Mandatory Home Energy Audit Coming to Ontario With New Green Energy Act

By
Real Estate Sales Representative with RE/MAX of Wasaga Beach Inc., Brokerage

The Ontario government, in hopes of converting the province from an auto-industry driven economy to a green-energy driven economy with its groundbreaking Green Energy Act ( http://www.greenenergyact.ca/ ), may soon rival California as North America's "greenest" area.

"With this initiative, Ontario is on track to become a leader in the global shift to clean energy and in preventing dangerous climate change," said Mark Lutes, climate change and energy policy analyst for the David Suzuki Foundation.

However, an interesting tidbit tucked neatly into the legislation aims to make energy audits a mandatory step before someone can sell their home. And this has caused quite a stir in the real estate circles.

In a press release sent out by the Ontario Real Estate Association (OREA), Bob McLean, director of communications, stated: "Ontario REALTORS® agree with the principle of energy efficiency for homes expressed in the Government of Ontario's proposed mandatory home energy audit, but they say that the additional costs will hurt homeowners, especially in these economic times.

"This mandatory government regulation will impose a significant cost on home sellers.  As with most Canadians, we don't believe in green at any cost," said Gerry Weir, President of OREA "It's not the initial cost of these audits that concerns us," he said. "Rather, the results of these audits will be used by home buyers as bargaining chips to significantly reduce the final selling price.

"Today's economic downturn is a terrible time to introduce this measure. Home sellers are already worried about lost equity in their homes. A move like this, which will reduce their value even further, will not help them in any way," Mr. Weir said.

REALTORS® favour government encouragement of energy efficiency in homes through expanded tax breaks and other measures.

In addition, REALTORS® point out that there is no one standard for energy audits. Different firms arrive at different assessments of the same house. "EnerGuide ratings of an existing home can and do vary between energy auditors, depending on the assumptions they make and the extent of data they collect on the building's actual construction," Mr. Weir said.

Furthermore, since there is no regulation of energy auditors, a conflict of interest can arise if a contractor conducts the audit. There is a natural inclination for that contractor to find problems that he can offer to repair for the homeowner.

Many details of the energy audit proposal have not been released. For instance, the government has not said if an energy audit will be required if a property is transferred between family members. Nor have they said how long an energy audit will be recognized as valid. For example, if a homeowner sells within one year of buying a property, will the previous energy audit be recognized?"

--Interesting points, but I think we've got to start leading the way toward more energy efficient homes and this seems to be a step in the right direction. I welcome the opportunity to help guide my buyer clients through the maze of greenwashed homes by having a "window sticker" to look at in the form of an energy audit.

And I look forward to assisting my sellers in finding a reputable energy auditor, by helping explain what changes they can make to their home in order to make it more energy efficient and therefore attractive to a potential buyer. Bring on the Green Energy Act!

     ~Bruce

"People don't resist change. They resist being changed!"  ~Peter M. Senge~

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Anne Lok 02/26/2009 12:15 PM
  2. David Waters 02/28/2009 01:10 PM
Location:
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Canada, eh
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Rainer
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Marg Scheben
RE/MAX four seasons realty limited - Collingwood, ON
Edey - Collingwood, Ontario

I was so disappointed to read the OREA release yesterday opposing the new Act.  I hope you and others will express your views to your local board and also to Gerry Weir (President) 2008President@orea.com and Jim Flood (OREA Government Relations Director) djflood@orea.com

Feb 24, 2009 11:36 PM #1
Rainer
12,351
Bruce Johnson
RE/MAX of Wasaga Beach Inc., Brokerage - Wasaga Beach, ON
ABR CRS, GREEN, e-PRO

Hi Marg,

I know. I felt so disappointed when I read the OREA release opposing the Green Act. I'm sure the Ontario government will straighten out the curves in the legislation so it's a streamlined process for home sellers. You better believe that the auto makers were equally opposed when they had to start putting window stickers on their vehicles and now they are an accepted part of the industry. The government isn't saying sellers have to make the home more efficient after the audit--they just have to show potential buyers the "miles per gallon" of their house. You go, Green Energy Act!

Bruce

Feb 25, 2009 12:42 AM #2
Rainmaker
226,602
Michelle Finnamore
Toronto GTA, Alliston, Newmarket - Vaughan, ON
Preparing your property for sale

HI Bruce, I think people may be viewing this as just another tax grab by the government.

