Earth Day and The Green Energy Act: When the Best of Good Intentions Go Wrong.

istock_000008707237xsmall“Be careful what you wish for…”

Over the past years, organized Real Estate in Ontario has been lobbying the Government to support energy audits and grant programs that would encourage Canadians to voluntarily increase the energy efficiency of their homes.

Now along comes Bill 150: the Green Energy Act, and instead of the REALTOR Community jumping up and down and supporting the ACT, The Ontario Real Estate Association is bringing up some serious concerns. The Bill, as written, requires MANDATORY Energy Audits at the time of sale of residential properties only and putting the audit in the Agreement of Purchase and Sale. It excludes both Commercial and Industrial properties.

Here are some of my concerns:

  1. Whenever I hear MANDATORY as part of a program, I get concerned that it acts as a challenge to circumvention and “creativity”.
  2. If the Government is serious why would it focus on less than the 10% of Ontario Housing that is bought or sold every year. Why not pick a date in time, say 2015, that all homes in Ontario have to be audited? What of the home next door to you that they has been in the ame family 30 years and is not subject to an audit?
  3. If the audit becomes part of the Agreement of Purchase and Sale, then there is a whole other level to the negotiations. What if the Buyer’s audit shows something different than the Seller’s audit? If there is work to be done, does it have to be done before closing? Does the audit now set the value of the home?
  4. Why would Commercial and Industrial properties be excluded? Do those properties not have to meet energy-efficiency standards?
  5. It is already adventageous for Sellers to install energy efficient elements as a feature of the property and increasing energy efficiency is often one of the first things that new Buyers do with the available programs from the Province. What is next? Does the Government now mandate that every car in Ontario must be a Hybrid?
  6. Who sets the Green Certification? Is it LEED, EnergyStar, Build America or BGNM?
  7. The Municipal Property Assessment Corporation is often under public scrutiny because its’ files are viewed to be out-of-date by taxpayers due to lack of proper inspection. How will a new agency created under the Act deal with deficiencies and corrections to your property as new work gets done?
  8. How will all these auditors be trained and who will regulate them, updating their knowledge and keeping an industry standard?

My Suggestions:

  1. Take the Energy Audit out of the sales transaction and make it across the Province and include all types of property.
  2. Mandate who sets the standards, like CSA-the Canadian Standards Association. Right now there seems to be confusion.
  3. Create more grants for homeowners so that voluntary updates are further encouraged.
  4. Add to the present education for consumers about GREEN initiatives, providing more leadership.

Please know that the Ontario Real Estate Association has problems with the application of the Bill and not it’s goals, as I do. Feel free to leave your comments below and Happy Earth Day!

Here is the latest Press Release from the Ontario Real Estate Association.

Related Posts:

CREA’s Position on Mandatory Home Energy Audits

Province of Ontario’s Bill 150: the Green Energy Act

Ontario’s Green Energy Act to Mandate Energy Audits!!

Cabbagetown: Laurier Avenue Goes Green

For Real Estate, This Year’s Colour is “GREEN”.

6 Responses

  1. anne Briscoe

    Richard as always you are right on target. It makes no sense to have mandatory audits only on properties that are to be sold. If this is the right thing to do it should cover all properties including commercial etc. You make more sense than the Ontario Government on this issue. Maybe it is time for you to become a provincial politician. Regards, Anne

  2. Barry Lebow

    Richard, I agree with your points, they are excellent in presentation and have been thought out but I have another concern. Having witnessed the ineptness of the home inspection industry, where few shine and the others are hacks, I must wonder, who is going to undertake these audits? I am concerned about the human element, the subjective observations and I just envision a whole new corps of government people in charge of yet another program. Heck, they can’t get assessments correct and they have massive computer programs and years of experience, because their human element is poor. Frank Lloyd Wright is supposed to have said, “amongst the rules and regulations I find my freedom.” Trouble is, Frank Lloyd Wright never worked in Ontario.

  3. Bill Johnston

    Hi Richard,
    I seem to recall that members of our real estate brokerage profession predicted that the sky would fall when property inspection conditions started cropping up in the early 1980s. We flawed creatures called human beings always seem to reject new ideas at the outset, and later define them as “common sense” if in fact they are reasonable. Some of OREA’s points are valid (e.g. inconsistencies appear to exist in audits on the same property), while others smack of fear-mongering.
    Energy audits are a disclosure issue. Sellers and buyers should be concerned about the “running” costs of their homes. While I oppose government mandates, we as a profession should encourage energy audit reports as an important part of the information package for any property hitting the market. Having said that, I note that a majority of our members don’t even bother to get the square footage of their listings by hiring Planit or one of the other companies.
    Our members complain of being rated on a par with lawyers and politicians in terms of credibility by the general public. That will change only if we demonstrate professionalism through our actions. In that regard, encouraging members to learn about and promote “green” issues, including voluntary energy audits, would be productive.
    Thanks for creating this forum!
    Best Wishes,
    Bill

  4. Richard Silver Post author

    As you know Bill, I support the movement but always have worries about Mandatory issues and that it is part of the Agreement of Purchase and Sale. If those two changes are made, then I am on the bandwagon!

    PS. Property Inspections were never and are still not mandated by the Government. Neither are Seller Property Information forms though the Real Estate Industry has encouraged it. That being the case is the Government not putting “the cart in front of the horse”.

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