Mandatory disclosure RIS open for comment (NAT)

The Federal Government has released a Consultation Regulatory Impact Statement (RIS) for the introduction of mandatory disclosure of the environmental performance of all homes at the point of sale or lease.

The intention is for owners of residential properties to obtain an assessment and disclose their property’s energy, greenhouse and water performance when the property is advertised for sale and/or lease. It is intended that the scheme commence in mid-2012 and would apply to all houses and apartments across Australia.

The RIS outlines six possible options for the scheme. Options 1 to 4 and Option 6 are regulatory proposals.

The five regulatory options are:

• a full thermal (energy) assessment based on detailed building information completed by a qualified assessor,
• a simplified thermal assessment based on basic building information completed by a qualified assessor,
• an online basic thermal assessment completed by the owner or agent,
• a checklist with no formal rating completed by the owner or agent,
• an “opt-out” feature which would allow home owners to opt-out of undertaking an assessment and declare the home with a zero rating.

The sixth option is non-regulatory and would see the government running a public awareness raising program encouraging people to improve the energy, water and greenhouse performance of their homes. This could include a voluntary checklist similar to that used in Option 4 and promote the use of assessors and assessment tools.

The cost benefit analysis provided shows that Option 1 would have a negative cost benefit but all other options would be positive. The highest cost benefit ($919 million over 10 years) is estimated for Option 2 – a simplified thermal assessment by a qualified assessor. It is suggested that this option would cost around $183 to the owner. Certificates would need to be registered with the relevant state agency and could be reused within a set time period.

Whilst Option 2 has the highest benefit nationally, in some States Option 4 shows the highest cost benefit – being South Australia, Western Australia and the Northern Territory.

The scheme would operate as part of the conveyancing (buying and selling) process. If agreed to, each state and territory will need to adopt their own legislation, based on a national model.

Responses to the RIS are due by 12 September 2011. A copy of the RIS is available from the Ministerial Council on Energy (http://www.mce.gov.au/quicklinks/bulletins.html)

HIA is preparing a response to the RIS and would welcome member feedback.