Mandatory Home Energy Audits Update

A few weeks ago, I wrote this article about new legislation to make home energy audits a mandatory part of the transaction when a property is sold in the province of Ontario. The bill is under review at Queens's Park and some significant changes have been made, although not finalized.

The Standing Committee conducted a clause by clause review of the bill. During that process, the government made several amendments in a number of areas. For example, the mandatory home energy audits will no longer apply to leases or commercial properties and, in fact, will only apply to single family residences. The government also added a provision that allows a buyer to waive their right to receive an energy audit report provided they do so in writing.

Some of the issues they discovered were:

a) The results of an Ipsos Reid poll suggest that energy efficiency is not a very important factor in a purchaser’s decision-making process. Any number of items such as price, location, proximity to public transportation/work and safety of area are vastly more important to consumers than energy efficiency.

b) On average it takes a minimum of four to six weeks to obtain a home energy audit report which will have a negative impact on desired closing dates.

c) Home energy audits will become part of the offer process, thus an area of negotiation between the buyer and seller. As a result, buyers will likely have to bear the cost of the audit and will not be entitled to any rebate. On the surface, it seems to me that it will be a bigger issue in older homes than newer ones.

d) There are also a number of technical issues that will mitigate the use of energy audits. For example, there are no clearly defined energy audit standards. Also, there will be a tremendous shortage of qualified energy auditors and the costs related to energy audits are likely to rise as a result of that shortage.

It looks like the process will continue along, but is obviously going to take some time in its new form.