February 25, 2009
In the wake of a new municipal land-transfer tax and unmoored by a sinking economy, Toronto real estate agents are bracing for a new storm on the legislative horizon: Mandatory energy audits for home sales.
Ontario Minister of Energy and Infrastructure George Smitherman's proposed Green Energy Act, which was introduced to the Ontario legislature Monday, contains loosely defined "mandatory conservation and energy efficiency practices" that would cost home sellers about $300.
But with homes lingering on a stagnating market, and average sale prices dropping throughout the GTA, even the distant possibility of one more fee or one more bureaucratic obstacle, leaves real estate agents feeling seasick.
"It's not so much the dollars that it costs you to do the audit, I think you have to think long-term in terms of how will that impact your property value, what will that do to the market in terms of potential bottlenecks," said Von Palmer, spokesman for the Toronto Real Estate Board. "So the devil's always in the details and I think that's where we need to be careful."
But "the details" remain fuzzy, and the legislation that was introduced Monday does little to explain the logistics of mandatory audits.
A handful of companies throughout the GTA offer energy audits. Their services vary, but generally involve a battery of tests that measure the efficiency of major household appliances as well as the efficacy of a home's insulation.
"There's several other tests, like they calculate the [efficacy] of the insulation, they check the windows and the window stripping, the efficiency of the furnace, the efficiency of the water heater, the toilets, pretty much anything that can have an impact on the overall efficiency of the home and sort of the energy costs and the energy consumption," said Andrew McRae, an energy representative for EnWise Power Solutions.
Homeowners are also eligible for government rebates toward the cost of the inspection, as well as thousands of dollars more toward implementing suggested upgrades. Most energy auditors will also handle the necessary paperwork for a government rebate.
Some homeowners benefit more than others from an energy audit, according to Mr. McRae. Most modern appliances and materials are relatively energy efficient, and the owners of newer homes may struggle to recoup to cost of an audit, he said.
Sales in Toronto have been down every month since the land-transfer tax was implemented in 2008, according to Mr. Palmer. They plummeted more than 23 per cent in the first two weeks of February this year compared to the same period last year, while the average sale price fell nearly 8 per cent, according to data collected by the real estate board.
The 450 inspectors throughout Ontario will quickly become overwhelmed attending to the hundreds of thousands of homes sold within the province every year, and more will have to be trained to meet the demands of mandatory energy audits, Mr. Palmer said.
Additionally, issues such as standardization, timing, and payment will have to be worked out.
"There's going to be some coinciding policies that need to be made as well that would include the specifics around the energy audit," said Amy Tang, a spokesperson for Mr. Smitherman. But what shape those policies would take, Ms. Tang couldn't say
KATE HAMMER
The Globe and Mail
