Austin Energy Audit Amendment Affects Home Sellers

May 17, 2011 by · Leave a Comment 

There has been a BIG change in the Austin Energy Audit and Disclosure Ordinance that requires home sellers to have an energy audit and disclose it to potential buyers. The recently amended ordinance now calls for the Energy Conservation Audit and Disclosure (ECAD) report to be provided to buyers during the option period.   (The option period in a real estate contract is the time period during which buyers have the unrestricted right to terminate the contract for any reason.  Typically, a buyer will have real estate inspections done during this period so that they have the opportunity to negotiate repairs.  If the seller fails to agree to the repairs, the buyer can terminate the contract without losing his earnest money during the option period.) 

The Energy Audit and Disclosure Ordinance that went into effect June 1, 2009 required that sellers have the audit by a licensed energy auditor and disclose the report prior to the sale or transfer of the property.  With the new amendment to this ordinance, sellers will need to be prepared to comply at a much earlier date.  I’ve always believed that by giving buyers all of the information that they need to make a buying decision, they buy more quickly and don’t “discount the property for the unknown”.  With this new amendment, we will encourage our sellers to make the Energy Audit report (ECAD) part of the required Seller Disclosure.  The seller completes the disclosure before we put the house on the market, so this will just be one more step on our pre-marketing agenda.

“The ECAD audit report includes the condition and estimated R-value of the attic insulation, the percentage of air leakage through the duct system, the number of windows with direct sunlight for at least an hour a day, and the energy-efficiency rating of the air-conditioning equipment. It also includes suggestions for improving the home’s energy efficiency.”  By providing this information to the buyer up front as part of the Seller Disclosure,  sellers can make any needed repairs and relieve anxiety that buyers can have about the cost of operating the home. 

 The cost of the audit is calculated by the number of air conditioning units and is pretty affordable, starting around $140 for a single AC unit.  We make the process easy and take steps to protect the seller in the process.  We typically schedule the audit for our sellers with a energy audit company on our approved vendor list.  So that there is never a conflict of interest, we don’t allow the auditor to either make repairs noted in the report or to recommend vendors or contractors.   The auditor should always be a “disinterested third party” and not someone who is going to get additional compensation from the process.  And, we don’t take gift certificates or any other compensation from the auditor either!

If the home is over 10 years old, located in the City of Austin and receives electricity from Austin Energy, then the house with a few exceptions, is subject to the ordinance and must have the audit and disclose the ECAD report during the prescribed sales period.  If the transfer of title occurs as a result of a foreclosure, pre-foreclosure or deed in lieu of foreclosure the property may be exempt.  Similarly, transfers from one family member to another without payment, transfers by court order or probate proceedings or transfer by decree of legal separation or divorce and property settlement agreement incidental to such decrees are also generally exempt. 

Your home may also be exempt if you participated in the Austin Energy Home Performance or Energy Star Program since 2001 or the Austin Energy Free Weatherization Program since 2001.  Check these exemptions out fully and to see how they might apply to you on the Austin Energy website.

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