Certain buildings may already be subject to Washington’s Clean Buildings Performance Standard (CBPS), with further obligations rolling out through the end of the decade. Benchmarking and compliance costs could be significant, and the party responsible for those costs often depends on lease drafting. Property owners should assess now whether and when the statute applies to their buildings, assess existing cost-allocation provisions, and consider updating lease language through amendments and new leases.
Applicable Buildings
CBPS applies to buildings based on the combined square footage of certain floor area types. A Tier 1 building has a combined floor area that exceeds 50,000 square feet of nonresidential, hotel, motel, and dormitory space (“Nonresidential Floor Area”). A Tier 2 building either (i) has a combined floor area (Nonresidential Floor Area and/or multifamily residential floor area) between 20,000 and 50,000 square feet or (ii) has multifamily residential floor area that equals or exceeds 50,000 square feet.
Timeline
Tier 1a buildings (i.e., Tier 1 buildings that exceed 220,000 square feet) are already subject to reporting and performance obligations. Obligations for other Tier 1 buildings will be phased in either on June 1, 2027 (buildings between 90,000 and 220,000 square feet of Nonresidential Floor Area) or June 1, 2028 (buildings between 50,000 and 90,000 square feet of Nonresidential Floor Area). Owners may request an extension of a compliance date, but requests must be submitted no earlier than six months before, and no later than six months after, the applicable deadline. Tier 2 buildings currently have no CBPS energy performance obligations but must develop and implement energy management planning, operations and maintenance planning, and benchmarking, and must report compliance to the Department of Commerce by July 1, 2027. The Department of Commerce is separately required to adopt performance standards for Tier 2 buildings by the end of 2030.
Compliance Cost Allocation
As discussed above, either now or in the near future, certain property owners will be required to (1) benchmark their buildings’ energy usage and (2) if necessary, undertake capital improvements to meet applicable energy use intensity targets or to satisfy a conditional compliance pathway. Whether landlords with NNN leases may pass these costs on to tenants is a product of lease language. Because these two categories involve different activities, lease analysis may produce different conclusions. Thus, the two categories should be reviewed separately.
Penalties
Unlike costs for assessment and upgrades, penalties for noncompliance may not be passed to tenants, unless the penalty results from the tenant’s own failure to provide utility data, building access, or other required cooperation.
Recommended Steps
Landlords should review CBPS and implement a plan for establishing performance metrics and bringing buildings into compliance if necessary, including confirming whether any exemptions may apply. They should also review operating expense definitions in active NNN leases to determine what costs, if any, may be passed on to or shared with tenants. Depending on the result of this review, Landlords may also consider negotiating renewals, amendments, or new leases with tenants to adjust how these costs will be handled in the future. Buildings in Seattle and certain other jurisdictions may also be subject to separate local benchmarking and building emissions performance requirements, which operate independently of CBPS.
If you are a commercial landlord and interested in discussing what your obligations are under CBPS, whether your current lease allows the landlord to pass these costs on to tenants as an operating expense, or how to work this language into a new lease or lease amendment, please contact an attorney in our real estate practice group.
This article is current as of August 2026 and is provided for general informational purposes only. It is not legal advice, and it does not create an attorney-client relationship. CBPS requirements depend on building-specific facts and on Department of Commerce rules that continue to develop.