As a Live Green, Live Smart trainer I believe it is a step in the right direction to helping consumers see and understand what they are buying.

It's alot like the old oil commercial, you can pay me now or pay me later but you will pay. With buying a house you can pay for an energy efficient house up front or do the work after, but either way the work eventually has to be done to have an energy efficient home.

I read another post here on AR that all you have to do is look at the heat/cool bills for a property and you can tell if it is energy efficient and you don't need the cost of an audit to find that out.

Marg, I think you will find that as time goes on, the energy audit will become a choice that people make just like having a home inspection done when an offer is put in whether it becomes law right away or not.

 

Feb 25, 2009 06:13 AM #3
Anonymous
Ken Elsey

Bruce ...
What can I say? ... I think it should start with "thanks" - the fact that you have recognized the importance of Energy Efficiency and the cost implications for home buyers (in the long terrm) is great.  This is not a tax grab, this is not the wild idea of a special interest group and this is not a trivial matter.  Besides the initial stimulous to the renovation market, home buyers will save significantly if their home is made more energy efficient.  The savings they realize will also go back into the economy thus creating jobs ... not just for one year, but for the life of the home itself.

Think of it ... there are 4,554,250 households in Ontario.  2,551,765 are single family dwellins.  If half of them reduce their energy use by 10% that could easily translate into over $150,000,000 (each and every year) available for reinvestment in the economy, rather than adding to our carbon footprint.  That can create a lot of jobs.

While the details of the audit process have yet to be defined - I don't believe the home sellers and buyers have anything to fear ... you always see the well kept home, with the renovated kitchen and big bathroom sell ... only now you can add energy efficiency to list.  It's what you would want to buy ... isn't it? 

Thanks again ... you're the kind of realtor I'd want on my side when buying a home!

Ken Elsey

President, Canadian Energy Efficiency Alliance.

 

Mar 10, 2009 07:17 AM #4
Anonymous
Ken Elsey

Bruce ...
What can I say? ... I think it should start with "thanks" - the fact that you have recognized the importance of Energy Efficiency and the cost implications for home buyers (in the long terrm) is great.  This is not a tax grab, this is not the wild idea of a special interest group and this is not a trivial matter.  Besides the initial stimulous to the renovation market, home buyers will save significantly if their home is made more energy efficient.  The savings they realize will also go back into the economy thus creating jobs ... not just for one year, but for the life of the home itself.

Think of it ... there are 4,554,250 households in Ontario.  2,551,765 are single family dwellins.  If half of them reduce their energy use by 10% that could easily translate into over $150,000,000 (each and every year) available for reinvestment in the economy, rather than adding to our carbon footprint.  That can create a lot of jobs.

While the details of the audit process have yet to be defined - I don't believe the home sellers and buyers have anything to fear ... you always see the well kept home, with the renovated kitchen and big bathroom sell ... only now you can add energy efficiency to list.  It's what you would want to buy ... isn't it? 

Thanks again ... you're the kind of realtor I'd want on my side when buying a home!

Ken Elsey

President, Canadian Energy Efficiency Alliance.

 

Mar 10, 2009 07:17 AM #5
Anonymous
Leann Henshaw

I am an office manager for an Energy Auditor, and I get to hear of the wonderful results that customers get from the knowledge they have gained from their audits.  Once you learn why your energy bills are so high, why you always feel chilled in one particular room, and why the back of the house is so 'noisy', you're already half the way there towards solving the problem.  

The new 94% AFUE furnace was expensive, but costs so much less to 'feed', and keeps you warm and toasty.  The chills have vanished from the newly caulked and sealed sunroom, with its recently installed Energy Star windows.  Silence once again reigns in the back bedroom, with its outer walls re-insulated with fluffy green Roxul.   

With the current rebate levels deducted from the prices of these alterations to the home, the expenses are a bit easier to swallow.  I have spoken to customers who call back in tears, to tell me that it has meant so much to them to be able to live more comfortably in the home they love, that they have spent all their lives in, and raised families in.   "If I had known then....", they'll say, 

After all, what dollar amount can you put on "happily ever after"? 

....Leann Holton-Henshaw, BCom.

Feb 25, 2010 03:15 AM #6
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Bruce Johnson

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