UPDATE: Just this past week the California Association of Realtors announced that the effective lobbying effort by thousands of Realtors has forced the author of Assembly Bill 2678 to remove the requirement that would have homes and commercial property undergo an energy audit before escrow could close.

CAR further stated that they appreciate the goal of energy conservation, however this bill which could have required mandatory retrofits and upgrades had the potential to add increased costs to every transaction, further weakening the housing market.

Great job to CAR and to all of the people who expressed their dissatisfaction. It’s good to know that your Pasadena real estate will not encumbered by increased rules and regulations

The California Residential Purchase Agreement states that “the property is sold in its present physical condition, as of the date of acceptance, subject to Buyer’s investigation rights” or what others commonly refer to “AS IS”

As a real estate broker, I have a tremendous amount of respect for the California Association of Realtors or CAR. They maintain a wealth of information for their members and provide excellent consultation on the Legal Hotline when we have a question. They also keep us updated on the proceedings in Sacramento when a bill is before the State Assembly that could produce negative consequences on our industry should it be passed into law.

This is a copy of the email I received on Thursday, May 29:

“AB 2678 (Núñez) was passed by the Assembly on a 44-33 vote on Wednesday. The bill needed 41 votes to pass. AB 2678 would require, among other things, that ALL homes and commercial property in California have an energy audit at point-of-sale, and that mandatory energy efficiency investments be made. While C.A.R. appreciates the goal of energy conservation, C.A.R. strongly opposes the point-of-sale requirements in AB 2678 because they are not necessary to achieve the bill’s objectives and such mandates will weaken the housing market. If enacted, AB 2678 could add thousands of dollars to the cost of purchasing a home, including up to $400 just to have the home audited. AB 2678 will next be considered by the state Senate. Stay tuned for a Red Alert on the bill”.

Increased Closing Costs?

I interpret this legislation to mean that before you can sell your home/property, you may have to pay for an energy audit and based upon the results of these findings there may be increased costs involved in retrofitting or repairing your property to meet these new tougher guidelines.

My personal opinion is that this is bad legislation and from the close vote, it appears that many others share my feelings. An energy audit in Southern California, where we have some of the most desirable climate just doesn’t compute. Are we going to tell a homeowner that they need to weather-strip their windows because on a 78 degree day, a breeze could blow through the crack? An energy inspection should be the responsibility of the buyer if elected, to be performed during their due diligence process. Furthermore, my belief is that increased requirements upon property owners tends to chisel away at the bundle of rights we are entitled to, and I have to believe our founding fathers would agree. Lastly, since energy costs are becoming more and more expensive, many homeowners have taken it upon themselves to make their homes more efficient and a $400 mandated energy audit is an unnecessary expense.

It’s time we call our local representatives and tell Sacramento to leave things “AS IS”.

Next week we will examine the requirements involved with Pasadena real estate including its city occupancy and sidewalk ordinances.

Tags: AB2678, real estate closing costs, Selling Your Home