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Ann Arbor’s New Home Energy Rating Disclosure​ Requirement

Attention all Ann Arbor home sellers!

A recent city ordinance introduces an additional step to the home-selling process that you need to know about. The Home Energy Rating Disclosure (HERD) mandates homes to obtain a Home Energy Score (HES) before being listed for sale. Its goal is to enhance consumer protections and promote safer, healthier, and more energy-efficient homes.

We researched this new law to answer our questions and provide you all with essential details. For further questions, feel free to reach out to 

Here’s what you need to know:

1. What does acquiring a Home Energy Score (HES) involve?

Sellers must conduct a home energy assessment by a certified assessor before listing their home. Sellers must disclose the report to the city’s sustainability office, include it in at least one real estate listing, and provide it to buyers

The report covers the home’s energy score, annual energy use, costs, renewable energy estimates, square footage, and greenhouse gas emissions. It also suggests ways homeowners can increase their score and decrease utility bills, proving useful for buyers who want credible information about home energy costs.

2. How is the Home Energy Score (HES) calculated?

Rated on a scale of 1-to-10, with 10 being the highest, HES provides clear information about a home’s energy consumption. Similar to a car’s fuel efficiency rating, HES helps homebuyers make informed decisions. It’s based on envelope quality (foundation, roof, walls, insulation, windows), HVAC systems, and water heating.

3. What score should my home have?

There is no specific score requirement. The HES is valid for 8 years and aids buyers in understanding a home’s efficiency. No mandatory changes are required, and historical energy use won’t bias scores.

4. When does this go into effect? 

The law takes effect on March 12, 2024. However, enforcement and penalty fines for non-compliance will start 180 days later on September 8, 2024, allowing time for implementation and education.

5. Do sellers have to pay for the assessment?

No. Homeowners won’t bear the cost, as the city provides free assessments with a promised turnaround time of no longer than 5 business days. Homeowners can fill out a form with general information and availability to request an assessment.

Home sellers can also hire a certified assessor. A list of local assessors is available here.

6. Are there any exceptions?

This law applies to single-family homes. Mobile homes, detached accessory dwelling units, and vertically stacked multiple dwelling units have exceptions. Sellers can also request waivers in extenuating circumstances.

7. What are the penalties for not conducting an assessment?

First-time offenders face a $500 fine, subsequent offenses incur a $1,000 fine, plus prosecution and court costs. Knowingly submitting a false report results in a $500 fine.

8. What are the reasons behind the new law?

Ann Arbor aims to reduce carbon emissions from residential buildings, contributing to 23% of the city’s total emissions. Aligned with the A2 ZERO plan, the Office of Sustainability & Innovations focuses on reducing building-related emissions. HERD, targeting single-family homes, aims to increase transparency around home energy data, helping homebuyers make informed decisions and encouraging homeowners to make energy-efficiency improvements. This ordinance also supports the city’s goal of carbon neutrality by 2030.

For more details, read the full The Home Energy Rating Disclosure ordinance here.

Have questions or want to talk it through together? Fill out the contact form below or give us a call! Piper Partners is here to help.

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