NEW CALIFORNIA DISCLOSURE REQUIREMENTS

Two new disclosure requirements have been enacted for California effective until January 1, 2014. While NAI Capital cannot provide legal, financial or tax advice, we recommend that you consult with your attorneys and advisors on how to comply with these requirements.

New Energy Use Disclosures (AB 1103)

Starting on January 1, 2014, owners of commercial buildings in California must provide specific disclosures regarding energy use in connection with certain transactions.

Below are the effective dates depending on the size of the building, the types of applicable transactions, the associated deadline for the disclosures, and a summary of the four (4) disclosure documents.

1. Effective Date

Date	Size of Property
January 1, 2014	>50,000 square feet
January 1, 2014	>10,000 – 50,000 square feet
July 1, 2014	5,000 – 10,000 square feet

2. Applicable Transactions and Disclosure Deadline

Transaction	Disclosure Deadline
Purchase	24 hours prior to execution of sales contract
Lease of the entire building	24 hours prior to execution of lease
Financing of the entire building	Submission of loan application

3. Information to be Disclosed

Document	Description
Disclosure Summary Sheet	Prescribed document describing the subsequent three disclosure documents.
Statement of Energy Performance	Report generated by Energy Star® Portfolio Manager website describing energy performance.
Data Checklist	Report generated by Energy Star® Portfolio Manager website summarizing property’s physical and operating characteristics.
Facility Summary	Summarizes Statement of Energy Performance and Data Checklist.

4. Samples of the documents can be found at the following: www.energy.ca.gov/ab1103/index.html

Preparation in Advance of Disclosure

At least 30 days prior to the required disclosure, the property owner must open or update its account on the EPA’s Energy Star® program Portfolio Manager website.
The owner must provide certain information on that site and, through the site, request utility companies and energy providers to release data into the owner’s Portfolio Manager account. (Note that the utility companies and energy providers have 30 days to upload the data)
Plan accordingly to ensure that any potential transactions are not delayed.

Additional Information

Additional information can be found at the following:
www.energy.ca.gov/ab1103/index.html.
There are plans to post a FAQ page and a guidebook on this website in the near future.

New Disability Accessibility Disclosures (SB 1186)

Starting on January 1, 2014, all commercial property owners and/or lessors must state on every lease form or rental agreement whether the property has undergone inspection by a Certified Access Specialist (CASp), and, if so, whether the property has or has not been determined to meet all applicable construction-related accessibility standards. (California Civil Code Section 1938.) This disclosure is the obligation of the property owner.

SB 1186 does not require that the property be inspected by a Certified Access Specialist, only that the disclosure be made if it has been inspected. The requirement is part of a larger reform package aimed at protecting landlords and tenants from predatory accessibility lawsuits. Landlords and tenants will receive certain benefits under the law if the property has been inspected. The purpose of the disclosure is to inform tenants so that they can request the landlord undertake an inspection or that the tenant can have the property inspected themselves.

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