BACS Decree: the mandatory GTB, a new determinant of the operability of a non-residential asset

A Paris office building whose heating and air-conditioning capacity exceeds 290 kW was required to be fitted with a building management system (gestion technique du bâtiment, GTB) by 1 January 2025. That deadline has passed. For assets with a capacity between 70 and 290 kW, the next one falls on 1 January 2027, which leaves two budget years to decide, consult and execute. Behind a technical obligation that appears secondary, what is really at stake is the ability to demonstrate the Tertiary Decree (décret tertiaire) trajectory, the allocation of energy capex between landlord and tenant, and, on renewal, the discussion on rental value. This guide deals with the BACS Decree from the standpoint of the investor and the institutional landlord: who is subject to it, from what date, at what cost, and with what consequence for the operability and liquidity of the asset.

The legal framework of the BACS Decree: texts, codification, scope

The applicable texts

The obligation to install the system arises from Decree No. 2020-887 of 20 July 2020 on the building automation and control system and automatic heat regulation, adopted to transpose Directive (EU) 2018/844 amending Directive 2010/31/EU on the energy performance of buildings. It is supplemented by the Order of the same date setting the minimum functionalities of the system. The regime was substantially extended by Decree No. 2023-259 of 7 April 2023, known as “BACS 2 Decree”, and by the Order of 7 April 2023 that accompanies it.

These provisions are codified in Articles R. 175-1 et seq. of the French Construction and Housing Code (CCH). The official terminology is “building automation and control system”, the English acronym BACS standing for Building Automation and Control Systems. Market practice speaks of GTB, building management system. The two notions largely overlap but are not interchangeable: not every GTB installed is necessarily a BACS compliant within the regulatory meaning, and it is precisely on this gap that technical remediation is concentrated in due diligence.

The scope of application

The obligation covers non-residential buildings equipped with a heating system or an air-conditioning system, whether or not combined with a ventilation system, whose useful rated output exceeds the thresholds set by the text. The criterion is therefore neither floor area nor date of construction, but the installed capacity of the thermal equipment. A medium-sized office building with centralised production may be subject to it where a larger asset, but one divided into individual low-capacity installations, will not be.

This capacity logic creates an asymmetry that investors underestimate: holding a portfolio that is homogeneous in floor area may translate into very heterogeneous exposure, and therefore into energy capex that is difficult to budget without a prior asset-by-asset audit. The first step consists in establishing, for each building, the cumulative useful rated output of the generators, and not in reasoning by asset category.

The installation timetable: three deadlines, one already passed

The regime operates in successive stages, each corresponding to a lowering of the capacity threshold or an extension to new buildings.

• Existing non-residential buildings whose useful rated output exceeds 290 kW: installation required by 1 January 2025 at the latest. That deadline has passed, which places non-compliant assets in a position of present breach and not of future risk.
• New buildings for which the planning application was filed on or after 8 April 2024, for a capacity above 70 kW: installation conditions the compliance of the building from its delivery.
• Existing non-residential buildings whose useful rated output exceeds 70 kW: installation required by 1 January 2027 at the latest.

The European trajectory confirms this timetable. Directive (EU) 2024/1275 of 24 April 2024 on the recast of the energy performance of buildings generalises automation and control systems for non-residential buildings and lowers the thresholds by 2030. Member States must transpose it by 29 May 2026. In other words, no relaxation is to be anticipated, and a decision to defer installation by betting on a regulatory rollback rests on an adverse assumption.

For an institutional landlord holding several office buildings, the 2027 deadline must be read backwards: consultation and choice of integrator, technical studies, negotiation of the allocation clause with the tenants in place, partial interruption of operation, then commissioning and configuration. On an occupied multi-tenant asset, the sequence is counted in quarters, not weeks.

Exemptions: the return-on-investment study as an economic limit

The decree provides for an exemption where a study shows that installation of the system cannot be carried out at a cost allowing a return on investment of less than six years. This limit is of legal interest: the regulatory authority itself has set the economic cursor beyond which the obligation yields.

Three operational consequences follow. First, the exemption is not declaratory: it presupposes a documented, dated study, kept on file and enforceable against an inspection as against a purchaser. Second, the payback time is calculated on the basis of the expected operating savings, which makes the result sensitive to the energy price adopted and to the quality of the initial energy survey. Third, a study favourable to exemption today may become obsolete tomorrow, as equipment costs fall and energy prices change. An investor who acquires an asset on the strength of an old exemption study inherits a risk of requalification of its capex plan.

Cases of technical impossibility may also be raised, in particular where the existing installation does not allow the required functionalities to be integrated without complete replacement of the thermal equipment. Here again, the demonstration must be prepared by a professional and archived in the asset's technical data room.

