Building Energy Disclosure at Transaction: What CA and WA building owners need to know

While several cities are now requiring building energy benchmarking and reporting, two states have implemented programs that require disclosure to prospective buyers, lenders and lessees for commercial buildings. Failing to comply can result in fines and/or civil judicial proceedings.


Under the Nonresidential Building Energy Use Disclosure Program (AB 1103), nonresidential buildings greater than 5,000 square feet must be benchmarked using Energy Star’s Portfolio Manager.  A building’s energy use must be disclosed to buyers, lenders and lessees at least 24 hours prior to a signature agreement.

A building owner or operator is required to benchmark and disclose a building’s energy use




Modelled after AB 1103 in CA, Washington’s SB 5854, also known as the Efficiency First Bill, requires all commercial buildings greater than 10,000 square feet to rate energy performance and disclose to all prospective buyers, lessees and lenders prior to the closing of the transaction.  Additionally, public buildings greater than 10,000 square feet must have an investment grade energy audit completed if the Energy Star score is less than 50. Cost effective measures must be implemented by 2016.  State agencies can’t lease or renew a lease in a privately owned building with a score of less than 75.

Find out more about Energy Benchmarking and Disclosure Laws across the country.


About Strategic Energy Group

Strategic Energy Group, a division of Nova Consulting Group, assists real estate investors in evaluating efficiency and reducing utility costs.  Drawing on extensive experience in real estate development and energy consulting, the experts at SEG specialize in translating the energy performance of  buildings into financial terms.  This analysis gives our clients greater control of their utility expenses, helping to reduce financial risks in an unpredictable energy market.

Reach us at:

Phone: 800-939-8339


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