This post is sure to spark some debate!

The Province of Ontario has introduced legislation that would require home energy audits prior to the sale of all homes if the legislation were passed.

I’m not a tree-hugger, nor am I an energy waster.  I’m a Realtor.  And I hate the idea for the home energy audit…

As I sit here writing this post, I caught a sudden chill, but that didn’t cause me to turn up the heat; I instead put on a sweater.

There.  I’m doing my part to save the planet…

I coach a kids baseball team every year, and my co-coach and I could not possibly be more different.  I am a quick-spoken, opinionated, capitalistic, real estate agent, and he is a sweet, caring, fruit-of-the-earth, “lawncare professional” who only uses renewable energy.

While I stand in the dugout wearing my “Baseball Is Life” cut-off shirt and cleats, Greg leans carefree against a pole dawning his “Eco-Cut” t-shirt and a pair of worn Birkenstocks.

While I’m telling Billy break up a potential double-play by sliding hard into the second-baseman, Greg is telling the other kids about how wasteful plastic water bottles are and how they aren’t actually recycled.

I think Greg and I are going to differ in our opinions regarding the new Green Energy Act…

Under the proposed Green Energy Act, home owners would be required to provide information regarding the home’s energy efficiency prior to the sale or lease of the property.  Energy efficiency information about the property would have to be determined and provided by standardized methods established by the Provincial government.  The government has not yet provided information on these details.

The legislation, if passed, would allow the Provincial government to prescribe:
-what energy efficiency information has to be provided and in what manner
-the cost of home energy efficiency audits
-the types of residences that these requirements would apply to
-under what circumstances and at what times these requirements would be effective

Let me briefly recap this new government initiative.

Basically, the government intends to enforce home energy audits for all houses involved in purchases or sales.

But what I find dumbfounding is that they aren’t going to force buyers or sellers to improve the efficiency!  They just want the audit performed, and that’s it!

I know that Green is Good, and that it’s cool to care about the earth, but this is a total rouse by Dalton McGuinty and it’s going to cause a world of pain for the real estate industry.

First, let me ask why the onus is going to be on the real estate industry.  We already had the City’s Land Transfer Tax thrown at us this year, as well as the FINTRAC anti-money-laundering responsibilities.

Now we are going to involve buyers and sellers of homes in needless home energy audits?

I’m having trouble collecting my thoughts, so at the risk of letting this turn into a rant, here are my top issues with the new home energy audits:

1. Who Pays?
I can already see the buyer and seller in a transaction arguing about who is going to pay for the home energy audit.  Neither one wants it, so neither one wants to pay for it.  All this does is further complicate the transaction.

2. Conditional Offers
Are ALL agreements going to become conditional on these home energy audits?  Does this mean that a deal can’t become firm and binding until the audit has been completed?  Why should we be at the mercy of the auditors?  Especially when audit itself will contain nothing more than recommendations.  Why hold up the deal?

3. Not Enough Auditors
This is perhaps the biggest issue I see, and it ties in with the point above.  How many “qualified” auditors will the Province employ?  What will the wait-times be like to get an audit performed?  If there aren’t enough auditors, it’s going to slow up the process of selling a house, and give a buyer more time to change his mind.  What if an audit can’t be done for three weeks after an agreement is reached?  The ripple-effect is uncanny!  The sellers will effectively tie up their house and shoo other potential buyers away.  The buyer might be renting and have to hold of on giving his Landlord notice.  Again – why are we at the mercy of the auditors?  Why can’t we go ahead with our transaction?

4. Abatements
If the audit shows that the windows are old, the basement is drafty, and there isn’t enough insulation in the attic, the buyer is going to undoubtedly use this as a bargaining chip to get an abatement.  He’ll ask for $10,000 off the agreed-upon price of the house, and all it’s going to do is cause headaches for buyers and sellers.

5. Leases
The current legislation calls for home energy audits to be done even in the case of leases!  Forget complicating a sale of a property; now we’re going to drag out a simple lease?  What about leasing a basement apartment?  Do “mom & pop” have to conduct a costly energy audit just to get a university student into their $600/month studio apartment?

In addition to the issues I’ve identified above, I also have QUESTIONS!

1. Who Sets The Standard?
Who is in control and what type of standard are they going to set?  Will the rules be different for different types of dwellings, geographic locations, or age of the house?  Toronto is home to many beautiful, historical houses!  Should we cast aside all the 150-year-old Victorian gems that are featured in countless coffee-table-books because they aren’t green enough?

2. Why Are Realtors The Gatekeepers?
I mentioned that Realtors are in charge of the FINTRAC compliance for anti-money-laundering, so why too must we be thrust in the middle of this green frenzy?  Why is it our job?

3. Why Only Houses For SALE?
If the government really wanted to take the green issue seriously, they would require ALL houses to have energy audits, not just those for sale.  It seems to me that they’re throwing the ball in our court (Realtors) by only requiring audits for properties involved in a sale.  What about the old lady that runs her kitchen tap 24/7 because she likes the noise – she’s never selling, so the audit will never be performed on her house and her energy issues will never be identified.

This is a bloody mess.

There are so many issues, and so many questions.

I just don’t have the time to bring them all to the forefront of the debate.

What bothers me the most about this new government initiative, other than the simple fact that they’re linking the energy audits to the real estate industry and complicating matters unnecessarily, is that there is no onus on the buyer or seller to actually do anything more with the audit than file it away in a drawer.

If the energy audit was going to be somehow enforced (ie. monetary fines for not fixing/upgrading issues identified in the report), then perhaps I could see its value.

But without enforcement, why are we doing these at all?

And why the hell are we going to hold up real estate transactions for an energy audit that has no repercussions?

I think this is just an attempt by our Provincial government to stand up and say, “No, no, really – we’re doing something about the issue!  We care about the environment, honest!”

Dalton McGuinty would be better served making brownies for the local bake sale if the proceeds go to renewable energy.

His plan for the home energy audit is like building a road to nowhere, and claiming that he improved transportation.

The plan is poorly-thought-out, overly-complicated, and will do more harm than good.

Let the debate begin!