefit from the Determination’s incorporation by reference, as changes to their rules automatically apply.

Finally, energy suppliers and meter operators may be affected if buildings upgrade metering to achieve a base building rating, potentially increasing demand for submetering services. The GreenPower program is indirectly affected because its renewable energy purchases are excluded from the rating, reducing the incentive for building owners to buy GreenPower for disclosure purposes.

The Determination imposes duties primarily on accredited assessors and on persons who advertise buildings (typically owners or agents). It also establishes rights for building owners to obtain a certificate with prescribed content.

Duties of accredited assessors under section 6: When working out an energy efficiency rating, the assessor must apply the NABERS Energy rating rules as modified. The modifications impose specific duties: (a) exclude GreenPower purchases; (b) not assign a rating if the assessor reasonably forms the opinion that the building is undergoing works likely to affect the rating (major refurbishment context); (c) work out a base building rating unless metering is inadequate, in which case work out a whole building rating. The assessor also has a duty under subsection (3) to form a reasonable opinion about the likely effect of works - this is a factual judgment with no bright-line test.

When relying on a current NABERS rating under subsections (6)-(10), the assessor has a duty to verify: that the rating excludes GreenPower; that it is a base building rating or, if none exists, a whole building rating (and only if a base building rating cannot be worked out); and that the assessor does not reasonably believe that the building is undergoing or has undergone works likely to affect the rating since certification. This creates a duty to inspect or enquire about any works.

Under section 7, for lighting assessments, the assessor may rely on a current lighting assessment certified by the Department. The duty is to adopt the Tenancy Lighting Assessment rules or use a certified current assessment. There is no modification of the lighting rules (unlike the NABERS rules).

Duties relating to advertisements under section 5: Any person who publishes an advertisement for the sale or lease of a building subject to the Act must express the energy efficiency rating as a whole number or half number (0 lowest) followed by “-star NABERS Energy rating”. The rating must be displayed prominently so that it is clearly visible, not obscured, and the number and text must be at least as large as the majority of the text in the advertisement. This is a strict formatting duty with no exceptions. The examples given are “4.5-star NABERS Energy rating” and “3-star NABERS Energy rating”. There is no provision for alternative formats, abbreviations, or placement.

Certificate content duties under section 8: The certificate must include eighteen specific items listed in paragraphs (a) to (p). The duty is on the person who creates the certificate (likely the assessor or owner) to ensure all items are present. Notably, the certificate must state greenhouse gas emissions “not including the effect of any electricity purchased for the building or area under the GreenPower program” (paragraph (l)(ii)), and must state the NABERS Energy rating excluding GreenPower (paragraph (m)). The certificate must also include the net lettable area (of building or area), hours of occupancy, energy consumption in megajoules, and emissions per square metre.

Rights of building owners: The Determination does not create rights per se, but the Act gives building owners the right to obtain a certificate that meets the prescribed content. The Determination standardises that content, giving owners certainty about what must be included. There is no right to choose a different rating methodology; the methods are mandatory.

No duties on buyers or lessees - they are passive recipients of the disclosure information.

The Determination itself does not prescribe penalties. Penalties and enforcement mechanisms arise under the Building Energy Efficiency Disclosure Act 2010, which is the parent Act. The Determination defines the technical standards, so non-compliance with those standards will constitute a breach of the Act.

Under section 15 of the Act, a person must not advertise the sale or lease of a building unless the advertisement includes the energy efficiency rating in accordance with the determination. If the advertisement does not comply with section 5 of this Determination (format, prominence, text size), that is a breach of section 15 and attracts civil penalties. The Act provides for maximum penalties (not specified in the Determination, but typically several hundred penalty units for an individual and more for a body corporate). The Department can issue infringement notices for minor breaches.

Similarly, if a building owner or agent fails to have a valid certificate when required (e.g., before offering for sale or lease), the Act imposes penalties. If the certificate does not contain all information required by section 8 of this Determination, it may not be a valid certificate, exposing the owner to liability.

Enforcement is by the Department or its delegates. The Act confers powers to compel production of documents, enter premises, and issue stop notices. The determination does not expand or limit those powers.

There is also potential for indirect enforcement through private litigation. A buyer or lessee who suffers loss because of a misleading or non-compliant advertisement may have rights under the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010). A rating that is incorrectly calculated (e.g., by including GreenPower or failing to exclude works) could mislead. The Determination’s mandatory method may give rise to a duty of care by the assessor to the building owner and possibly to third parties, but that is a matter of common law, not this instrument.

