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REALTORS® sponsor bill to ensure government energy efficiency requirements cover their costs

Wednesday, February 22, 2012

Energy efficiency is becoming the "way of the future" to reduce business operating expenses, cut fuel import bills, and to boost jobs and household incomes. While the state and local governments are encouraging households and businesses to adopt this goal, REALTORS® want to make sure energy efficiency mandates are not adopted at the expense of home buyers.

In a continuing effort to reduce consumer costs associated with purchasing a home, the California Association of REALTORS® announced in February that it is sponsoring California Assembly Bill 1711, which will clearly define what constitutes an energy efficiency retrofit that would "unreasonably or unnecessarily" affect a home purchase. This bill is being introduced to address the burdensome retrofit standards being written by the California Energy Commission (CEC).

AB 758 (Skinner), which became law in 2009, requires the CEC to pursue energy conservation in a way that does not "unreasonably or unnecessarily" affect the real estate sales process. The legislation prohibits any required energy efficiency retrofits from unreasonably or unnecessarily affecting the home purchase process.  However, the lack of a clear definition of "unreasonably or unnecessarily" fails to provide sensible limits on the programs that can be imposed on home buyers by the CEC, according to REALTORS®.

The CEC considers point of sale audit and retrofit requirements reasonable and necessary and is currently evaluating implementation strategies focusing on programs requiring installation of energy saving improvements at the time a home is purchased. Such programs, for example, can require home purchasers to pay for improvements that will never pay for themselves over the lifetime of the improvement. Additionally, the CEC is considering requirements that could add thousands of dollars to the up-front cost of a home.

REALTORS® are concerned these requirements will place a significant financial burden on home buyers. "The Silicon Valley Association of REALTORS® supports AB 1711. Energy efficiency is important to homeowners, but should not be required unnecessarily or unreasonably. Requiring buyers to pay for unnecessary and potentially expensive energy saving improvements will increase the cost of homes and can delay the closing of a transaction," said Suzanne Yost, president of the local trade association.

Assembly Bill 1711 (Galgiani, D-Tracy) will prohibit the state from creating a program that requires home buyers to pay out of pocket for energy improvements at the time a home is purchased or that would prevent a home buyer from closing escrow on time. The measure also requires that the costs of mandated improvements be recoverable over the lifetime of the improvement.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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