PORTLAND’S NEW REQUIRED ENERGY AUDIT FOR SELLERS IN PORTLAND STARTING JANUARY 1, 2018
If you live in Portland, and are thinking of selling in 2018. This is information you need to know. Below is information regarding the City of Portland’s energy audit mandate. THIS IS REQUIRED IF YOU SELLER AFTER 1-1-18 in PORTLAND
On January 1st, 2018, a new rule will go into effect requiring sellers of homes within the Portland city limits to:
Obtain a home energy performance report, including a home energy score, from a licensed home energy assessor.
Provide a copy of the home energy performance report to all licensed real estate agents working on the seller’s behalf.
Include the home energy score and the attached home energy performance report in any real estate listings.
Provide a copy of the home energy performance report to prospective buyers who visit the home while it is on the market.
Provide a copy of the home energy performance report to the City of Portland for quality assurance and policy compliance. The energy efficiency industry has developed scores and labels for building energy performance, but their use has not been widespread. Requiring home energy scores is one of the policy tools the City has available to catalyze change in the residential sector. Energy Trust of Oregon, in partnership with non-profit lender Craft3, now offers a moderate income energy upgrade financing program. There are also new specialized energy efficiency mortgage products available exclusively to buyers of homes that have a U.S. Department of Energy Home Energy Score.
Does this policy affect housing affordability?
In today’s market, it costs between $150-$250 to obtain a home energy performance report. The policy does not require upgrades. According to Home Mortgage Disclosure Act data for Multnomah County, the majority of people transacting in the real estate market – almost 80 percent – are not low income. In many instances, these buyers are paying a premium for Portland homes. The modest cost of acquiring the score will be a very small line item in the total transaction. The City is working on solutions to cover the cost of the home energy report for low income-qualified sellers.
An information policy requirement like home energy scoring will not constrain the supply of affordable housing. Housing affordability is primarily a function of supply and demand. The City currently faces a shortage of housing options, especially affordable housing, and is helping to increase supply through zoning and direct investment in affordable housing. The requirement, however, will help those buyers understand the full costs of home ownership, including energy cost?
What is a “home energy performance report”?
A home energy performance report is defined in Oregon Revised Statutes 469.703 and 469.040 and in Oregon Administrative Rule OAR 330-063-0000, and includes the following information:
A score and an explanation of the score.
An estimate of the total annual energy used in the home, by fuel type.
An estimate of the total monthly or annual cost of energy purchased for use in the home, in dollars, by fuel type.
The current average annual utility retail energy price, by fuel type.
Is the City proposing any exemptions, waivers or deferrals to the policy?
Yes. There are a limited number of circumstances in which the home energy score policy does not apply. These exemptions are listed below. Note that if a sale is transacted without ever going on the market publicly, the home energy score requirement is not triggered.
General Exemptions
A foreclosure sale.
A trustee’s sale.
A deed-in-lieu of foreclosure sale.
Pre-foreclosure sale in which seller has reached an agreement with the mortgage holder to sell the property for an amount less than the amount owed on the mortgage.
The property qualifies for sale at public auction or acquisition by a public agency due to arrears for property taxes.
A court appointed receiver is in control of the asset due to financial distress.
The senior mortgage is subject to a notice of default.
The covered building has been approved for participation in Oregon Property Tax Deferral for Disabled and Senior Citizens.
Equivalent program as determined by the Director.
Low-Income Exemptions
Low-income sellers may be exempt from compliance with the home energy score policy. Sellers may qualify for an exemption if any one of the following apply:
Demonstrated household income is at or below 60 percent of median household income for the Portland-Vancouver-Hillsboro, OR-WA Metropolitan Statistical Area.
Low income seller is approved for participation in Oregon Low-Income Home Energy Assistance Program.
Low income seller is approved for participation in Free and Reduced Price Meals through Oregon Department of Education.
The responsible party is otherwise unable to meet the obligations as determined by the Director.
As the implementation date for the policy gets closer, BPS will post further information here about the steps for obtaining an exemption. BPS intends to make this a quick and easy notification process that will
What is a “home energy performance report”?
