Realtors hot and cold on energy audit

While many homeowners might be worried and wary of the new "green" home audits being introduced by the province, at least one local real estate broker likes the idea.

The new provincial Green Energy Act will require all new and resale homes to undergo the energy audits at a cost of about $300, half of which is eligible for a provincial rebate, by 2011.

Public reaction to the act, introduced about two weeks, ago, has been extremely mixed. Both homeowners looking to sell and people wishing to buy are wary of being slapped with another fee in this harsh economic climate, since the act doesn't specify who will pay for the audits.

Many are also worried that repairs and retrofits suggested in the audit will be made mandatory, although there is no provision for that yet.

"I can't speak for local realtors as a whole but of those I've spoken to, reaction is mixed both for and against," local realtor Marg Scheben-Edey said in an email interview.

Detractors of the new act, including the Ontario Real Estate Association (OREA), cite several reasons for their opposition, Scheben-Edey said. Their objections include:

1. A belief that audits, while a good thing in general, should be voluntary versus mandatory.

2. That mandatory audits will have serious cost implications for home sellers.

They feel that those who can afford the retrofits will want a premium sale price and those who cannot afford them will lose out.

3. That home energy auditing is not an exact science with the potential for different ratings from different auditors.

4. That there will be delays in selling property due to a shortage of trained auditors in Ontario.

"Personally, I feel mandatory audits are the only way we're going to meet our provincial environmental goals in the housing sector," she said. "Audits have existed for a long time yet I have not seen any level of voluntary compliance thus far from the real estate industry. I don't believe in the financial arguments put forth because buyers have always determined the sale price of homes; it's worth what a buyer is willing to pay and they take many factors into consideration in their decision making."

Vickie Bell, the new president of the Georgian Triangle Real Estate Board, said she agreed with the principle of the inspections. However, she questioned the lack of details in the act and making the audits mandatory. Bell said there aren't enough qualified auditors available to do the work right now, and that would have to be addressed.

One possibility, she said, would be to carry out the audits when a home inspection is being done.

Scheben-Edey criticized some of the concerns being voiced by opponents to the act.

"Many of the statements made by OREA and other opponents have no basis in fact but are merely speculative. I think that, all things being equal, a home that has had extensive energy retrofits completed will sell for more than it might today however, that doesn't mean a home that has not had them done will sell for less than it would today. Retrofits should lead to an increased value just any significant home improvements would. I am also disturbed that opponents are only thinking about 50 per cent of the consumers namely, the home sellers. What about home buyers and what is in their best interest?"

She added that "home buyers today are rapidly becoming more demanding of energy efficient features in both new and resale homes.

"It is quite possible that a high rating on a home will yield a better selling price for a homeowner while a low rating could place downward pressure on a home's value," Scheben-Edey said. "Buyers will pay for what they feel offers them the best value and if energy efficiency is at the top of their list, then you would expect a different value to emerge for different homes. Is that wrong? I don't think so.

"In Ontario, we already have things like mandatory emission testing, fuel consumption ratings, Energy Star ratings andEnerGuide consumption ratings. Each of these was also met with controversy when they were first introduced but they quickly became an acceptable norm that brought enormous environmental benefits," she It's only by making these audits mandatory that we can effect the speed of change needed to meet our agreed upon environmental goals.

Scheben-Edey qualified her support by saying there are several issues the province needs to address.

"I do agree that the legislation and its regulations will need to address several valid concerns in order for it to work including;

1. Standardization of testing processes. Right now, auditors are trained by NRCAN and they use computer generated modeling that builds in consistency.

2.While there are many new auditors already in training in anticipation of this new Act, there will need to be many more in order to meet the demand for enough trained auditors to handle the over 200,000 real estate transactions that take place each year in Ontario. Personally, I think there is potential to have home inspectors licensed and certified to both perform home inspection and energy audits. Currently, they are not regulated to do either.

3. There are questions about how this will apply to condominiums where owners have limitations on how much they can personally do in their units. This needs to be addressed but from a market perspective, buyers are comparing apples to apples in this case.

4. There are questions about non-sale transactions such as family transfers and other non-arms-length transactions and if this would apply.

5. A big question is how long would an audit be valid for? This has not yet been addressed and is an important question as standards and processes change over time.

6. Many people do not seem to be aware that this will also apply to owners who rent out their properties and that they will need to provide an audit to potential tenants. Again, the mechanics of this requirement will need to be flushed out more fully."

She concluded by saying "when you work out the numbers, energy retrofit subsidies return enormous bang for the buck and it's only a matter of educating consumers as to how this is not something to fear but rather, something to embrace."

In a brief presentation to council Monday evening, Coun. Norm Sandberg said he felt the act was being rushed. "A lot of good ideas," he said, have suffered from their advocates being in too much of a hurry to implement them.