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HG News: Green Property Scene - Oct 2010

Welcome to Green Property Scene!

Welcome to the fifth issue of the Green Property Scene.

There's less than a month to go until mandatory disclosure obligations kick in! If you own or let commercial office space with a net lettable area of 2000 square metres or more, see the article below for details on what you should be doing now.

We wait with bated breath for more details on preelection promises including:

  • an extension to the Green Building Fund. A further $30 million was promised for new applications, as the last round for the Green Building Fund closed on 27 April 2010.
  • a 50 percent bonus tax allowance for works to 'green up' buildings so that a building with a two star NABERS Energy rating (or lower) reaches a four star NABERS Energy rating (or higher).

Stay tuned for more information.

Green developments in Brisbane

Congratulations to Grand Plaza Shopping Centre, Browns Plains, for recently achieving NABERS Energy and NABERS Water ratings. Grand Plaza is the first shopping centre in Australia to receive a rating under the NABERS Retail rating tool. See our article below for more information on NABERS Retail.

The display village at Fitzgibbon Chase was officially launched by Hon. Stirling Hinchliffe, Minister for Infrastructure and Planning, on Saturday 18 September 2010. Fitzgibbon Chase, located in Brisbane's northern suburbs, is part of the Fitzgibbon Urban Development Area administered by the Urban Land Development Authority. The project has received recognition under the UDIA's EnviroDevelopment program for all six areas of sustainability - energy, waste, ecosystems, materials, water and community.

Ban the Banners Review: Have you amended your by-laws or building covenants yet?

The Ban the Banners provisions that were introduced in January this year have been in effect for some time now, but have you considered whether your by-laws or building covenants need to be amended, or whether you need to take any other action?

The Ban the Banners provisions (now in Part 2, Chapter 8A of the Building Act 1975) render provisions or clauses of 'relevant instruments' for 'prescribed buildings' invalid, or have effect to the extent that those provisions or clauses offend the Ban the Banners provisions. Some examples of provisions or clauses that may be invalid include provisions restricting the use of light coloured roofs or the installation of hot water systems in some circumstances.

'Relevant instruments' include a number of written instruments - for example, a body corporate community management statement (including the by-laws and any architectural and landscaping codes) and building covenants (typically imposed by developers).

'Prescribed buildings' include buildings that are:

  • class 1a or 2 (ie a single dwelling or a sole-occupancy unit); or
  • an enclosed class 10a building attached to a class 1a or 2 building (ie an enclosed garage, carport or shed attached to a class 1a or 2 building).

This means that the Ban the Banners provisions do not apply to commercial or retail buildings.

The Ban the Banners provisions commenced on 1 January 2010 and are not intended to have retrospective operation (ie they do not apply to relevant instruments entered into before 1 January 2010). However, the provisions' retrospective operation is questionable in relation to a community management statement (CMS). It is our view that the provisions do have retrospective operation to any new CMS that is recorded in the Titles Office after 1 January 2010 due to the nature of how a CMS is recorded (a new CMS is 'entered into' when it is recorded in the Titles Office). However, where a CMS is not amended after 1 January 2010, the Ban the Banners provisions will not apply (until they are amended by the recording of a new CMS).

To the extent that a by-law does offend the Ban the Banners provisions, section 180(8) of the Body Corporate and Community Management Act 1997 renders that provision void. However, the remainder of the by-laws will remain in force. In addition, section 54DA of the Land Title Act provides that the registrar may refuse to register a building management statement on the land registry if it includes a prohibition, requirement or restriction that has no force or effect under the Ban the Banners provisions.

Therefore, developers and bodies corporate need to carefully consider the provisions they now include in any CMS, building management statement or building covenants to ensure that the provisions do not offend the Ban the Banners provisions.

We recommend you take the following steps:

  • Review any existing or proposed CMS or building covenants to identify any provisions which may be regulated by the Ban the Banners provisions.
  • Consider whether any consent requirement imposed under a clause or by-law offends the Ban the Banners provisions, and amend it if necessary.
  • Review any procedures to be followed when a body corporate or developer considers an application for consent for a design option, to ensure that any decision to not grant consent will not offend the Ban the Banners provisions, and amend those procedures if necessary.
  • Carefully consider whether a CMS or building covenant requires amendment for a staged development where future stages have not yet been created, to ensure that buyers under any off-the-plan sales contracts are not materially prejudiced by any changes, which could potentially allow them a right to terminate their contract.
  • Carefully consider any amendments to any existing CMS (given that the Ban the Banners provisions are likely to apply to this CMS if a new one is recorded in the Titles Office).

If you require our assistance with any of these recommended actions, please contact one of our property specialists.

For more information, please visit our website for a detailed article on this topic.

Commercial Building Disclosure Scheme: If you haven’t already, it’s time to prepare

Starting 1 November 2010, owners and tenants of commercial office space with a net lettable area greater than 2000 square metres must disclose the NABERS Energy rating to prospective purchasers and tenants. From 1 November 2010, it will be an offence to offer commercial office space for sale or to let without a NABERS Energy rating. Heavy financial penalties apply for non-compliance.

To prepare for this change:

  • Get at least three quotes from NABERS accredited assessors for a NABERS Energy rating (for the base building, if possible).
  • Contact a NABERS accredited assessor for the checklist of data required to obtain a NABERS Energy rating.
  • Collate the data required, including details on:
    - the net lettable area for all tenancies in the building;
    - occupancy of the building (hours per week); and
    - energy usage for the past 12 months (utility invoices are required).
  • Book your accredited assessor in for an inspection and interview with the tenancy office managers.
  • Obtain your NABERS Energy rating.
  • Ensure your NABERS Energy rating is properly disclosed in all advertisements for the sale or lease of the building or of any part of the building greater than 2000 square metres.

Whether it's before or after 1 November 2010, if you are looking to purchase a relevant building, ensure that at settlement the seller gives you the original utility invoices from the last 12 months. If you do not have this data, it will be very difficult for you to obtain the rating required to lease relevant space

NABERS Retail

The NABERS Retail tool, launched in December 2009, rates retail centres' use of energy and water (for the use that is under the control of the centre's owner).

To achieve a NABERS Energy and/or Water rating for your centre, you will need to supply your accredited assessor with the following data:

  • Gross Lettable Area of all retail tenancy areas
  • Gross Lettable Area of all shops that receive full air-conditioning services from the centre
  • Number of parking spaces that are naturally ventilated
  • Number of parking spaces that are mechanically ventilated
  • Number of seats within the common area that are assigned to the food court
  • Number of separate cinema theatrettes within the centre
  • Gross Lettable Area of gymnasium tenants
  • Postcode
  • 12 months of continuous data for all energy supplies to the centre's base building (utility invoices are required)
  • 12 months of data for all external water supplies to the centre (utility invoices are required)

Once a rating has been issued from a NABERS accredited assessor, the shopping centre owner can use that rating, in accordance with NABERS rules, in advertising and marketing campaigns for the centre.