Building Upgrade Finance in South Australia

Building Upgrade Finance legislation is largely the same in New South Wales, Victoria and South Australia. There are, however, some key differences. Information provided here relates to South Australia.

Building Upgrade Finance is the type of finance, and a Building Upgrade Agreement is the contract that facilitates the repayment of the finance through the local council. A template Building Upgrade Agreement contract has been prepared for transactions in South Australia.

In South Australia support is available to assist you with Building Upgrade Finance through the Building Upgrade Finance Central Facilitator (see Support for contact details).

Building Upgrade Finance is currently available in the following council areas:

  • City of Adelaide
  • Town of Gawler
  • City of Marion
  • City of Onkaparinga
  • City of Salisbury

If your building is located in a council area not listed above OR you are from a council wanting to participate please contact the Central Facilitator.

Eligible works are those that improve the energy, water or environmental efficiency or sustainability of a building. The building must be an existing, non-residential building, located in a participating council area. Learn more

In South Australia, heritage upgrades are also eligible (see Heritage below).

The following also applies in South Australia:

  • Buildings must have been built two years before entering into a Building Upgrade Agreement.
  • A building does not have to be located on rateable land to be eligible.
  • Buildings subject to a strata or community scheme are technically eligible in South Australia, however the Building Upgrade Agreement template is not designed to facilitate strata agreements so may need further investigation. Contact us to discuss further
  • A building located on Crown land may enter into a Building Upgrade Finance agreement if the building owner has received consent from the appropriate Minister (in accordance with the Crown Land Management Act 2009).

Heritage upgrades to non-residential state or local heritage listed buildings are available in South Australia, including:

  • Maintaining, updating or reinstating heritage significance; or
  • Compliance with the Building Rules or the Disability Discrimination Act 1992; or
  • Facilitating the ongoing occupation of the building.

In South Australia, building owners have two pathways for collecting contributions from tenants.

  • Consent Pathway
    The tenant and building owner negotiate and the tenant agrees to pay a contribution to the Building Upgrade Finance repayments; or
  • ‘No worse off’ pathway
    Where upgrade works deliver financial benefits to the tenant (i.e. through utility bill savings), the building owner may be able to collect a contribution to the Building Upgrade Finance repayments from the tenant without their explicit consent. This is only an option if the contribution doesn’t exceed the utility bill savings to be made by the tenant from the upgrade works.

Note that tenant contributions can be recovered without having to renegotiate existing lease agreements, and are considered to be an outgoing expense in a lease.

Further information, including the official methodology for estimating tenant cost savings under the ‘No worse off’ pathway, is available here.

Contact the Central Facilitator if you would like further information.

If you are a building owner and you’d like to make improvements to your building but you’re not sure you can cover the costs with capital, Building Upgrade Finance might help. There is no upfront capital required for eligible upgrade works and repayments can be stretched out over 10-20 years.

If you are a tenant and you’d like your tenancy to be upgraded to provide better working conditions, talk to your landlord about Building Upgrade Finance.

How to get started

Firstly, check to see if Building Upgrade Finance is available in your council area, or what to do if it’s not yet available.

Building Owners

Contact the Central Facilitator who will talk you through where to start and what you need. Alternatively, if you prefer to use your own contacts you can get in touch with your local council, finance provider or one of those listed on the Finance Providers page.

You could also talk to a service provider who can help you determine what is possible. Service providers who have previously been involved in Building Upgrade Finance can be found on the Success page.

Tenants

If you need upgrades to your tenancy, it is worth understanding the opportunity that Building Upgrade Finance offers to share the costs and benefits of upgrades between landlords and tenants. To help the conversation with your landlord, consider what upgrades you’d like to see at your tenancy and whether you’d be willing to contribute financially. Contact the Central Facilitator for more information.

Service providers can assist building owners to scope potential upgrade works and advise on finance options for the works they recommend. In the context of Building Upgrade Finance, a service provider is considered to be any organisation who is involved in the building upgrade process – consultants, companies who install solar PV, LED, or battery storage, energy efficiency experts and so on.

To help building owners with this decision, it’s best to understand the benefits for building owners and the difference between Building Upgrade Finance and traditional finance options.

To learn more about Building Upgrade Finance contact the Central Facilitator.

Local council involvement is essential to making Building Upgrade Finance available to local businesses and building owners.

Building Upgrade Finance can be administered by councils as part of their day-to-day business, and complements existing operational processes such as processing applications and agreements, setting up charges, issuing notices and enforcement for non-payment.

Councils are able to charge a service fee for administrative costs related to the Building Upgrade Finance process and are not liable for non-payment of repayments by building owners.

Why would a local council participate in Building Upgrade Finance?

There are a number of benefits to local councils enabling Building Upgrade Finance in their local area. These include:

  • Providing an opportunity to support non-residential property owners and business tenants to upgrade their buildings to operate more efficiently, helping to reduce operating costs and improve business competitiveness
  • Aligning with economic development and sustainability objectives;
  • Potential activation and rejuvenation of business and community precincts;
  • Encouraging heritage building reactivation.

For more information on local council’s role and the benefits of being involved, see the Local Government Association of South Australia’s Building Upgrade Finance Guide for South Australian Councils.

How does a local council get involved?

If you are considering the potential for Building Upgrade Finance in your local government area, please contact the Central Facilitator for advice throughout the process.

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