The determination’s reliance on assessor judgment (e.g., “reasonably forms the opinion that the building is currently undergoing works which are likely to effect the energy efficiency rating”) creates enforcement difficulty. It is subjective and factual, so proving a breach requires showing that no reasonable assessor could have held that opinion. This may limit the effectiveness of enforcement.

Compliance burden: The cost of engaging a NABERS accredited assessor, conducting the rating, and preparing the certificate is borne by the building owner. The determination’s modifications (excluding GreenPower, mandatory base building rating where possible) may increase assessment costs if metering needs upgrading. The reliance provisions reduce costs where a current rating exists, but the conditions (no subsequent works, exclude GreenPower) may still require additional verification.

The Determination operates as subordinate legislation under the Building Energy Efficiency Disclosure Act 2010. It must be read in conjunction with that Act, which establishes the overarching disclosure obligations for commercial office buildings. The Act imposes the duty to have a certificate and to disclose the rating; the Determination specifies the methods and details.

It also interacts with the Building Energy Efficiency Disclosure Regulations 2010. The Determination defines “major refurbishment” by reference to the Regulations. Any amendment to the Regulations will automatically change the definition for purposes of the Determination. The Regulations also contain other definitions and exemptions not covered by the Determination.

Incorporation by reference is a key feature. The Determination relies on external documents that are “as in force from time to time” for the NABERS Energy rating rules (section 4 definition and section 6(1)(a)), the Tenancy Lighting Assessment rules (section 7), and the NABERS Energy and Water for offices rules. This means any amendments to those rules by the NSW Environment Agency or the Department automatically apply to compliance under this Determination without any further legislative instrument. This creates a moving target for building owners and assessors, who must monitor changes to those external documents. The Property Council’s Method of Measurement for Lettable Area (March 1997) is static, as it is “as in force at the commencement of the Regulations” - it does not update.

The GreenPower program definition references a joint government initiative. The Determination does not give force of law to the program’s rules, but defines it as that program. If the program is modified or abolished, the reference would need updating.

The Act itself interacts with state and territory laws on building standards and environmental performance. The NABERS scheme is a national voluntary scheme administered by NSW but used throughout Australia. The Commonwealth Act mandates its use for disclosure; the Determination makes it mandatory for rating calculation. There is no conflict or override.

The Determination also interacts with the Legislation Act 2003 (Cth) regarding registration, tabling, and disallowance. As a legislative instrument, it is registered on the Federal Register of Legislation and subject to parliamentary scrutiny.

For advertisements, the Determination’s requirements supplement the Australian Consumer Law’s prohibition on misleading or deceptive conduct. A rating displayed in compliance with section 5 may still be misleading if it does not accurately reflect the building’s performance due to the exclusions (e.g., GreenPower, energy use not captured by inadequate metering). But the Determination itself mandates the exclusions, so the rating is compliant even if a rational consumer might be misled.

The Determination repealed and replaced the Building Energy Efficiency Disclosure Determination 2015. That earlier determination was made on 22 May 2015 and commenced on 1 July 2015. The 2016 Determination commenced on 1 September 2016, superseding the 2015 version. No subsequent amendments to this 2016 Determination are recorded in the source text. However, because the Determination incorporates external documents “as in force from time to time”, its substantive effect changes whenever the NABERS Energy rating rules or Tenancy Lighting Assessment rules are updated. Those updates are not amendments to the Determination itself, so no formal amending instruments appear on the Federal Register of Legislation for this Determination. Users must therefore consult the latest versions of those external rules to ascertain the current technical requirements.

The repeal of the 2015 Determination means that any certificates issued under that instrument may no longer comply if they rely on methods that have changed. Transitional provisions are not included in the 2016 Determination; any transitional arrangements would need to be found in the Act or Regulations.

The Determination was made by the Acting Secretary of the Department of Environment and Energy (now the Department of Climate Change, Energy, the Environment and Water). The date of making is 3 August 2016.

