×
Your C.A.R.
Industry 360°
Transaction Center
Learn & Thrive

C.A.R. Board of Directors and Committees

The main Business Meetings page includes important links for Directors and Committee Members.

Current Meeting Materials Tentative Program Committee Selection Summary of Action Items Meeting Registration
REALTOR® EXPO

CALIFORNIA REALTOR® EXPO, the state's largest real estate trade show.


Mid-Year Luncheon

Attend the special luncheon event with C.A.R.'s CEO Joel Singer to find out what's next for the real estate market.


NAR Meetings

NAR meeting information and materials.


License Renewal

Easily renew your real estate license with the FREE 45 hour online license renewal package from C.A.R.


Pre-License Training

Prepare to earn your real estate license with our online courses


Career Path

Build and drive success for your real estate business with the training you need for continuous improvement


Designations / Certifications

Distinguish yourself by learning how to build a business that specializes in niche markets to nearly double your earning potential in various real estate sectors


Education Calendar

Browse our class schedule to find when and where to take real estate courses.


Course Catalog

Get the description you need to learn more about our many courses offered.  To find courses by career path, please visit our Career Path page.


NMLS/MLO CE Courses

Complete your eight-hour NMLS license renewal requirement through our NMLS-approved provider, OnlineEd


Thought Leadership

This program represents our ongoing commitment to enhancing the professionalism of all our members.


Speeches & Presentations

Speeches & Presentations from C.A.R. Business Meetings and other Events


Multimedia Library

From webinars to videos and podcasts to blogs, C.A.R. keeps you in the know.

Housing Matters Blog Slideshows Videos
Publications

C.A.R. publishes eight magazine issues and various newsletters throughout the year.

Newsletters California Real Estate Magazine
Webinars

Webinars focusing on the critical issues that impact REALTORS®, their clients, and the real estate industry.

California Housing Market Webinars Finance Helpline Webinars Legal Webinars Upcoming Webinars
For Your Clients

A one-stop shop for tools and and resources to educate consumers about the intracacies of buying and selling a home and how a REALTOR® can help.

ClientDIRECT® Infographics
Charts & Graphs

Explore and interact with the latest market statistics.

County Market Updates Market @ A Glance Market Snapshot
Digital Tools

Marketing tools from C.A.R.'s consumer advertising campaign

CARmojis Legal Hotline App REALTOR® RealTalk REALTOR® ReelMaker
Social Media Content

See the latest social media content from C.A.R. and find content for you to share on your own social media.

Featured Share of the Week Success with Social Media
Top Searches
CLOSE

Email Article
Lock icon
The page you are sharing is not public and requires a car.org account to view.
Send Email
What is this?
Add a quick link to this page from the Homepage when you are signed in
Share Article

Transaction and Regulatory Committee

January 3, 2013

The following is for study and has NOT been approved by the Board of Directors.

The Question:  Should C.A.R. OPPOSE Legislative or Regulatory Point-of-Sale requirements that delay transactions or impose unrecoverable costs? 

Action:  Optional

Position:
1) Oppose Point-of-Sale Legislative or Regulatory requirements that delay transactions or impose unrecoverable costs
2) Do nothing; use a case-by-case point-of-sale policy analysis
3) Other

Discussion:
Recent Developments in Energy Efficiency Policy
The California Energy Commission (CEC) is currently evaluating multiple implementation strategies for existing homes. They include energy efficiency ratings, disclosures and retrofits using a variety of trigger events, including both voluntary and mandatory point-of-sale requirements. These mechanisms cannot "unreasonably or unnecessarily affect the home purchasing process," (amendments obtained by C.A.R.) as required by AB 758 (Skinner/Bass, enacted 2009). By implementing a comprehensive energy efficiency program for residential and nonresidential buildings, the CEC hopes to achieve greater energy efficiency in existing structures, especially "energy hogs" that fall significantly below the levels required for new construction.

The CEC is in the early regulatory development phase. Last fall (2012), the CEC released its Scoping Report, which is the first of two documents that is to serve as a roadmap for achieving energy efficiency in existing buildings. They plan to release a second document called the "Action Plan" in early 2013.

Should C.A.R. adopt a general point-of-sale policy that can be applied broadly to legislative and regulatory proposals?

C.A.R.'s Point-of-Sale Policy Development
C.A.R. began developing its point-of-sale policy almost 25 years ago. This policy has been created on case-by-case basis to address a variety of threats and been forced to evolve and change over the last two decades. Proponents of point-of-sale enforcement mechanisms have changed their approaches over the years to respond to C.A.R.'s opposition, however, this has created a policy within C.A.R. that is fragmented and based on the compilation of motions taken in response to numerous legislative proposals.

