By Patricia Verge
Patricia Verge is chair of the OREA Government Relations Committee and an Ottawa-area Realtor with Royal LePage Team Realty.
Mandatory home energy audits are once again in the news thanks to a recent report from Gord Miller, the Environmental Commissioner of Ontario. In his report, Mr. Miller asserts that homebuyers are hurt by the lack of energy efficiency information in the marketplace and that mandatory home audits are one solution to this problem.
While his intentions are admirable, Mr. Miller’s conclusions regarding mandatory home energy audits are flawed. Legislating time-of-sale home energy audits will not help consumers. Instead, they will disrupt the nearly 200,000 residential real estate transactions that take place in Ontario every year.
When the provincial government introduced the Green Energy Act (GEA), 2009 it included a section that gave a person making an offer to purchase an interest in real property the right to receive the results of a home energy audit. After the GEA passed in 2010, the government decided not to proclaim the mandatory home energy audit section. OREA agrees with the government’s decision for a number of reasons.
First, mandatory home energy audits will have serious cost implications for home sellers. Those with less than ideal energy audit ratings will face pressure from homebuyers to either spend thousands of dollars to improve the energy rating of their home or lower their sale price. In short, the audit will become a bargaining chip in negotiating the sale price, forcing homeowners to either sacrifice hard earned equity or foot the bill for expensive home energy retrofits.
Second, mandating time-of-sale energy audits will add a cumbersome layer of red tape to real estate transactions. If you were to schedule an energy audit today you could expect wait times of one to three weeks depending on where you live. Homeowners then have to wait another one to two weeks for the results of the audit itself. If auditing was to become a mandatory part of a residential real estate transaction we could expect those wait times to skyrocket, costing consumers time and money. Waiting weeks for an energy audit would completely disrupt the market.
Third, some middle- and low-income Ontarians can’t afford the costs of an audit itself. Home energy audits range in cost from $300 to $500. While the Government of Ontario used to offer a rebate of $150 to do the audit and up to $5,000 for energy-efficiency retrofits, those programs have been cancelled. Now, homeowners are on the hook for the full cost of the audit in addition to any recommended retrofits.
Research has shown that consumers don’t support mandatory home energy audits. According to a 2009 Ipsos Reid survey, 65 per cent of Ontarians opposed mandatory home energy audits while 92 per cent supported voluntary. More recently, a 2011 Ipsos Reid survey revealed that 92 per cent of Ontarians “agree” the government should help homeowners with energy-efficient renovations to their homes.
To that end, the Ontario Real Estate Association (OREA) has been a strong advocate for helping consumers to improve the energy efficiency of their home. During the recent provincial election we aggressively lobbied all political parties to reintroduce the Home Energy Efficiency Retrofit Rebate Program. This joint program between the federal and provincial governments provided up to $10,000 to homeowners to help them improve the energy efficiency of their home. Thanks to this program, over 500,000 homes were audited between 2007 to 2012 and 90 per cent of these homes were retrofitted for improved energy efficiency.
Improving the energy efficiency of Ontario’s housing stock is a goal for Ontario Realtors. However, mandatory home energy audits are not the solution. Like most consumers, OREA believes that a voluntary system of energy auditing combined with incentives to conduct home retrofits is the right way to help homeowners reduce their energy consumption, help the environment and keep the marketplace operating efficiently.
