I've mentioned green issues before, and the fact is that as people become more aware of our impact on the environment, the impact of this on the real estate industry also increases. This is not only through our practices as businesspeople, but in what buyers demand of their property. This in turn impacts on sellers – if you're not offering what the market wants, the chances of selling your house reduce dramatically!
When I last spoke about being green, I mentioned Bernard Salt's prediction that home efficiency audits were likely to become commonplace, much the way they are when it comes to white goods. From a recent article I read about international property, it seems that Canada is getting closer to this reality. Ontario is in the process of passing a couple of pieces of legislation that, if passed, will make home energy audits mandatory for any residential transaction. The bill would require all sellers to have a home energy rating report to provide to prospective owners or tenants for any new buildings starting 1 January, 2010. Full details are still being finalised, but home energy rating reports would cost the seller approximately $300 in new fees.
The response to this has been two sided. Many view the progress on making energy efficiency more of a priority in home ownership a positive thing. However, others feel that this just another unnecessary cost that will be added to the home purchase transaction, and are angered that the bill doesn't apply to commercial sales. When you consider that commercial buildings are often less efficient than the personal home, it's easy to see why. If reducing our impact on the environment is the driver of this legislation, the exclusion of commercial property from the proposed legislation is nonsensical.
While I'm all for the introduction of initiatives that minimize our impact on the environment, there's another area for consideration. When home inspections designed to detect structural and safety issues are not mandatory, the introduction of imposed energy audits seems a little unreasonable – surely the safety of occupants should come first?
Interestingly, the Ontario Real Estate Association has publicly stated their opposition to the new legislation, and there seems to be a fear that values will decline if they rate poorly in auditing. In reality, there are very few highly-rated homes on the market presently and the introduction of energy audits will have more of an effect in several years time. As real estate agents, it is our responsibility to help people make informed decisions about their property purchase and new legislation such as this provides the industry with an additional tool to do so. It will be interesting to watch the story unfold, and to see how quickly Australia adopts a similar strategy.