BOSTON ENERGY ORDINANCE WILL CREATE DIFFICULT AND COSTLY COMPLIANCE CHALLENGES FOR CITY’S CONDO ASSOCIATIONS
Most of us recognize, in an abstract way, that climate change is a critical problem we all must help to solve. A revised ordinance has made that abstract obligation concrete for Boston condominium associations.
Enacted in 2013, Boston’s Building Energy Reporting Disclosure Ordinance (BERDO), required commercial buildings and the largest residential buildings in the city to report their annual consumption of water and electricity. Revisions enacted last year extended the reporting requirement to all residential buildings with 15 units or more. The amendment also added a requirement that buildings not only report their energy consumption but reduce it in stages, achieving zero net carbon emissions by 2050. Virtually all condominiums, cooperatives and apartment buildings in the city are subject to these requirements.
This is a big deal, to put it mildly, and most condominium association boards and managers are just beginning to understand how big, how challenging and how expensive it is going to be to comply.
Reporting Requirements
Buildings subject to the regulations must report their annual energy usage in carbon emissions per square foot. That information isn’t included in your electricity, gas and water bills, but it is easily obtainable from the companies providing those services
The ordinance requires a “qualified energy professional” to verify the accuracy of the data you submit. You will find a link to a list of individuals and companies meeting that definition on the BERDO website. is not an exclusive list; an energy professional with whom the association or its manager has an established relationship may be able to provide the verification you need.
If units are separately metered, the association can ask owners to provide their usage data, but the ordinance specifies that they “shall have no obligation” to do so, adding that their failure to provide the information “does not relieve [the building owner] of the obligation to report.” It is the association’s obligation to report energy usage and it is the association that will face penalties for failing to do so.
The penalties are not insignificant: $300 per day for buildings with 35 units or more or more than 35,000 sq. ft.; $150 per day for smaller buildings, with 15 to 35 units or less than 35,000 sq. ft.
Many associations learned about the BERDO requirements for the first time from violation notices they received informing them that they had failed to meet the original May 15, 2022 deadline for submitting their annual energy usage report. Associations could request to extend the deadline to December 15, 2022. However, even if the request was granted, it did not give boards that were just beginning to focus on this issue much time to comply. And many associations that were able to meet BERDO’s reporting deadline have found it difficult to identify a “qualified energy professional” who could verify the data in time.
For that reason, Boston’s Environment Department, which oversees BERDO, has begun allowing boards to request an additional extension for third party verification. The department does not seem to have begun levying fines or seeking court orders requiring compliance, but at some point, presumably, it will begin to pursue those remedies.
Emissions Reduction
While some associations may find the reporting requirements annoying, compliance will not be difficult. The same can’t be said of the emissions reduction requirements. Buildings with more than 35 units must begin reducing their emissions in five-year increments in 2025; buildings with between 15 and 35 units do not have to begin that process until 2031, but all buildings must reach zero emissions by 2050.
Owners may request a “hardship compliance plan” if “building characteristics or circumstances” create compliance hardships. The ordinance cites historic building designations, housing refinance timelines, pre-existing long-term energy contracts, and financial issues as examples of circumstances that might qualify for a hardship plan.
Owners may also request an “individual compliance schedule,” easing the phased, five-year reduction milestones, but they will have to reach the 50 percent reduction mark by 2030 and achieve zero emissions by 2050.
The penalty for failing to reach the interim and final emission-reduction targets is $1000 per day for larger buildings (more than 35 units) and $300 per day for smaller ones (between 15 and 35 units).
Reducing energy consumption will create different challenges for different buildings, depending on their age and existing energy infrastructure, among other factors. But no building is going to reach zero emissions by adding insulation or installing energy-efficient lighting and low-flow toilets. Compliance for most will require major and costly modifications ─ converting from oil and gas to electricity, for example, installing solar panels, or possibly replacing existing energy systems. Financing these projects will be a concern for alL.
What to Do
Start by asking one of your energy service providers to conduct an energy audit, which most will do at no cost. The audit will recommend steps the association can take to reduce its energy consumption. Equally important, many energy companies will cover at least a portion of the upgrade costs.
Consider retaining an energy consultant to help the board identify and implement the most cost-effective emissions-reductions strategies for your community.
Consider purchasing renewable energy certificates or entering power purchase agreements under which a third party builds, maintains and operates a renewable energy source on the association’s property. These are among the energy-conservation options the BERDO ordinance mentions. They aren’t appropriate for all, but they may provide solutions for some.
Inform owners early on of the new BERDO requirements, the likely costs of complying with them and the hefty penalties for failing to do so. There is a strong argument to be made that most significant energy-reduction measures could meet the legal definition of “improvements,” which owners must approve.
Anticipate resistance ─ and legal challenges ─ from some owners. While many may respond positively to the ‘we’re all in this together’ message, some will reject it, opposing the special assessments, dues increases and /or bank loans that may be required to meet the association’s overall energy reduction goals, and balking as well at the need for owners to reduce their individual energy consumption.
Owner resistance may be the biggest challenge many communities will face. If 45 owners in a 50-unit complex diligently reduce their energy usage but five others refuse to do so, those five owners could prevent the community from meeting its emission-reduction milestones, triggering the daily fines and possible court action the ordinance allows. With that prospect in mind:
Consider adopting regulations authorizing the board to impose fines on owners who refuse to submit required energy consumption information or fail to cut their energy usage.
BERDO is sweeping in its requirements and its impacts, and someone will almost certainly challenge the ordinance for that reason. But unless the courts issue a temporary injunction barring enforcement while the legal challenges play out, associations will have to comply with both the reporting and the emission-reduction requirements. With the initial reporting deadline already in the rear-view mirror, boards that haven’t begun the compliance process need to start playing catch-up now.
By: Dillon Brown