The government influences home construction standards with regulations that must be met when selling a home. Today the US government is focusing on energy efficient products and materials for new construction and existing homes. Enforcement of new standards happens in many ways. For example, there is a process for a town's building inspector to check that all codes have been followed during construction or remodeling, before issuing a “Certificate of Occupancy” which is required before anyone can occupy a new home.
In past years, the government has stepped in to make homes more safe by requiring that smoke and carbon monoxide detectors be installed before a home can be sold. In this way, existing homes without these features are upgraded before the sale is completed. Similar rules exist for private septic systems to protect the environment, and each state or town may add requirements unique to their location.
Today we have incentives like the energy tax credit, to motivate individual home owners to update one or more of their homes features to save energy. With all the emphasis on energy efficiency, there is new legislation being written to update National Building Codes to make new homes more energy efficient … and like smoke detectors, these could become a requirement when a home is sold.
The intent may be right, but there are major concerns within the construction and real estate industries that the cost to individual home owners may be prohibitive. Known as the Waxman-Markey Bill, homes for sale that qualify as “federally related transactions” which are almost all of them, may soon be required to undergo an environmental inspection.
Government Regulations that Add to Home Seller Costs
- Cost of the environmental inspection if required, where today's home inspections are a choice (and cost) of the buyers.
- Where windows are not airtight, the seller may need to bring them up to today's energy codes which could add significant costs for sellers of older homes.
- Appliances that are not Energy Star certified might also have to be replaced before the sale happens.
These added costs would be extremely detrimental in today's housing market. Prices are already depressed and these added costs would further impact home owners wanting/needing to sell. Many homes are sold as fixer uppers, and these transactions would be impacted if the updates had to be made by the seller. To learn more about this impending legislation, read Cap and Trade Will Depress Home Prices.