What the mandatory GTB must do: functionalities, classes, interoperability

The Order of 20 July 2020, as amended in 2023, does not merely impose equipment. It defines a minimum functional content: continuous monitoring, recording and analysis of energy consumption, the ability to adjust that consumption, measurement of the building's energy efficiency, detection of losses of efficiency of the technical systems and information to the person responsible for operation on possibilities for improvement, and finally the capacity to communicate with connected technical systems and interoperability between equipment of different makes.

The market technical standard is NF EN ISO 52120-1, which classifies building automation systems into four levels, from class D (non-efficient) to class A (high performance). In practice, regulatory compliance is discussed between class C and class B, the latter opening up markedly higher control gains. The point deserves attention at the consultation stage: an integrator may deliver a system that is formally compliant but incapable of producing usable data series for the annual declaration under the Tertiary Decree. The cost gap between two levels of service is marginal compared with the gap in legal usefulness.

The interoperability requirement deserves to be made contractual expressly. A closed proprietary system locks the owner into a relationship of dependence on its integrator, makes maintenance more expensive and complicates disposal of the asset. The specification must require open protocols, ownership of the operating data for the benefit of the owner, and delivery of the access codes and configuration documentation on first demand. This reversibility clause is a due diligence line in its own right.

The text moreover articulates the BACS regime with that of the periodic inspection of heating and air-conditioning systems resulting from Decree No. 2020-912 of 28 July 2020: installing a compliant system lightens the periodic inspection obligations. This operating gain must be included in the calculation of the payback time, which summary studies frequently omit.

The link with the Tertiary Decree: from an obligation of means to an obligation of result

Two distinct regimes, the same data

The Tertiary Decree, that is Decree No. 2019-771 of 23 July 2019 adopted for the application of Article 175 of the ELAN Law No. 2018-1021 of 23 November 2018 and codified in Article L. 174-1 of the CCH, requires non-residential buildings or parts of buildings with a floor area greater than or equal to 1,000 m² to reduce final energy consumption by 40% in 2030, 50% in 2040 and 60% in 2050 compared with a reference year after 2010, or to reach an absolute consumption level set by Order.

The two regimes are not to be confused. The BACS Decree imposes a means, the mandatory GTB. The Éco Énergie Tertiaire scheme imposes a result, the reduction trajectory. The thresholds of application differ: thermal capacity for one, floor area for the other. An asset may fall under one without falling under the other, but the great majority of office buildings in the Paris stock fall under both. The allocation between landlord and tenant of the obligations arising from the Tertiary Decree and the energy performance certificate (diagnostic de performance énergétique, DPE) is examined in our article on the DPE and the Tertiary Decree in commercial leases.

The link is functional. The Tertiary Decree trajectory is demonstrated by the annual declaration of consumption on the OPERAT platform managed by ADEME (the French environment and energy management agency), by 30 September of each year at the latest for the previous year's consumption. The quality of that declaration depends directly on the asset's ability to produce reliable consumption data, broken down by use and by tenant. That is exactly the function of a good-level GTB. Without structured metering, the owner declares consolidated data that is hard to defend, is exposed to unexplained variations from one year to the next and loses the possibility of documenting corrective actions.

An asymmetric penalty regime

The asymmetry between the two texts is notable and determines the hierarchy of urgencies. Article L. 174-3 of the CCH attaches to a breach of the Tertiary Decree obligations a formal notice, publication of the breach on a State services website, a mechanism known as name and shame, and an administrative fine capped at €1,500 for an individual and €7,500 for a legal entity. The amount is low. The reputational effect, for a management company subject to Regulation (EU) 2019/2088 known as SFDR and to the CSRD Directive, is not.

The BACS Decree, for its part, is not accompanied by an autonomous administrative penalty regime of the same kind. The exposure lies elsewhere: in the landlord's contractual liability towards a tenant whose environmental annex provides performance commitments, in the vendor's warranty in the event of a sale, and in the ability to support a valuation before a valuer or a purchaser. An asset not compliant on 1 January 2027 will not be penalised by a deterrent fine, it will be marked down.

Energy capex: who pays, through which contractual vehicle

Landlord-tenant allocation in a commercial lease

The central question for an institutional landlord is that of who bears the energy capex. Since Law No. 2014-626 of 18 June 2014 known as the Pinel law and its implementing Decree No. 2014-1317 of 3 November 2014, Article L. 145-40-2 of the French Commercial Code requires a precise and exhaustive inventory of the categories of charges, taxes, duties and fees relating to the lease, together with a forecast statement of the works planned for the following three years and a summary statement of the works carried out over the preceding three years.

