Changes to Energy Use Disclosure Law for Commercial Buildings and Multifamily Residences Signed in California | Practical Law

Changes to Energy Use Disclosure Law for Commercial Buildings and Multifamily Residences Signed in California | Practical Law

California Governor Jerry Brown signed a new energy use disclosure law on October 8, 2015 that will amend the existing energy use disclosure law affecting commercial buildings and certain multifamily residences. The existing law, referred to as AB 1103, or the California Nonresidential Building Energy Use Disclosure Program, remains in effect through December 31, 2015.

Changes to Energy Use Disclosure Law for Commercial Buildings and Multifamily Residences Signed in California

by Practical Law Real Estate
Published on 04 Nov 2015 • California
California Governor Jerry Brown signed a new energy use disclosure law on October 8, 2015 that will amend the existing energy use disclosure law affecting commercial buildings and certain multifamily residences. The existing law, referred to as AB 1103, or the California Nonresidential Building Energy Use Disclosure Program, remains in effect through December 31, 2015.
On October 8, 2015, Governor Jerry Brown signed Assembly Bill 802 into law amending the existing energy use disclosure program in California (2015 Cal. Legis. Serv. Ch. 590 (A.B. 802)). The new law replaces AB 1103 (Section 25402.10 of the California Public Resources Code), which will remain in effect until December 31, 2015.
The current California Nonresidential Building Energy Use Disclosure Program requires owners and operators of commercial buildings obtain energy usage data from utility companies and provide this information to lessees, buyers and lenders in the context of a lease, sale, finance or refinance (Cal. Pub. Res. Code § 25402.10).
Under the recently enacted AB 802, utility companies must:
  • Maintain energy usage data for the most recent 12 calendar months for all buildings served.
  • Provide this data to building owners and operators within four weeks after a request is made.
Under AB 802, the burden of disclosure shifts from building owners and operators to utility companies. Utility companies will now be responsible for maintaining utility records and delivering public disclosures of energy usage data for buildings served by that utility,
In another departure from the existing rules, AB 802 also applies to certain multifamily residential buildings in addition to commercial buildings.
Beginning January 1, 2016, there will be no energy disclosure requirements imposed on building owners and operators in California. The California Energy Commission will spend 2016 developing the new reporting structure under AB 802, which is expected to take effect January 1, 2017. The CEC aims to create a program that allows owners and operators of commercial and multifamily buildings over 50,000 square feet to better understand their energy consumption.
Counsel practicing in California should advise their clients that the current energy use disclosures are still required for a sale, lease or finance transaction involving certain non-residential buildings prior to December 31, 2015. While there will be no disclosure requirements for building owners and operators in 2016, counsel should keep in mind that new energy disclosure rules are on the horizon for 2017.
For more information on the current energy disclosure law, see Legal Update, California Delays AB 1103 Compliance for Smaller Nonresidential Buildings.