GOOD NEWS FOR COMMERCIAL PROPERTY SELLERS – AB 1103 HAS BEEN DELAYED

November 11, 2009 on 12:15 am | In Fascinating Office Real Estate Information, Government, Green, Uncategorized, all |

GOOD NEWS FOR COMMERCIAL PROPERTY SELLERS – AB 1103 HAS BEEN DELAYED

By Jodi Summers

Back in October 2007, when Assembly Bill 1103 was signed, the objective of reducing commercial energy consumption by, January 1, 2010, seemed a long ways away.

AB 1103, which was signed into law in October, 2007, requires the tracking of the energy use of all nonresidential buildings and the disclosure of such energy use as part of the sale, lease, or financing of an entire nonresidential building.  The stated purpose of the disclosure requirement is to “motivate building operators to take actions to improve their buildings’ energy profiles” and “to allow building owners and operators to compare their buildings’ performance to that of similar buildings and to manage their buildings’ energy costs.”

In October, 2009, Governor Schwarzenegger signed Assembly Bill 531 (”AB 531″) into law, temporarily delaying for an indefinite period of time the January 1, 2010 commencement date under AB 1103.

The state advises that owners and operators of nonresidential buildings should not delay preparations for the eventual disclosure requirement as compliance will require a year of records.

In order to comply with AB 1103, the state suggests that all owners and operators of nonresidential buildings should:

* Register for an account with Portfolio Manager

* Create a profile within Portfolio Manager for each nonresidential building owned

* Coordinate with each electrical or gas utility to automate the uploading of data to Portfolio Manager to the extent possible

* Track the implementation of AB 531 to determine the revised Disclosure Commencement Date to be set by the State Energy Resources Conservation and Development Commission (”ERCDC”)

* Ensure the Disclosure Data (defined below) is disclosed as part of any sale, lease, or financing affecting an entire nonresidential building concluded on or after the revised Disclosure Commencement Date

The intent of the law is “commercial valuation of energy usage” during a financial transaction, just as square footage is valued, says Martha Brook, senior mechanical engineer with the California Energy Commission (CEC).

A preexisting executive order, S-20-04, already mandated benchmarking the energy efficiency of state buildings.

http://www.martindale.com/environmental-law/article_Allen-Matkins-Leck-Gamble-Mallory_818224.htm

http://www.facilitiesnet.com/energyefficiency/article/California-AB-1103-Requires-Ener%20gy-Benchmarking-Data-Released-During-Sales–11020

http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_1101-1150/ab_1103_bill_20071012_chaptered.pdf

5 Comments »

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  1. What does this mean to building owners? Well, it means that buildings owners and operators would have a data resource allowing them to compare their buildings’ energy performance relative to other buildings and to manage their energy costs. However, the bill also requires building owners to make that data available to prospective tenants, buyers and lenders. Here’s where the so-called “green premium” comes into play.

    Comment by Arno Harris — November 11, 2009 #

  2. Despite what jargon lawyers come up with, it is critical in this economy and real estate market that property owners and managers have a plan to deal with building performance issues, especially in California with AB 1103.

    Comment by IGreenBuild — November 12, 2009 #

  3. “good post”

    Comment by Natasha Bedingfield — November 26, 2009 #

  4. Global purchasing of green building materials–cement, insulation and wood products- will grow to $571 billion by 2013 from $455.3 billion in 2008, suggests a study by Allied Business Intelligence Research of New York. “Innovation, particularly in wood and insulation, is a key driver behind the growth of green building products,” suggests Larry Fisher, research director of ABI Research’s “next generation” practice.

    http://www.purchasing.com/article/439362-Buying_of_green_building_products_to_increase.php

    Comment by Tom Stundza — December 24, 2009 #

  5. California Green Building Codes to Affect New Data Center Construction

    Companies in California are receiving the most government pressure to this end, as the state implements progressively more stringent environmental (“green building”) standards for new commercial (as well as residential) construction.

    Data centers do not (by themselves) produce carbon emissions or toxic wastes, but they do use large amounts of power for running computer equipment and water to aid in cooling it. A data center can, for instance, easily use hundreds of thousands of gallons of water per day for cooling, in addition to megawatts of power. Thus, data center operators in California are increasingly coming under pressure from the state government as legislators and regulators seek to mandate building practices that reduce energy and water consumption.
    http://datacenterjournal.com/content/view/3546/41/

    Comment by Jeffrey Clark — February 14, 2010 #

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