In California, brokers are at the heart of every non-residential sale or lease. Can the AIR organization get them on board with benchmarking?

Source: www.greenbiz.com

>”Commercial buildings are some of California’s largest energy- and water-guzzlers. With 58 percent of the state locked in the highest category of drought, many commercial property owners are seeing increased utility bills, and with a new building energy benchmarking and disclosure law on the books, building owners seek energy efficiency solutions as a common-sense way to ease some of the pressure. One key trade association in California, the AIR Commercial Real Estate Association, is taking the lead by educating its members on the benefits of energy efficiency.

AIR, founded in 1960, is a regional commercial real estate brokers association with more than 1,700 members across southern California, and is one of the nation’s largest organizations of its kind. It’s recognized across the U.S. for its ever-expanding library of sample lease forms, which members use to stay updated on industry and lease language trends — several of which now include sustainability. When California’s energy benchmarking law, AB 1103, went into effect in January, AIR responded by creating sample energy disclosure lease and sale addenda (PDF) and began educating its members on these new tools.

Brokers are in the thick of it

The law states that any time a non-residential building owner finances, sells or leases a whole building, the property owner is required to use Energy Star portfolio manager to benchmark the building and provide the Energy Star rating and supporting consumption information to the lender, buyer or tenant in the transaction. As brokers are central to every aspect of a commercial transaction, their participation is essential for the law to have its intended effect. AIR’s lease and sale addenda effectively address these energy disclosure requirements in one document, providing real estate professionals, building owners, tenants and attorneys with a framework template for compliance with the regulation.

Brokers hold the key to increasing stakeholder awareness, potentially boosting compliance rates, benchmarking data quality and ultimately better building performance and energy management — and educating the community about new regulations and tools is essential to unlocking this potential.”<

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>”[…]Compliance with AB 1103 is not suspended, and will continue to be required, for the sale, lease, or financing of buildings over 10,000 square feet that are otherwise subject to the regulations based upon occupancy type.

Significant barriers to compliance with AB 1103

An Emergency Rulemaking Action requires a description of specific facts justifying the immediate action. In justifying the two-year delay, the CEC explained that several stakeholders had expressed concerns about significant barriers to compliance with AB 1103. The CEC noted the following factors in justifying the two-year delay:

• Some utilities have required tenant consents before releasing utility usage data despite letters sent from the CEC to utilities in July 2013 prohibiting such requirement. This requirement to obtain tenant consents significantly increases compliance costs.
• Smaller utilities have expressed concerns with their ability to comply given limited staff and resources.
• The Portfolio Manager platform and software has experienced significant technical problems.
• The expansion in scope to smaller buildings would increase the number of compliance requests received by utilities, impeding their ability to address barriers to compliance.
• Smaller building owners may lack the expertise, resources, or capacity necessary to overcome current barriers to compliance without incurring undue expense.
• Based on initial disclosure data following the January 1, 2014 implementation, it became apparent that “the required disclosures were not being made for the majority of transactions for which they were required.”
• The development of best practices approaches is lowering compliance costs and paving the way to greater compliance. The additional two years will facilitate lower costs and higher compliance rates before further expanding the program to smaller buildings.”<

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