Austin "Point of Sale" Energy Audit FAQ
If you own an Austin home, are considering buying one, or are in the Austin Texas real estate business, and are not aware of the City of Austin's new energy audit ordinance, you need to be. Why? It will affect the way real estate is sold in Austin, will add to the cost of selling homes here, and creates more government to oversee this effort. 
It also will have the positive benefits of helping homes be more energy efficient, saving present and future owners some real dollars in utility costs, and keeping the City from having to invest as much in more power plants or other sources of electricity. 
I attended a class last week on the energy audit requirement. Some of my questions were answered, but others were raised. I decided to do some study of the topic on my own and post some information and links that hopefully will be helpful to sellers, buyers and Realtors. Here are some questions and answers about the energy audit requirement (for all the details, please read the ordinance, adopted 11/6/08):
When does the new energy audit law take affect? On June 1, 2009.
Does the requirement of an energy audit affect the sale of all homes? No.
The requirement applies to homes within the Austin city limits that receive their electricity from Austin Energy. Energy audits are not required for homes in the Austin city limits which have Pedernales Electric Coop, for example, as their supplier. No audit is needed for homes in areas that are not part of the City of Austin, like Rollingwood, West Lake Hills, Shady Hollow, and Sunset Valley. It seems to be wise for a seller who owns a home that is not covered by the ordinance to have the audit done anyway.
A home is exempted from the energy audit requirement if it is less than 10 years old at the time of sale, or if the home has previously participated in one of the City's energy efficiency programs. The buyer can also agree to participate in one of these programs within 6 months following the time of sale. Other exemptions include properties being sold as foreclosures or by trustees, short sales in which the seller has previously reached an agreement with the lender to sell for less than is owed, and properties transferred by court order or divorce. See the ordinance for more details.
The City may also grant variances from the code requirements. These potential variances include sales in which the property will be demolished or substantially remodeled, and cases where the requirement would impose undue hardship on the owner of the property. See the ordinance for details.
Who will perform the audits? The energy audit must be conducted by a trained and certified auditor who is registered with Austin Energy. A list of these auditors is not currently available on the Austin Energy website, but will be posted prior to the start of the program. A person licensed as a home inspector may be trained to do the energy audits also. The two jobs (home inspection and energy audit) are not the same.
Must the results of the audit be disclosed? Yes. When?
The results of the energy audit must be disclosed to potential buyers "before the time of sale." Time of Sale is defined in the ordinance as "the date of the recording of a deed transferring legal title to real prooperty to implement the sale of a property."
The City formed a Task Force of 28 community leaders and professionals to help in the drafting of this new ordinance. The
final report of the Task Force (dated 9/17/08) recommended
"that the City of Austin require that a Seller of a non-exempt home disclose to a prospective buyer the results of an energy audit of the home at the same time that the Seller makes other disclosures required under Texas law." This recommendation is not referenced in the ordinance. It references just the "time of sale" as the time that disclosure must be made.
The ordinance language seems to make it possible for the disclosure of energy audit results to be made between closing and the filing of the deed. The audit itself would have to be done before closing to insure that the seller could meet this requirement. It seems best, however, for sellers to have this audit done early in the selling process, even before the home is put on the market, so that improvements might be made and potential buyers might learn the results.
The auditor must file a copy of the energy audit with the City within 30 days of the audit. The City will keep a database of homes that have met the requirement.
What will the energy audit cost? The cost of the audit, to be borne by the seller, is not set in the ordinance. The estimate given in the class I attended was $300-$600. The variation depended on the size of the house and the number of A/C systems in it. The largest portion of the cost is pressure testing the home's duct system to locate air leaks into the attic.
What is the focus of the energy audit? The focus is to be on helping homeowners to find ways to improve the energy efficiency of their homes. Items that are known to be the worst energy wasters include A/C system duct leaks, attic insulation, windows that receive at least 1 hour of direct sunlight daily, and weather stripping around exterior doors, for example. This statement is from Austin Energy's April 2009 PowerPlus newsletter: "An average 25-year-old home that has never had energy efficiency upgrades has an air conditioner that uses almost twice the power of new models, needs 6-8 inches of additional attic insulation and has duct work that is leaking on average about 30% of cooling into the attic." The audit report will address what can be done to make the home more energy efficient.
How often must the energy audit be redone? After the initial audit, the home meets the requirement of the ordinance for 10 years. No further audits would be required if the home is sold again within that 10-year period.
Are energy efficiency upgrades mandated by the ordinance? No. The energy audit is requied for homes without an approved cariance or an exemption. Efficiency upgrades are voluntary.
The Task Force recommended in its final report that the City adopt a target that 25% non-exempt single-family homes sold in the first year of the program would perform some or all of the identified upgrades. This target would increase to 85% in the fourth year. The Task Force estimated that 4,000 of the 10,000 homes sold in Austin in 2007 likely needed energy efficiency upgrades.
After the second year of the program, a report detailing progress would be made by the City Manager to the City Council.
Initially the ordinance would have made it mandatory for all owners of non-exempt homes to perform Cost Effective Upgrades within a year after sale if the yearly targets are not met for two consecutive years. The Task Force voted against this provision in its final report. After the first two years, the City may revisit the idea of making upgrades mandatory.
Potential buyers may choose a home in which potential upgrades have been identified and made over a home in which there are deficiencies that should or could be corrected.
What if I have my home on the market before June 1, 2009? Any home without a variance or exemption that is sold after the ordinance takes effect must have the energy audit performed.
What if I choose not to get the energy audit done? The ordinance as adopted makes failure to have the audit done a criminal offense (!) that carries a fine of up to $500, or more in the case of "criminal negligence."
Is there any help available for sellers or buyers who implement energy efficiency upgrades? Yes. There are a number of
rebate, tax credit and loan programs available through Austin Energy, Texas Gas Service, and the federal government. Participation in these programs will reduce the owner's out-of-pocket expense for these upgrades.
Is there any alternative to the energy audit? At least one company (Strand Brothers) offers home sellers a free, pre-sale energy audit and report (no duct leakage test included). If homeowners do enough upgrades to meet the minimum guidelines before the home is sold, they are provided a certificate for display and would not need the City of Austin energy audit.
Jim Gilbert, Realtor. Heart of Austin Homes
Licensed to sell real estate in Austin and in the State of Texas
