If you are selling or making major alterations to your home, be aware that you must file an Energy Inspection Report with the Department of Building Inspection (DBI). This report provides verification of your compliance with the City’s Residential Energy Conservation Ordinance (RECO) which requires that property owners take certain energy- and water-saving measures. RECO was enacted in 1982, amended twice since then, and is about to be updated again, so be sure to contact the DBI to keep abreast of your obligations.
- If you are selling your house, before the transfer of title, you or your broker must obtain a valid energy inspection by a qualified inspector and install all necessary conservation materials and devices prescribed by the DBI. You must then provide a copy of the completed inspection form to the buyer. In addition, you are required to file a certificate of completion with the San Francisco County Recorder’s Office prior to or concurrent with the transfer of title. If you have previously furnished proof of RECO compliance with the DBI and the county recorder’s office, you are not required to have another energy inspection.
However, if you do need to undertake an inspection and the results call for you to make modifications to your home, be aware that you are not required to spend more than one percent of the purchase price or one percent of the assessed value of the property, whichever is greater, to comply with the requirements of the ordinance. Note that in the case of one- to two-unit buildings, the cost may not exceed $1,300.
The good news is that before the transfer of title, you may transfer responsibility for compliance with the ordinance to the buyer — if a valid energy inspection has been performed and a written agreement has been signed by you and the buyer containing the buyer’s promise that the RECO measures will be completed within 180 days of the transfer of title. The document must also include your agreement that funds equal to one percent of the purchase price will be deposited in escrow.