Tuesday, March 10, 2009

Mandatory Home Energy Audits

A couple of weeks ago the Ontraio government announced through its Green Energy Act potential legislation that would make it mandatory for home sellers to have a home energy "audit" done on their homes prior to finalizing a sale. Since that time numerous critics within the real estate profession including the Ontraio Real Estate Association have stepped forth objecting to the process on a number of grounds.
First let it be known that the real estate profession supports "green" initiatives and have in fact created a new designation for REALTORS® to obtain in support of increasing their knowledge and awareness regarding energy efficiency. Home buyers that I deal with regardless of their financial status, all seem to be genuinely concerned about rising energy costs and environmental issues. With this proposed legislation, home sellers would be required to have an energy audit done on their respective homes in order to determine its energy efficiency a process that costs around $300.
While the legislation is well-meaning the most serious shortcoming is two-fold. One is that there currently exists a shortage of qualified energy auditors throughout the province. More significantly, there is no universally accepted or standardized rating system leaving much of the test results for a home subject to the auditor's "interpretation."
Personally I am in favour of the concept of mandatory audits provided they result in some meaningful and reliable results that are universally applied to all properties. Proponents against the legislation argue that it will add an additional cost to home sellers and will give buyers additional leverage to drive down prices on those homes that obtain poor results from their audits. To the first point, a $300 expense for an audit is hardly going to break the back of a home seller. I have spoken with some individuals that have already had an audit done on their homes in the interest of determining how they can reduce their energy consumption costs. Most report that the audit uncovers numerous and inexpensive ways inwhich they can improve their home's energy efficiency. As far as buyers using the results of an energy audit to drive down the price, that should hardly be an issue. If a listing REALTOR® has done their job, they should have already made monetary adjustments in the listing price to account for such characteristics or energy deficiencies as old windows, an outdated heating system etc. When showing older properties, I am always quick to point out to a potential buyer if a homeowner has replaced older windows, improved the insulation or has installed a new mid or high efficiency furnace. Other energy improvements that have been made to a property may not be so obvious and this is where an energy audit system could prove to be useful for both home sellers and buyers alike.
Like all legislation, the introduction of mandatory home energy audits will be a controversial issue in certain circles. While the concept is a good one, the overall effectiveness will ultimately be contingent on ensuring that an adequate number of trained/qualified auditors will be available to handle the workload and more importantly that a standardized rating system be established so as to create a consistent rating system that can be applied without undue "subjective" interpretation by the individual conducting the audit. Ontario's "Drive Clean" program has already made it mandatory for vehicle owners in the province to have emission tests done on their cars, this is nothing more than the same procedure for your home. The Drive Clean program has been claimed by many to be nothing more than a scam. If the mandatory energy audit legislation is passed, let's hope the testing process and the accompanying results are arrived at accurately, fairly and consistently. If not, then the whoole process will be just another money-grab with no appreciable benefits to the environment achieved.

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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.