In recent years the association has increasingly been confronted with point-of-sale proposals in a variety of forms, and C.A.R. staff is generally clear on the association's position on this issue (Recent examples point-of-sale legislation on: smoke detectors, CO detectors, water heater strapping, water conservation devices, etc.).  Is it appropriate to consider adopting a clear and comprehensive point-of-sale policy?

C.A.R.'s Existing Policy
Based on past policy positions adopted by the Board of Directors, C.A.R. supports both voluntary and community-wide comprehensive mandatory approaches to achieve energy efficiency conservation in existing structures. Such a strategy is the opposite of a point-of-sale approach. Comprehensive community wide approaches could include mandating improvements at a specific trigger point during the home's life cycle, including: requiring property owners to obtain an energy audit or make improvements based on the age of the home or on a periodic community by community staggered approach.

C.A.R. has generally been neutral on "date certain" requirements (even when they require disclosure at sale), and has adopted policy on a case-by-case basis to oppose point-of-sale requirements that would burden or delay the close of escrow. C.A.R. would oppose, based on prior positions, any proposal that would increase costs in the transaction, delay the close of escrow, or mandate improvements to be made in escrow that are not cost effective (i.e. will not recover their costs over their lifetime).

Disclosures and Inspections
Current case law and statutory law require homeowners to disclose any "material" fact they know about the property to prospective purchasers. If a property owner has obtained an energy audit or label, the question becomes; does that information constitute a material fact that must be disclosed?  Based on prior positions, C.A.R. would not oppose legislation/regulation requiring the disclosure of this information provided there is no cost or delay to the transaction.

What about policies requiring property sellers to disclose utility bills (i.e. the current utility bill or last 3-6 months) or obtain a meter audit? Providing a copy of a utility bill during a transaction while not conclusive on energy use might provide general information related to the homes energy performance and carrying costs and impose little or no cost to the transaction. If there is a minimal cost (e.g., less than ten dollars) to obtain utility bills, and no delay to the transaction, would C.A.R.'s oppose? What about a proposal to require a meter audit? Would C.A.R. be neutral on that proposal if the audit cost could be recovered upon correction of the identified energy efficiency deficiencies?

What about proposals requiring owners or utilities to record energy ratings and conservation upgrade information with the county recorder?  Some energy conservation proponents have suggested requiring homeowners to record a title document creating a permanent record for energy ratings/labels and upgrades, giving prospective purchasers access to pertinent energy efficiency information. Should C.A.R. oppose these proposals even if the recordings are not required as a condition of sale?

Based on prior policy positions, C.A.R. would oppose any requirement using the transfer of property to trigger an inspection/audit/label and disclosure if it increases transaction costs or creates delay to the close of escrow.  Should C.A.R. continue to oppose if there was no delay to closing and the inspection/audit/label and disclosure cost is subsidized completely by the government?

Retrofits and Upgrades - Starting a clock
While C.A.R. has clear policy against conditioning close of escrow on the completion of energy retrofits, would a proposal that requires  compliance with the state's energy efficiency standards, in 6 months, one year, eighteen months, etc. after close of escrow be considered a point-of-sale mandate that C.A.R  would oppose? This approach does not delay the close of escrow, but does arguably impose additional costs on the purchase of the home, because the retrofits must be completed as some point after transfer. Is there a time frame after the close of escrow that  is acceptable?  C.A.R. will face this proposal in 2013. Should C.A.R. be prepared to respond?

Financing Options for Energy Efficiency Measures
Financing efficiency audits and improvements is one of the most difficult hurdles for homeowner to overcome. C.A.R. has supported the availability and voluntary use of Energy Efficient Mortgages and 203k loans offered by Government Sponsored Enterprises [(GSE's) such as Fannie Mae, Freddie MAC and FHA]. While this "energy efficiency" financing may be "cost effective" It is not often used because they often create excessive time delays. C.A.R. does not support Property Assessed Clean Energy (PACE) loans because they jeopardize the "first" lien priority held by GSE's who will not purchase loans from jurisdictions authorizing these loans. 

A new financing mechanism has emerged that requires further consideration. On-bill financing/repayment is a voluntary option for owners to finance energy efficiency improvements with no upfront costs, allowing them to repay the loan as a part of their monthly utility bill. According to program proponents, the savings from the efficiency improvements will offset the cost of the loan, by reducing the owner's monthly utility bill. If on-bill financing/repayment were offered through the utilities, owners might be able to gain a necessary financing mechanism to make efficiency improvements throughout the life of the home that would not be tied specifically to the transfer of property: Is this a viable alternative to point-of-sale? In the absence of a change in policy, C.A.R. would not oppose on-bill financing or "pay-as-you-save" programs. Would it be appropriate for  C.A.R. to  support on-bill financing as an alternative to point-of-sale?

Should C.A.R. oppose Legislative or Regulatory Point-of-Sale requirements that delay transactions or impose unrecoverable costs?  

FEEDBACK