California's commercial building energy disclosure law, AB 1103, will go into effect July 1, 2013.

The law requires commercial building owners to disclose a building's historical energy usage prior to selling, leasing, or financing the asset. This will turn into one more third party report a commercial building owner needs to get a deal done. If done well, buyers will gain a better understanding of the building that they are buying. Perhaps market forces will reward more energy efficient buildings.

Governor Arnold Schwarzenegger signed AB 1103 into law in 2007 and the implementation of the law has been postponed several times. The California Energy Commission postponed implementation to consider a host of concerns from the real estate industry. Now, in 2013, the law affects a commercial real estate finance industry that is becoming increasingly regulated. The key element to the law is getting the data efficiently from the utility companies and the California Energy Commission has worked with the utilities to make this process easy and automated.

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Tony Liou

Tony Liou is the founder and President of Partner Energy, a division of Partner Engineering and Science that offers helps its clients improve their properties’ energy, water, and carbon efficiency, as well as property resilience and sustainability. Tony frequently shares his insights and discusses best practices at speaking engagements and through industry publications. He has presented at conferences including MBA CREF, NAREIM Meetings, CREFC Annual Conference, Environmental Banker Association (EBA) Annual Meeting, and IMN ESG Forums.