Article R. 145-35 of the Commercial Code excludes from allocation to the tenant the expenses relating to major repairs (grosses réparations) referred to in Article 606 of the French Civil Code, together with, where applicable, the fees linked to carrying them out, and the expenses relating to works intended to remedy obsolescence or to bring the leased property or the building into compliance with regulations, where they fall within major repairs.

The characterisation of installing a GTB is therefore decisive. A system grafted onto existing thermal installations, without structural work or replacement of the generators, is closer to equipment than to major repairs. A programme including replacement of the air-handling units and of the thermal production falls into another category. In practice, the discussion is settled case by case and the drafting of the works clause weighs as much as the theoretical characterisation.

Financing and contractual levers

Three vehicles deserve to be combined rather than set against one another.

• Energy savings certificates (certificats d'économies d'énergie): the standardised sheet BAT-TH-116 on building management systems makes it possible to monetise the operation. The amount depends on floor area, the class of the system installed and the sector of activity. The monetisation must be secured before the works are committed, the prior existence of the obligated party's active and incentivising role conditioning eligibility.
• The environmental annex, known as a green lease, provided for in Article L. 125-9 of the French Environment Code and made mandatory for office or retail premises of more than 2,000 m². It is the natural vehicle for the tenant's obligation to pass consumption data to the landlord, without which the OPERAT declaration remains incomplete.
• The energy improvement works clause with a mechanism for sharing the savings, under which the landlord finances the investment and recovers all or part of the operating gain realised by the tenant. This structure presupposes a reliable measurement of the gain, and therefore an already operational GTB, which reserves it for the later phases of the programme.

For a multi-tenant asset, the recurring error is to commit the works and then to open the discussion on re-invoicing. The reverse order is required: map the leases, identify those expiring before 2027, and deal with the installation in the renewal negotiation rather than in a contestable service charge call.

Rental value and renewal: what the GTB brings to the rent

Article L. 145-33 of the Commercial Code lists the elements for determining rental value, foremost among them the characteristics of the premises in question and the respective obligations of the parties. An office building equipped with a compliant automation system, allowing fine control of consumption and individualised invoicing, does not have the same characteristics as an asset left under manual regulation.

The point of vigilance concerns the identity of the party who finances. Article R. 145-8 of the Commercial Code provides that improvements made to the premises by the tenant are taken into account, for the purposes of rental value, only at the second renewal following their completion. Conversely, improvements made by the landlord are taken into account from the next renewal. A landlord who lets its tenant finance the mandatory GTB therefore loses an argument for rental valuation for a significant period, while remaining the party subject to the regulation. The choice on financing is not only an accounting matter, it is strategic.

As regards lifting the rent cap (déplafonnement), installing a GTB does not in itself constitute a significant modification of the characteristics of the premises within the meaning of Article L. 145-34 of the Commercial Code. Included in a wider energy renovation programme entailing transformation of the equipment and of user comfort, it does form part of the body of elements submitted to the assessment of the commercial rent judge (juge des loyers commerciaux). The technical documentation of the programme, kept from the outset, conditions the strength of the demonstration several years later. On the other situations in which the landlord can obtain a rent fixed outside the cap, see our analysis of lifting the commercial rent cap.

Operability and market value: the GTB as a due diligence line

The stakes go beyond administrative compliance. Regulation (EU) 2020/852 known as the Taxonomy Regulation and its climate delegated act adopt, for the activity of acquisition and ownership of buildings, alignment criteria including, for large non-residential buildings whose useful rated output exceeds 290 kW, the installation of automation and control systems. An unequipped asset is therefore, for a fund classified under Article 8 or 9 within the meaning of SFDR, an asset that degrades the portfolio's alignment ratio. The effect on liquidity on resale is direct: the pool of institutional purchasers shrinks. For residential buildings, the parallel question arises with regard to the collective DPE and the energy audit, dealt with in our article on the operability of an investment residential building (immeuble de rapport).

On the acquisition side, three reflexes are required on entering the data room. Verify the physical existence of the system and its functional compliance, and not merely the presence of a controller. Verify the consistency between the data produced by the GTB and the declarations made on OPERAT, a significant gap signalling either a configuration defect or a fragile declaration. Finally, verify the existence and date of exemption studies, whose economic obsolescence turns an exemption into unprovisioned deferred capex.

On the disposal side, non-compliance is dealt with by a negotiated price reduction, a condition precedent of completion of the works or a specific warranty backed by an escrow. Leaving the question outside the scope of the representations and warranties amounts to handing the purchaser, free of charge, an argument for renegotiation, generally raised at the worst moment in the signing timetable.