The source text does not mention any litigation history relating to this Determination or its predecessors. No cases are referenced in the instrument. Given that the Determination is a technical instrument specifying assessment methods and advertisement formatting, litigation would likely arise under the parent Act rather than the Determination itself. Potential areas for dispute include: whether an assessor’s opinion about works affecting rating was reasonably formed; whether metering was “inadequate” (a factual assessment); whether an advertisement complied with the prominence and text size requirements; and whether a certificate contained all mandatory information. As of the date of this Determination, no reported decisions are associated with it in the source. However, the Determination has been in force for several years and could be cited in proceedings concerning disclosure obligations under the Act. Practitioners should check for later judicial consideration of the Act’s provisions and the interpretation of “reasonable opinion” and “inadequate metering”.

Several provisions create traps for the unwary. These are the points most likely to generate non-compliance or unexpected costs.

1. Dynamic incorporation of NABERS rules. The NABERS Energy rating rules are “as in force from time to time”. The rules can change without notice to building owners or assessors. A current rating methodology might become outdated or a new data collection protocol may be introduced. Assessors must check the latest version every time they do an assessment. Failure to do so could invalidate the rating.

2. Excluding GreenPower is mandatory. The rating must exclude any GreenPower purchases. This applies both when calculating a new rating (section 6(2)) and when relying on a current NABERS rating (section 6(7)). A building that buys GreenPower cannot reflect that in its mandatory disclosure rating. This may reduce the incentive to purchase renewable electricity if the building values a higher star rating. Also, a current NABERS rating that originally included GreenPower cannot be relied upon unless the assessor recalculates to exclude it.

3. Base building rating is default; whole building rating is a fallback. The assessor must work out a base building rating unless metering is inadequate. “Inadequate metering” is defined as meters not sufficient to distinguish tenancy energy use from base building energy use, resulting in a non-representative figure. This is a judgment call. If the assessor wrongly opts for a whole building rating, the certificate may be non-compliant. Conversely, attempting a base building rating with inadequate meters will produce a non-representative rating, which could be misleading and expose the assessor to liability.

4. Major refurbishment - “likely to effect” is undefined. Section 6(3) says the assessor must not assign a rating where the building is undergoing works likely to effect (an apparent typo for “affect”) the energy efficiency rating. The term “likely” is not defined. It could mean more probable than not, or merely a real chance. The assessor’s opinion must be reasonable. This creates uncertainty: works that are expected to improve efficiency could still be “likely to affect” the rating, making it impossible to certify until after completion. The same issue arises under subsections (9) and (10) for reliance on a current rating - if any works since certification are “likely to have affected” the rating, reliance is barred.

5. Advertisement text size requirement. The rating text must be “at least as large as the majority of the text contained in the advertisement”. Majority of text means more than 50% of the characters or perhaps the predominant font size? The provision is ambiguous. Does it mean the rating text must be larger than the median font size used for the rest of the text? In practice, this could force the rating to be the most prominent element, which may be impractical for digital ads or small print. The assessor is not responsible for advertisements, but building owners and agents need to be aware.

6. Certificate requires emissions data excluding GreenPower, separately from the rating. Paragraphs (l) and (m) require both greenhouse gas emissions (excluding GreenPower) and the NABERS Energy rating (excluding GreenPower). The rating might already exclude GreenPower, but the emissions data must be explicitly stated as excluding GreenPower. If the assessor inadvertently uses data that includes GreenPower, the certificate is non-compliant.

7. Net lettable area definition is frozen at 1997 Property Council document. The definition refers to the March 1997 Method of Measurement for Lettable Area, as in force at the commencement of the Regulations. This is a static reference. If the Property Council updates its methodology, this Determination does not adopt the update. This could cause mismatch with other contexts where a different version is used.

8. No transitional provisions for the repeal of the 2015 Determination. The 2016 Determination simply repeals the 2015 version. There is no saving provision for certificates prepared under the old rules. However, a certificate’s validity depends on the Act (section 13A), not the Determination. The Determination prescribes methods; if a certificate was validly issued under the 2015 Determination, it likely remains valid until its expiry. But new assessments from 1 September 2016 must use the 2016 Determination. The absence of explicit transitional provisions could cause confusion for assessments straddling the change.

9. Reliance on a current NABERS rating is conditional on no “base building rating exists” for whole building rating. Under subsection (8)(b), an assessor can only rely on a current whole building rating if there is “no current NABERS rating for the building that is a base building rating” and the assessor would not be able to work out a base building rating. This creates a hierarchy: if a base building rating exists, the assessor must use that, not a whole building rating. This could disadvantage buildings where the base building rating is lower than the whole building rating, but the law forces disclosure of the base building rating.

