BUILDERS’ BLOG – December 2013

Beginning January 1, 2014, there are several significant new legislative laws that become effective, including:

The California Energy Commission’s Nonresidential Building Energy Use Disclosure Program (AB 1103) regulations, under certain circumstances, require nonresidential building owners to disclose benchmarking data to potential buyers, lessees and financiers, for commercial buildings greater than or equal to 10,000 square feet, will be enforced.

Although the law was scheduled to come into effect in 2009 for utilities and in 2010 for building owners, the deadlines have been delayed several times.  The new enforcement dates are as follows:

  • January 1, 2014 for buildings 10,000 square feet and larger
  • July 1, 2014 for buildings 5,000 to 9,999 square feet

Smoke Detectors Specifications Changes
Beginning July 1, 2014, the State Fire Marshall will not approve a battery-operated smoke alarm unless it contains a non-replaceable, non-removable battery capable of powering the smoke alarm for at least 10 years. Furthermore, starting January 1, 2015, the State Fire Marshall will not approve a smoke alarm unless it does all of the following: (1) displays the date of manufacture on the device; (2) provides a place on the device to insert the date of installation; and (3) incorporate a hush feature.

Make sure you check the State of California website:  www.bsc.ca.gov for all the new laws that affect your particular business.

Builders’ Blog

As 2013 winds to an end, it’s once again time to review a couple of the newer laws in construction:

Changes regarding ADA accessibility:  Beginning in July 1, 2013, California commercial leases and rental agreements must include a disclosure regarding whether the property being leased has been inspected by a Certified Access Specialist (CASp) and, if a CASp inspection has occurred, whether the property being leased has met all construction-related accessibility standards under current law.  A CASp refers to any person who has been certified pursuant to Section 4459.5 of the California Government Code.

Changes regarding Retention Fees:  Retention is a tool that allows a project owner to withhold some payment to contractors until the entire project is complete and a certificate of completion or certificate of occupancy has been granted by the local authorities. In the past, the “normal” retention fee for contractor’s work was approximately 10%. The new law, California Public Contract Code Section 7201, provides new limits on retention, including five percent of any payment and an overall cap on total retention of five percent of the contract price.

Make sure you check the State of California website:  www.bsc.ca.gov for all the new laws that affect your particular business.

Two New Disclosure Requirements for California Real Estate Transactions

Beginning July 1, 2013, two new disclosure requirements take effect for California Real Estate Transactions:

  1. California Civil Code Section 1938 requires that leases for ALL commercial properties entered into on or after July 1, 2013 state whether the subject premises has been inspected by a “Certified Access Specialist” and if so, whether the property has or has not been determined to meet all applicable construction related accessibility standards pursuant to California Civil Code Section 55.53.California Civil Code Section 55.53, et seq., addresses the role of the Certified Access Specialist, including the preparation of a written assessment of whether the assessed site meets all applicable construction-related accessibility standards or if corrective actions are required. Such assessment will hopefully curtail construction related accessibility lawsuits (including claims alleging violations of the Americans with Disabilities Act) as such written assessments would serve as evidence of compliance (or non-compliance) with applicable accessibility laws.
  2. New Mandatory Energy Use Disclosure Requirements: Nonresidential Building Energy Use requirements set forth in California Public Resources Code Section 25402.10 which require all owners who are going to sell, lease, or finance “Nonresidential Buildings” which are 50,000 square feet or more located in California to disclose the property’s energy use data for the most recent 12 months. Similar disclosure requirements for smaller properties will take effect in 2014.

Compliance schedule:

  • July 1, 2013: Buildings with a total floor area exceeding 50,000 square feet.
  • January 1, 2014: Buildings with a total floor area measuring more than 10,000 square feet, but not more than 50,000 square feet.
  • July 1, 2014: Buildings with a total floor area measuring at least 5,000 square feet, but not more than 10,000 square feet; buildings with a total floor area measuring less than 5,000.

What it means to you:

  • More red tape: Additional mandatory disclosure requirements in selling, leasing, or obtaining financing.
  • More potential liability: The failure to make such disclosures could be the source of potential claims by buyers, tenants, and lenders.
  • Additional due diligence/value measure: New system allows buyers to compare a building’s energy consumption and efficiency should prompt prudent owners to evaluate how they may make their building more “competitive” and prudent buyers to review this as part of their due diligence and number-crunching.
  • Risk of Delay: Failure to commence the disclosure process well in advance of the transaction could result in closing delays.

Builder’s Blog

At the end of each year, it’s always a good idea to review the newest rules and regulations that become effective in January.

One such regulation that takes effect in January 2013 is The California Energy AB 1103, which requires the owner of a non-residential property with California, in advance of certain financial transactions, to benchmark the building’s energy use using the U.S. EPA Portfolio Manager system and to disclose statements of the building’s energy usage to potential buyers, lessees, and lenders.

Make sure you check the State of California website: www.bsc.ca.gov for all the new 2013 laws that affect your particular business.

2012 has been one of our busiest in the last few years, and we take it as a promising sign that things are finally starting to turn around in the real estate market.

We look forward to working with you and your clients next year and for many years to come.

Best wishes for good health, happiness, and prosperity in the coming year.

Things have really started to pick up this fall for Keegan & Coppin Builders!

With over $580,000 in work scheduled for the next few weeks, we are doing everything from a substantial remodel project at 439 College Avenue for Santa Rosa Memorial Hospice – to ADA repairs on Santa Rosa Avenue – to Medical & Business Office remodels.

If you are thinking about remodeling or making repairs, now is the time to get it on the schedule books. We can work up an estimate and schedule the work to be done.

Be Prepared – AB 1103 will happen in January 2013!

A new California Energy Commission regulation will take effect January 1, 2012. This regulation, AB 1103, requires the owner of a non-residential property with California, in advance of certain financial transactions, to benchmark the building’s energy use using the U.S. EPA Portfolio Manager system and to disclose statements of the building’s energy usage to potential buyers, lessees, and lenders.

The proposal states a building owner shall comply with this article according to the following schedule:

January 1, 2013 Implementation for Buildings over 50,000 sf
July 1, 2013 Implementation for Buildings over 10,000 sf
January 2, 2014 Implementation for Buildings over 5,000 sf

This can be accomplished by going to Energy Star’s website.