A home energy performance report is defined in Oregon Revised Statutes 469.703 and 469.040 and in Oregon Administrative Rule OAR 330-063-0000, and includes the following information:
A score and an explanation of the score.
An estimate of the total annual energy used in the home, by fuel type.
An estimate of the total monthly or annual cost of energy purchased for use in the home, in dollars, by fuel type.
The current average annual utility retail energy price, by fuel type. The City will spot-check a variety of listing services, including RMLS, Craigslist, home sales apps like Zillow, Trulia and Redfin. We will cross-reference this information with the City’s public database of disclosed scores and County Assessor records. The City intends to monitor and evaluate the policy’s performance within 30 months of the effective date of the policy. The evaluation will include but is not limited to accuracy of disclosed information, rates of compliance, other program impacts and recommendations for ongoing review. If evaluation suggests widespread lack of compliance, then the penalties may come into fuller effect. The proposed effective date for the policy is January 1, 2018. Rulemaking is proposed to begin in July, 2017.ADUs that are part of the primary residence will automatically be captured in the home performance energy assessment, which is based on all the rooms within the outer envelope of the home. Detached ADUs will not be covered by the policy. The policy would apply to all single-family homes sold within Portland city limits. The City of Portland will receive the home energy performance report from the seller and will make the information available to the general public through Portland Maps. As of July 2016, the market rate cost to obtain a home energy performance report is between $150-$250. This is the cost of having a trained, certified home energy assessor conduct a 45-minute, in-home assessment and generate the report based on the data gathered from the home visit. The information obtained through a home energy assessment goes beyond a typical home inspection, including a review of the home’s mechanical systems, insulation, air sealing and opportunities for cost-effective energy efficiency upgrades. Sellers pay a private-sector home energy assessor for the cost of the home energy performance report, not the City. Home energy scores are a market-based solution for making home energy performance more transparent in the home buying process.
What software tools will be eligible to produce a score in Portland? The U.S. Department of Energy’s Home Energy Score tool supplies the energy data as required by HB 2801 for a home energy performance report. The report includes a score that is a number on a scale from one to ten, where ten represents a more energy-efficient home and five is the performance of the average home. This number provides an easy-to-understand reference point for the comparison of energy performance between single-family homes.
Like miles-per-gallon labels for cars, the Home Energy Score is an asset rating, which is based on how the home is built, not how the home is used. An asset rating considers the structural characteristics and large equipment in a building. Asset ratings rely on a home energy assessment, which includes an on-site inspection. Asset ratings provide the homeowner and perspective buyers with the ability to identify:
The City will align with tools and software that are compliant with Oregon House Bill 2801, which became law in 2013 and gives authority to the Oregon Department of Energy (ODOE) to approve home energy scoring tools in Oregon. The City will provide temporary waivers to homebuilders using software tools that do not meet the Oregon standard, including new homes with Energy Trust of Oregon Energy Performance Scores (EPS) or Home Energy Rating System (HERS).
Experience from Austin, Texas suggests that as the volume of home energy assessments increases, the retail cost of the assessment declines. The cost of a home energy performance assessment in Austin is currently stable at $125.
When will the policy take effect?
The City does not intend to impose penalties for non-compliance initially. However, the draft code language includes a provision that allows the Director to assess a civil penalty of up to $500 after 90 days of non-compliance and another $500 for every 180 days out of compliance thereafter.
Thank you Oregon first for your article and good information. For the entire article please call me and I’ll send you a link. If you would like more information, please call, email, or text me anytime.
Five Star award recipient 2011-2017 honoring the top 7% of real estate professionals in Oregon.
IT’S A GOOD LIFE!!
Rachel Sheller, Principal Broker, Realtor, CRS, ABR, GRI, SRES, MASTERS CIRCLE
Diversity Specialist, HOWNW, CSA-Certified Staging Agent
Oregon First, Realtors, Direct 503.380.9634, Email- homesforyou@frontier.com
View ALL available Houses on the market visit my website
Licensed in the State of Oregon
***I’M NEVER TOO BUSY FOR YOU AND YOUR REFERRALS***