Portland home-sellers should disclose house vitality rating below new metropolis mandate
A requirement that Portlanders selling their homes be required to disclose the results of a household energy audit went into effect this week, despite appearing to have started unevenly.
The requirement, approved by Portland City Council in 2016, is intended to give buyers a better idea of their maintenance costs over the long term. It is based on programs in cities like Austin, Texas; Berkley, California; and Boulder, Colorado.
Many homeowners are required to have their homes rated on a scale from 1 to 10 and to disclose the estimated annual energy use and cost before they are placed on the market. (The policy applies to single-family homes and any residential unit that takes up all of the space from the foundation to the roof, such as townhouses and certain condos.)
This information must be disclosed in listings and the test results must be made available at the open house and during personal demonstrations. The city may exempt certain low-income households, as well as households in foreclosure or other financial distress.
The disclosure obligation began slowly after it came into force on Monday. Many new online offers within the city limits lacked the Home Energy Score. (Homes that were on the market before Jan 1st did not have to get a score.)
Andria Jacob, senior manager of energy programs at the Portland Bureau of Planning and Sustainability, said the city will monitor new listings and contact brokers if their listings are not disclosed.
“We expect it to take a little time,” she said. “Our plan is not to come out immediately with a heavy stick.” The ordinance provides for fines of up to $ 500.
The 10 point rating system was developed by the US Department of Energy, with a score of 5 representing the average US home. It is estimated that a house with a 1 uses more energy than 85 percent of houses each year, while a house with a 10 uses less energy than 90 percent of houses.
Ratings are based on the size of a house, its heating and cooling systems, and its insulation characteristics.
The city has signed a contract with Earth Advantage, a Portland nonprofit, to oversee the program. The results are determined by Earth Advantage certified energy auditors. Many are house inspectors while others are connected to contractors who retrofit energy.
The Portland Metropolitan Association of Realtors rejected the move, arguing it would add to a seller’s costs without significantly changing buyer behavior. Real estate agents disagree on this, however.
“Of course, it will be a negotiation chip that will help certain people make a decision,” said Annie Rose Shapero, a broker at Oregon First Realty. “But it will also help people who are more financially vulnerable to make a decision that is likely to give them the greatest certainty about their future utility bills.”
And while homeowners have always considered the potential resale perks of installing new hardwood floors or upgrading appliances, the ROI on energy efficiency improvements has never been very clear as they are rarely on listings. A required assessment could change this.
“We’re helping change the conversation,” said Hilary Bourasa, principal broker at Meadows Group Inc. Realtors. “It takes the focus off granite countertops and stainless steel appliances and emphasizes the affordability of living space.”
In the few days since the program went into effect, some real estate agents have complained that the scores are low or that information is inaccurate.
Mark Wheeler, the owner of Roots Realty in southeast Portland, said an energy audit audit of a customer’s home did not include a high-powered furnace. Customers are selling because they can no longer afford the home, he said, and the prospect of spending more money or losing potential buyers is an added stress.
“If my customers had spent $ 250 on an actual home energy upgrade, I would feel good about it,” he said. “But they spent $ 250 on a bad piece of paper.”
Jacob, the city’s energy programs manager, said Energy Trust will review 5 percent of closed energy readings to make sure they are correct.
– Elliot Njus