Right to Hire Survives
Thankfully, Assembly Bill 350 (Solorio) has been defeated, and building owners will continue to be free to switch building service providers (janitorial, window cleaning, landscaping, etc.) without being held hostage by an existing relationship with a service provider. In our previous update of May 20, 2011, we warned that AB 350 would have placed incredible burden on commercial building owners to retain and pay the employees of an existing service provider for at least 90 days, even if the owner decided to hire a new company to perform the designated services. This legislation also mandated that any purchaser of commercial real estate retain the designated contractor’s employees. The new statute would have applied to hospitals, commercial properties, restaurants, grocery stores, and hotels. Oddly enough, the purported “right to work” goal of the statute could have put the employees of “new” service providers out of work.
After a heavy lobbying effort that was led in large part by the California Building Owners and Managers Association, the bill was defeated on September 10th of this year. This is welcome news for the commercial real estate industry as this additional government mandate would have limited owners’ rights and stymied efforts to reduce operating costs. In this uncertain economic period, many people believed that AB 350 had the potential to further depress the market and result in additional job loss.
Building Owners Must Disclose Energy Use
The California Energy Commission has confirmed the implementation schedule for AB 1103. This statute requires non-residential building owners to disclose the energy benchmarking data and ratings for the most recent 12-month period to a prospective buyer, tenant of the entire building, or lender providing financing to the entire building. In our update of October 15, 2009, we informed you that the implementation of this requirement had been delayed to avoid potential negative impacts on pending real estate transactions. Even the California legislature realized that more regulations could harm the market’s recovery efforts. The Legislature delegated the implementation schedule to the California Energy Commission.
Although the disclosure requirements are not complicated, owners should be aware of this additional item to add to the transactions checklist to avoid potential liability. Here is the implementation schedule:
- July 1, 2012 – Buildings with more than 50,000 square feet
- January 1, 2013 – Buildings with 10,001-49,999 square feet
- July 1, 2013 – Buildings with 5,000-10,000 square feet.
Gas and electric companies are required to maintain the required records and upload the data to the US EPA’s ENERGY STAR Portfolio Manager. So, the information should be readily available by visiting this website (www.energystar.gov) and setting up the building’s account. The California Energy Commission has also published a helpful flowchart for accessing the information on its website at www.energy.ca.gov/ab1103/documents/index.html.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.
Copyright 2011 Reuben & Junius, LLP. All rights reserved.