CONDO ASSOCIATIONS MUST COMPLY – THEY DON’T HAVE TO PANIC
STATE LAW REQUIRES BUILDING OWNERS TO REPORT ENERGY CONSUMPTION
Say what? That is how many condominium trustees and owners have reacted to the notice informing them of their obligation as building owners to report the energy usage in their buildings by June 30. For many recipients, there were two surprises in this notice: That this reporting requirement exists, and that trustees or apparently random condominium owners are considered to be “owners” of their buildings. We will explain both.
First, the reporting requirement stems from a state law (“An Act Driving Clean Energy and Offshore Wind, Large Building Energy Reporting”) enacted in 2022, requiring all buildings larger than 20,000 sq ft. to report their consumption of energy of all kinds. That law takes effect this year.
The Department of Energy Resources (DOER) has issued regulations clarifying the reporting requirements. Those regulations define building owners as “the person, persons, entity, or entities listed in the Covered Buildings List” that DOER has compiled from public records. For condominiums, the department has often identified trustees or individual unit owners as the “owners” who are responsible for ensuring that the required information is reported and subject to penalties if it is not. Don’t panic. DOER has established procedures for correcting its list.
What to Do
If you have received a notice, and even if you have not, the first step is to “claim your building” by finding it on the DOER’s list of covered buildings. Why do this if you have not received a notice? Because the basic principle – “Ignorance of the law is no excuse” – applies. If your building is larger than 20,000 sq. ft. you must comply with the reporting requirement, regardless of whether you have received a notice informing you of that obligation.
To ‘claim your building,’ a trustee, the association’s’ manager or its attorney should go to the DOER’s web site and review its Covered Buildings List. Your building should be listed there along with the owner the DOER has identified. You can update the ownership information easily by sending a written notice, signed by an association official (a trustee, the association’s attorney or its manager) identifying another “owner” who accepts responsibility for reporting energy use and will be responsible for any penalties. Alternatively, you can simply delegate the reporting responsibility without changing the designated owner, in which case that owner will retain responsibility for any penalties resulting from noncompliance.
DOER will send a notice to the designated owner or the individual with reporting responsibility detailing the compliance process. DOER can levy a penalty of up to $150 per building for every day the owner fails to comply.
But compliance is neither difficult nor onerous. In most cases, it is the electric, gas and steam “distribution companies” or the “Massachusetts Municipally-Owned Electric Company that are required to submit the energy reports. Associations will typically have no direct reporting responsibility for electricity, gas and steam.
Associations will have to report water usage, but again, this will not be difficult. Most mid-rise and high-rise buildings have a single water meter for the entire building. Managers (or trustees in a self-managed community) can either read the meter or obtain usage information from the city or town.
Enforcement Questions
If water is separately metered, associations will have to obtain consumption information from owners. The same will be true for oil. The obvious question: What if owners don’t cooperate? Anticipating this possibility, the DOER regs direct owners to submit a written request to unit owners or tenants asking them to provide the required information. If they don’t reply, as long as building owners submit proof of their “timely” request, documenting their good faith effort to comply, they won’t be fined.
What if the “distribution companies” (for gas, electricity and steam) don’t submit the reports they are required to provide? The regulations aren’t clear, but they seem to suggest that building owners might be fined. This seems odd, to say the least, given that associations do not have ready access to this information. But the penalty threat is not particularly worrisome for two reasons:
It is highly unlikely that the distribution companies will fail to comply; and
The DOER regulations note that “it is [the department’s] intent to work with compliance entities and avoid fines where possible.” Translation: Building owners will have time to adjust to the reporting requirements before DOER begins enforcing them aggressively.
For associations concerned about compliance, the experience with the energy reporting requirements mandated by the Building Energy Reporting Disclosure Ordinance (BERDO) in Boston and the Building Energy Use Disclosure Ordinance (BEUDO) in Cambridge, is instructive. The initial reaction to both ordinances was “the sky is falling.” But the reality has turned out to be much closer to a gentle breeze than the compliance apocalypse many feared. The same will almost certainly be true of the state law. In fact, associations in Boston and Cambridge can use the information collected for BERDO and BEUDO to satisfy the state reporting requirements.
Unlike BERDO and BEUDO, the state law does not require buildings to reduce their energy consumption to zero by 2050 and to meet reduction benchmarks between now and then – another reason for condo associations to feel relatively relaxed about the state law. But the operative word here is “relatively.” The state law, which mimics the reporting requirements under BERDO and BEUDO, will almost certainly add an energy reduction mandate at some point. So relax for now ꟷ but watch this space.
If you have any questions on this new law and if and how it applies to your condominium association, please contact Matthew Gaines.