Manditory Home Energy Audit

The Ontario Real Estate Association (OREA) supports the government’s Home Energy Audit Rebate Program that encourages homeowners to voluntarily assess the energy efficiency of their home. Like all responsible Ontarians, REALTORS® want to see a greener, healthier environment for future generations and we believe energy efficient housing can play an important role in achieving those goals.
Unfortunately, a mandatory system of energy audits, as envisioned under Bill 150, The Green Energy Act, 2009 has a number of serious implications for sellers, low and moderate income Ontarians, seniors, first time home buyers and thousands of other Ontarians who own their own home or business.
OREA’s POSITION

Mandatory home energy audit reports 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. Many middle and low income Ontarians simply cannot afford the cost of financing home energy retrofits.

Those sellers who can afford expensive retrofits will want a premium sale price. As the cost of housing rises, fewer and fewer low and moderate income Ontarians will be able to find affordable housing. Government policy should promote affordable home ownership to low and moderate income Ontarians, not hinder it.

Seniors will also be disadvantaged by mandatory home energy audits. Most Ontario seniors rely on the equity they have built in their homes for retirement. Mandatory home energy audits will force homeowners who are seniors to complete energy retrofits at a tremendous cost to their retirement savings or lower the value of their home in order to compete with newer ones.

Mandatory home energy audits will adversely affect first time home buyers. The majority of homes that will not score well on home energy audits are resale homes. Resale homes, on average, are more affordable for first time homebuyers. If homeowners decide that energy retrofits are necessary in order to sell their home, how will first time home buyers, who statistically have smaller than average down payments, be able to pay the increased sale price?


Ontario REALTORS® agree with the principle of energy efficiency for homes expressed in the Government of Ontario’s proposed mandatory home energy audit, but they say that the additional costs will hurt homeowners, especially in these economic times.

“This mandatory government regulation will impose a significant cost on home sellers. As with most Canadians, we don’t believe in green at any cost,” said Gerry Weir, President of the Ontario Real Estate Association. “It’s not the initial cost of these audits that concerns us,” he said. “Rather, the results of these audits will be used by home buyers as bargaining chips to significantly reduce the final selling price.

“Today’s economic downturn is a terrible time to introduce this measure. Home sellers are already worried about lost equity in their homes. A move like this, which will reduce their value even further, will not help them in any way,” Mr. Weir said.

REALTORS® favour government encouragement of energy efficiency in homes through expanded tax breaks and other measures.

In addition, REALTORS® point out that there is no one standard for energy audits. Different firms arrive at different assessments of the same house. “EnerGuide ratings of an existing home can and do vary between energy auditors, depending on the assumptions they make and the extent of data they collect on the building’s actual construction,” Mr. Weir said.

Furthermore, since there is no regulation of energy auditors, a conflict of interest can arise if a contractor conducts the audit. There is a natural inclination for that contractor to find problems that he can offer to repair for the homeowner.

Many details of the energy audit proposal have not been released. For instance, the government has not said if an energy audit will be required if a property is transferred between family members. Nor have they said how long an energy audit will be recognized as valid. For example, if a homeowner sells within one year of buying a property, will the previous energy audit be recognized?