Ontario’s green revolution

Green Real Estate Jan 12, 2010

By Elden Freeman

With the Copenhagen Climate Change Conference behind us, it seems like every front page is still devoting most of its real estate to environmental concerns: battles in the U.S. Senate over the Waxman-Markey bill; CO2 reduction targets for various countries; emissions restrictions on the automotive industry. In Canada, events are moving at a fast pace to match. In May, Ontario passed the landmark Ontario Green Energy Act, and in October some key components of that act, regarding electrical utilities, came into force. For real estate professionals in Ontario the other shoe is still yet to drop.

With the passing of the act, Ontario has leapt to the front of North American jurisdictions in its regulation of energy and energy efficiency. In addition to an internal governmental review of energy policies and commitments to infrastructure upgrades, the bill also will make it mandatory for real estate vendors to make available information regarding the energy consumption and efficiency of listed properties. This will have the greatest immediate impact on real estate professionals, adding a new legal obligation to the sale of every piece of real estate in Ontario.

Currently, the entire act has been proclaimed into law except for the real estate energy efficiency disclosure obligation. When it does come into effect, what was previously a value-adding process that provided useful information about a given property’s energy costs and efficiency will be a mandatory legal obligation. It will require all agents to become aware and informed of what this information comprises. Representatives of sellers will be obligated to provide access to this information unless otherwise explicitly specified in writing by buyers.

Agents looking to fulfill their legal obligations and enable their clients to maximize their rights and avoid liability first need to acquaint themselves with who can deliver this information. Home energy audits are currently offered by a number of businesses certified by Natural Resources Canada’s Office of Energy Efficiency. The NRCan website lists certified auditors by region.

The auditing process involves testing a home’s insulation, water usage and energy usage. The resulting score is intended to let prospective buyers know the energy costs of owning a given property. Better scores can be obtained by implementing a variety of fixes, some as simple as retrofitting low-flow fixtures in kitchens and bathrooms, and improving insulation around windows. There are incentives at the municipal, provincial, and national level to assist homeowners.

Home energy audits also allow agents to give their clients assurance about utility costs. This has additional value when considered alongside another section of the act, which aims to encourage green energy sources by way of a Feed-In Tariff. While this stimulus of Ontario’s green energy sector is good for the economy and environment in the long run, in the short term it will result in an increase in energy prices. This is in addition to any fluctuations in energy prices to which ratepayers are already vulnerable.

The information about a property’s strengths and weaknesses and areas where costs can be reduced by implementing efficiency-increasing solutions becomes even more valuable in this light.

The National Association of Green Agents and Brokers already provides its members with exclusive pricing and access to home energy audits. In addition, NAGAB is running a course on the ins and outs of how the Ontario Green Energy Act will impact residential and commercial agents and brokers. For more information about green real estate practices in Ontario and Canada, and to sign up for a course that explores the Ontario Green Energy Act and its implications for real estate professionals, visit www.nagab.org.

Elden Freeman  B.A., M.E.S, Broker is the founder and executive director of the non-profit National Association of Green Agents and Brokers (NAGAB). (416) 536-7325; elden@nagab.org.