Wednesday, April 20, 2011

Risk Management Covers the Waterfront----

Was at our semi-annual risk management seminar in San Francisco today; this is when our fabulous in-house counsel walks us through a range of new laws and regs, and tells us cautionary tales his latest travails--the non-refundable deposit that was refunded, eventually; the short sale situation that went awry, and so on.

A few quick notes:

--Before a home sale can close, the home must have appropriate smoke detectors and double strapping on the water heater. These rules have been in effect for years. New this July is a requirement for carbon monoxide detectors. Unfortunately, there's currently no clarity on how/where to install them, and how many a home should have. That should get worked out by the time you go to sell your home, but meanwhile, consider buying at least one when you're next at Piedmont's Ace Hardware--they cost about $25 each and plug into a standard outlet. Note that your garage (if any--hey, this is Piedmont after all) and your hot water heater are the classic sources of CO.

--Also new this year is EPA training for painting professionals in lead paint safety, and requirement that whenever a professional paints more than six square feet (etc. etc.) a trained professional be used (homeowners are to some degree exempt). As a corollary, then, is the agent's disclosure as to whether any painting was done, and if so, if it met the extent standard, was done by the owner, and was done by a professional.

--I didn't realize that there are 2007 rules regarding kid-safety features for pools at private homes (I just knew about the community pool requirement regarding a "fix" to counter the suction effects at typical pool drains). If you have a pool in your backyard, ask your pool servicer for an update.

--Finally, as noted in an earlier post, the CA Energy Commission is trying to effect change in one of the more wasteful parts of California living--your home. The Commission developed the Home Energy Rating System (HERS), and has issued an informative booklet for buyers and sellers at

The Energy Commission created this booklet, so I immediately thought, "even though it's not required by the Dept. of Real Estate, must we all provide this to our buyers? Has the standard of care just changed?" And sure enough, my firm(unlike others in the area) now requires that buyers and sellers receive the booklet with their earthquake and lead booklets, and maybe in a few years, sellers might hear "we want to reduce our offer by $25,000 because the HERS rating is only 120 (out of 250)."

Because I'm an EcoBroker, I've been paying for the HERS evaluations for clients using a home inspector who is also HERS-certified--they get a standard home inspection, plus an energy evaluation of the home and advice on where the next most cost-effective energy-efficiency improvements might reside.

I give my sellers an EcoBroker checklist of "green" features so we can highlight them in our marketing, as appropriate, but I'd note that with our older homes and single pane windows, my sellers' homes rarely would rate high up there on the HERS rating--so I best represent my seller (after all, that's my job) by staying mum.

(Back in 2007 when John McComas did a HERS evaluation of my 1908 home, we ranked 72 out of 100 points on the then-standard scale. The real disappointment was the suggestion that our rating could go up to seventy-six points out of 100 if we implemented all recommendations.)

But the effort will be powerful. Did you hear today that EBMUD has to change its cost structure because East Bay'ers have been installing too many water-saving devices and thus EBMUD isn't distributing enough water priced at a point that covers its costs? That's the effect of one-toilet change-out every 20 minutes!

I'll be collecting contact info for HERS-certified inspectors (there are very few this early in the game)--let me know if you want a referral!

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