For a distressed asset held by a creditor or taken over at auction (à la barre), the question arises with particular acuity: the acquisition discount rarely includes explicitly the energy capex of compliance. The gap between the stated discount and the real cost of restoring operability emerges at the first serious business plan.

Conclusion: treat BACS as a valuation matter, not a maintenance matter

The BACS Decree is regularly classified by technical departments in the category of operating obligations, on a par with a lift inspection. This is an error of analysis. The text produces three effects that fall within investment decision-making: it conditions the owner's ability to provide evidence under the Tertiary Decree, it opens or closes a discussion on rental value at renewal depending on whether the landlord or the tenant finances, and it determines whether the asset belongs to the perimeter of institutional purchasers constrained by the European taxonomy.

The 1 January 2027 deadline is not a delivery date, it is a compliance date. For an office portfolio, the useful timetable begins in 2026, after an asset-by-asset audit of installed capacity. Before committing any contract, have the nature of the works legally characterised with regard to Article 606 of the Civil Code and Article R. 145-35 of the Commercial Code, and decide on financing in light of its consequences for the renewal rental value. Poorly characterised energy capex is paid for twice: once in cash, a second time in unrecovered rent.

Frequently asked questions

Which buildings are covered by the BACS Decree in 2027? Existing non-residential buildings equipped with a heating or air-conditioning system, whether or not combined with ventilation, whose useful rated output exceeds 70 kW, must be equipped with an automation and control system by 1 January 2027 at the latest. This threshold results from Decree No. 2023-259 of 7 April 2023, which lowered the initial 290 kW threshold set by Decree No. 2020-887 of 20 July 2020. The criterion of application is installed capacity, not the floor area of the building. A capacity audit per asset is therefore the indispensable first step for any budgeting.

Do the BACS Decree and the Tertiary Decree apply to the same buildings? No, the thresholds of application are different. The Tertiary Decree, arising from Article L. 174-1 of the Construction and Housing Code and Decree No. 2019-771 of 23 July 2019, covers non-residential buildings of at least 1,000 m² of floor area. The BACS Decree covers buildings whose installed thermal capacity exceeds the regulatory thresholds. Most office buildings fall under both regimes, the GTB then being the measurement tool for documenting the consumption reduction trajectory declared on OPERAT.

What penalties apply for failing to install the mandatory GTB? The BACS Decree is not accompanied by an autonomous administrative penalty regime comparable to that of the Tertiary Decree. Article L. 174-3 of the Construction and Housing Code does, however, provide, for breaches of the Éco Énergie Tertiaire scheme, a formal notice, publication of the breach on a State services website and an administrative fine capped at €1,500 for an individual and €7,500 for a legal entity. The owner's real exposure is mainly contractual and asset-related: liability towards tenants bound by an environmental annex, warranties given to the purchaser, discount on resale.

Can the cost of installing a GTB be re-invoiced to the commercial tenant? The answer depends on the characterisation of the works. Article R. 145-35 of the Commercial Code excludes from allocation to the tenant the expenses falling under the major repairs of Article 606 of the Civil Code, together with regulatory compliance works where they fall within those major repairs. A GTB grafted onto existing installations is not necessarily assimilated to them, whereas a programme including replacement of the thermal production falls into that category. The drafting of the inventory of charges provided for in Article L. 145-40-2 of the Commercial Code and of the works clause determines the outcome of the discussion.

How can an exemption from installation be obtained? The decree provides for an exemption where a study shows that installation of the system cannot be carried out at a cost allowing a return on investment of less than six years. The study must be documented, dated and kept on file to be enforceable against an inspection as against a purchaser. Its validity is economically dated: changes in energy prices and equipment costs may render an exemption obtained earlier obsolete. A purchaser should never treat an old exemption study as a definitive exemption.

Does installing a GTB allow the rent cap to be lifted on renewal? Taken in isolation, it does not constitute a significant modification of the characteristics of the premises within the meaning of Article L. 145-34 of the Commercial Code. Included in a wider energy renovation programme modifying the equipment and user comfort, it forms part of the body of evidence submitted to the commercial rent judge. It should also be borne in mind that Article R. 145-8 of the Commercial Code allows improvements financed by the tenant to be taken into account only at the second following renewal, which argues, from the landlord's standpoint, for financing borne by the owner.

Should BACS be addressed in acquisition due diligence? Yes, systematically for any non-residential asset. The checks cover the installed useful rated output, the existence and functional compliance of the system with regard to the Order of 20 July 2020 as amended, the consistency of the data produced with the OPERAT declarations, the date of any exemption studies and contractual reversibility as against the integrator. Non-compliance is dealt with by price reduction, condition precedent or a specific warranty with escrow, and not by a simple reference to the vendor's general representations.