Office buildings, insured for the owner.

Energy benchmarking: a yearly filing most owners forget

Large office buildings in California owe a yearly energy report. The California Energy Commission's benchmarking program, set up under AB 802, applies to buildings with more than 50,000 square feet of gross floor area, with reports due by June 1 each year. You report through ENERGY STAR Portfolio Manager, and the Commission makes building data public. Cities with their own benchmarking ordinance can be exempt from the state filing, so the rule you follow depends on where the building sits. Outside California, benchmarking rules vary by state and city.

Los Angeles runs its own program, the Existing Buildings Energy and Water Efficiency (EBEWE) ordinance, which reaches privately owned buildings of 20,000 square feet or more. LADBS's FAQs set the duties:

• Benchmark by June 1 every year for the prior calendar year, using all 12 months of energy and water data.
• Audit and retro-commission every five years, due December 1 on a schedule set by the last digit of the LADBS Building ID. IDs ending in 0 or 1 are next due December 1, 2026; 2 or 3, December 1, 2027. A California engineer or architect supervises the work.
• Tenants paying their own utilities doesn't excuse the owner. If a tenant won't sign LADWP's consent form, a lease term letting you see the tenant's usage can stand in for it.
• Vacancy alone doesn't earn an exemption, and an EBEWE exemption doesn't excuse a building of 50,000 square feet or more from the state program.

Each building's status is posted publicly, and LADBS says it may later be recorded on the property as an open violation. Add the utility-data clause at the next lease renewal.

Elevator permits are the owner's job, not the service company's

In California, the Cal/OSHA Elevator Unit, part of the Department of Industrial Relations, permits and inspects elevators. Title 8, section 3001 says no elevator may be operated without a valid, current permit from the Division. For a passenger or freight elevator, the permit or a copy has to be posted conspicuously in the car.

• Term: no longer than one year. The Division may issue a two-year permit if it finds the elevator safe and it is covered by a full maintenance contract requiring service at least monthly. The service company must tell the Division within 30 days if that contract ends or changes.
• Renewal: request a reinspection up to 30 days before the permit expires, using the Division's form, sent to the district office for the building's address.
• Corrections: after a Preliminary Order, written notice that the fixes are done is the owner's responsibility. If it doesn't arrive within 30 days, the Division issues an order to correct or show cause, and if you still don't comply, an Order Prohibiting Use that shuts the elevator down.

For underwriting, I ask for the current permit, the maintenance contract and any open orders. They support the equipment breakdown and liability submissions. Other states run their own elevator programs.

Two lease and policy clauses that decide claims

Waiver of subrogation. If your lease has the owner and tenant waive claims against each other, timing matters. IRMI notes that insurance policies generally don't bar coverage when you waive recovery against a third party before a loss, while many policies exclude coverage if you waive it after a loss. So sign the waiver in the lease, never in a settlement letter after a fire. If a tenant or lender wants proof that your coverage isn't affected, ask your insurer for a written waiver of subrogation.

Vacancy. IRMI describes the vacancy provision in most commercial property policies as one that severely restricts coverage once a building has been vacant for a set number of days, typically 60. Some forms also restrict coverage for buildings that are unoccupied. Read your policy's own definition of vacant, because it decides when the clock starts as tenants move out. If a big tenant is leaving, tell me before the move-out date so we can look at a vacancy permit endorsement or a vacant building policy while there's still time.

Official sources

• California Energy Commission: Building Energy Benchmarking Program
• LADBS EBEWE Benchmarking FAQs (rev. 11/15/2024)
• LADBS EBEWE Audits & Retro-Commissioning FAQs (rev. 10/18/2024)
• LADBS Non-Ductile Concrete Retrofit Program
• Cal. Code of Regs., Title 8, §3001: Permits to operate elevators
• Cal/OSHA Elevator Unit: Building/Elevator Owners
• 44 CFR 59.1: Substantial damage and substantial improvement definitions
• FEMA: Frequently Asked Questions, Substantial Damage
• IRMI glossary: Ordinance or law coverage
• IRMI glossary: Waiver of subrogation; Vacancy provision