10. The determination does not address tenancy ratings. Even though “tenancy rating” is defined, the Determination only deals with base building and whole building ratings. Tenancy ratings are not permitted for disclosure certificates. This limits the information available to prospective tenants who care about their own energy use.

Compliance with the Determination requires following specific steps in sequence. The building owner or manager should engage an accredited assessor early to avoid delays.

Step 1: Determine whether the building is subject to the Act. The Act applies to commercial office buildings with a net lettable area over a threshold (set by Regulations, currently 1,000 square metres). This Determination only applies if the Act applies.

Step 2: Check for a current NABERS rating. If a certified NABERS rating already exists and is current (not expired), the assessor may rely on it under section 6(6). But the assessor must verify: (a) the rating excludes GreenPower (if not, it cannot be used); (b) the rating is a base building rating, or if not, a whole building rating (and only if no base building rating exists and one cannot be worked out); (c) the building has not undergone any works since the rating was certified that are likely to affect the rating (the assessor must make a reasonable opinion on this); (d) the building is not currently undergoing works likely to affect the rating. If any condition fails, the assessor cannot rely on the current rating and must do a new assessment.

Step 3: If a new assessment is needed, determine metering adequacy. Inspect the utility meters. Can they distinguish tenancy energy use from base building energy use? If not, metering is inadequate and a whole building rating must be worked out. If meters are adequate, work out a base building rating. Upgrading metering may be cost-effective if a base building rating yields a better result for leasing.

Step 4: If the building is undergoing a major refurbishment (as defined in the Regulations), the assessor must form a reasonable opinion about whether the works are likely to affect the energy efficiency rating. If yes, the assessor cannot assign a rating. The building owner should schedule the assessment after completion of refurbishment works, or obtain clearance that the works will not affect rating (which may be difficult).

Step 5: Apply the NABERS Energy rating rules, modified as per the Determination. Collect energy data for the rating period. Exclude any electricity purchased under the GreenPower program (i.e., do not adjust consumption for renewable energy purchases). Apply the NABERS calculation to produce a star rating (whole or half number, 0-6 or higher). The rating must be expressed as a number followed by “-star NABERS Energy rating”.

Step 6: Conduct a lighting assessment using the Tenancy Lighting Assessment rules, or rely on a current certified lighting assessment from the Department. The lighting assessment must be current and certified.

Step 7: Prepare the building energy efficiency certificate. Ensure it contains all eighteen items listed in section 8. Pay special attention to: the start day (the day the certificate is issued under the Act); the expiry date (12 months after start day, per Act); unique identifying number; owner name; building name and address; net lettable area (using the Property Council 1997 method); hours of occupancy (from NABERS rules); whether base or whole building rating; annual energy consumption in megajoules; greenhouse gas emissions in kg CO2 per year (excluding GreenPower); the NABERS Energy rating (excluding GreenPower); emissions per square metre; assessor name and registration number. The certificate must be signed by the accredited assessor.

Step 8: For advertisements, ensure the rating is displayed as required. Every separate advertisement (print, online, signage) must include the rating in the exact format: e.g., “4-star NABERS Energy rating”. The rating must be displayed prominently: clearly visible, not obscured, and the text of the rating (including the number and the words) must be at least as large as the majority of the other text in the advertisement. This may require testing against the median font size. For digital ads, static images may need to be designed accordingly.

Step 9: Keep records. Retain evidence of assessor engagement, meter inspections, data used, certification documents, and copies of advertisements. The Department may request these during compliance checks.

Step 10: Monitor changes to external documents. Since the NABERS rules and Tenancy Lighting Assessment rules are dynamic, the assessor must check for updates before each assessment. If a building has a current rating that was calculated under an older version, the reliance provisions may still allow use, but the conditions (no works, exclude GreenPower, etc.) must still be satisfied.

Ongoing compliance: The certificate expires after 12 months. For new leases or sales, a new certificate is needed. If the building is continuously offered, the owner must ensure the advertisement always displays the current rating. If the building undergoes any works that could affect the rating, the assessor should be consulted to determine whether the rating remains valid. A change in GreenPower purchasing does not affect the rating (since it is excluded) but the certificate must still reflect that exclusion.