Unintended Consequences

By: Victor Normand

Alternative_EnergiesRecently the Massachusetts legislature passed and the Governor signed a new energy bill H4568, “An Act to promote energy diversity.” Most of the bill had to do with expanding the Commonwealth’s efforts to encourage alternative energy sources by using offshore wind farms and hydropower to generate electricity.

The bill keeps Massachusetts ahead of most other states in the areas of energy conservation and the use of alternative/clean energy sources. It is innovative in its advocacy of off shore wind power generation, challenging in its intent to double the amount of electric power generated by clean sources, and most importantly, it is proactive in its scope as it anticipates the not-to-distant future when local utilities will no longer have the use of nuclear power plants.

The Great and General court is to be commended for bringing forth such an important piece of legislation, hailed by most conservation and clean energy organizations as a very good bill. But not everyone is pleased with the law, most notably, the Mass Energy Consumer Alliance and many State Senators, including Senate President Stan Rosenberg who favored a more expansive bill.

One of the sections that passed in the Senate and was stricken from the legislation by the conference committee and not included in the final House version of the bill would have required that every home sold in the Commonwealth have an energy rating before it could be listed for sale and an energy audit before closing. This idea, similar in principal to gas mileage ratings on automobiles, has benefit for consumers, but major pitfalls for most homeowners.

Last year nearly 50,000 homes were sold in Massachusetts. Newer homes in many communities did come with a very sophisticated energy rating, called a HERS rating (Home Energy Rating System), but that was only 6% of the market. Even though implementation of the bill could have taken years, the broad scope of the rating requirement would be overwhelming.

Implementing new laws and regulations is nothing new to the real estate industry, lead paint certifications, home inspection notifications and closing disclosures for example. It is the significant unintended consequence such a rating and audit requirement would have on owners of older homes; homes more often concentrated in lower income, urban neighborhoods that would be problematic. Especially since Massachusetts has the second oldest housing stock in the country with a median age of 54 years.

There would be a cost associated with both the energy rating and the energy audit, and a time factor to get them accomplished to be considered. The burden to implement this would fall on the home seller, who would be under no obligation to make energy improvements.  But as a practical matter, home buyers would be looking to sellers to make identified improvements or in the alternative, to discount the sale price. Even home buyers who are in the market for an older home who are prepared to live with the added cost and discomfort of a less energy efficient house would be well advised to take advantage of the situation in preparation for the day when they will find themselves in the home sellers shoes.

The Massachusetts Association of Realtors lobbied to get the energy rating section of the bill removed. Their economic and social arguments were effective this time, but the advocates will be back next year. So, it is not enough to rely on lobbying efforts alone. Those of us in the real estate business need to continue to take energy conservation seriously by making sure potential home sellers include energy saving efforts on the list of important worthwhile home improvements. The unanimous vote of the State Senate in favor of this measure in the just ended legislative session is not insignificant.

Building Permits and Home Improvements

building-permit2By: Victor Normand
Published: December 2013

So you have decided to do some home improvement work around your house. It’s great to envision the kind of upgrades you could do and at the same time, significantly raise the value of your home.  Maybe update the kitchen with a new granite countertop, under cabinet lighting and hard wood flooring. Finally take up that impractical wall to wall in the dining room.  You’ve got your plan; you’ve fixed your budget, now what?

You might want to do some or all of the work yourself. Maybe persuade some handy friends to lend their expertise?  Or maybe the more you look at the scope of the job; you begin to weigh the idea of hiring the help you need.  The more you get into what needs to be undertaken, the better some hired help begins to look.

Do you need a building permit for the work?  If that question does not readily come to mind, it should.  If your project only involves ordinary repairs such as painting, wallpapering, or replacing that old countertop, you are probably good to go.  But larger projects, such as building a deck or putting on an addition would require a building permit. As the homeowner, you could apply for one. But here’s the thing; you might not want to do it yourself.

For large projects, most homeowners may not understand what’s involved in properly    pulling together all that is required to complete a building permit. And even if you have the time and expertise to do the work, you’ll want to be mindful of the following.  Only by using the homeowner exemption, which is allowed under state law, all construction, reconstruction, alteration, repair, removal or demolition of a building or structure in Massachusetts requires both a Licensed Construction Supervisor (LCS) and a registered Home Improvement Contractor (HIC).

 

There are strong consumer protection laws in Massachusetts for homeowners who do not get the work they contracted for, but only if a LCS and HIC are used on the project.  The Home Improvement Contractor Act will compensate consumers up to $10,000 for unpaid judgments against a contractor, but only if the building permits were applied for by a LCS and the work was done by a registered HIC.  The full requirement for access to this Guaranteed Fund as it is referred to include:

  • A written contract for the job
  • The work must be supervised by a Licensed Construction Supervisor
  •  The contractor must be registered with the state as a Home Improvement Contractor on the date the contract was signed
  • The property is located in Massachusetts
  • The property must be your primary residence
  • The contract must be for work to a preexisting owner-occupied residence with no more than 4 units
  • The Request for Arbitration, or other court action must be filed within 2 years of the contract date

No one likes to complicate a project more than necessary or add costs where they might be avoided.  Everyone has heard horror stories about projects that have gone very wrong.  Bear all this in mind as you progress with your improvement plans.  Before you actually begin construction, pay a visit to your local building inspector and have a talk about what you plan to do.

Along with some terrific resources that we can offer, below are some useful links to check out.

The Official Website of the Executive Office of Public Safety and Security

Homeowners Q&A

Look-Up for Licensed Construction Supervisors

Look-Up for Registered Home Improvement Contractors

Building Permit Contact Information

Town Building Department Phone email
Acton Frank Ramsbottom 978-929-6633 building@acton-ma.gov
Boxborough David Lindberg 978-264-1725 david.lindberg@town.boxborough.ma.us
Concord John Ross Minty, Jr. 978 318-3280 jminty@concordma.gov
Harvard Julie Doucet 978-456-4100 jdoucet@harvard.ma.us
Littleton Roland J. Bernier 978-540-2420 rbernier@littletonma.org
Maynard Richard A. Asmann 978-897-1302
Stow Craig Martin. P.E. 978-897-2193 building@stow-ma.gov