This issue paper has been drafted to be read in the context of the ResidentialBuilding Mandatory Disclosure (RBMD) Regulatory Impact Statement (RIS). It is provided to allow stakeholders to provide input on issues which cannot be fully explored in the RIS at this stage but which may be integrated into the RBMD scheme at a later date.
ISSUE PAPER: REMOTE HOUSING
Outline of Issue
Under the regulatory options being considered for the introduction of RBMD the obligation for disclosure would apply to the sale and/or lease of all types of residential buildings (separate houses, semi-detached houses, flats, units and apartments), with some exceptions as deemed appropriate by relevant jurisdictions, particularly in regards to remote housing.
Under the options for mandatory disclosure being considered, Options 1 or 2 would require a thermal assessment of a residence to be undertaken by a qualified third party assessor.
Forthe other regulatory options considered, a qualifiedassessor could still be used or the assessment could be undertaken through a self-assessment procedure (either through a checklist or through an on-line assessment tool). Option 5 is a non-regulatory information campaign and so no assessment would be mandated and Option 6 would allow owners to opt-out of an assessment and receive a zero rating.
CRITICAL ISSUES
Exemption of remote housing
A clear issue is the policy rationale for any exemption of remote housing from a mandatory disclosure scheme.The main rationale is that persons living in remote areas (however “remote” might be defined) may not be readily able to gain access to assessors in their area, or that the cost of obtaining an assessment might outweigh the potential benefits due to higher costs associated with engaging an assessor in a remote area. A lack of housing choice in remote areas may also lower the potential market benefits of mandatory disclosure.
However, questions arise as to whether the appropriatepolicy is to fully exempt persons in remote regions from the requirements of mandatory disclosure, or whether in order to meet the policy objective, there should still be an obligation for a person selling or leasing a residential propertyin a remote area to undertake some form of assessment and disclosure.
How to define remote housing
The Consultation RIS ‘Mandatory Disclosure of Residential Building Energy, Greenhouse and Water Performance’ (July 2011) refers to the Australian Bureau of Statistic’s Australian Standard Geographical Classification (ASGC) Remoteness Classification[i] as the basis for determining what remote housing is.
Remoteness is a relative term under the ASGC classification and areas are determined to be remote (or very remote) because of their location in the context of the whole of Australia. Thus remote parts of Tasmania, for example, are remote because of their location in the context of Australia not their location within Tasmania.
The ASGC Remoteness Classification is a geographical classification and does not necessarily provide the level of information as to whether in a particular region a person can access assessors, or that the cost of obtaining an assessment might outweigh the potential benefits. However, the use of the ASGC Remoteness Classification systemdoes provide a mechanism to define remote housing and so enable the establishment of structure for a regulatory regime which can be flexible to accommodate for the requirements of people living in remote areas.
There may however, be more effective and useful means to define remote housing and jurisdictions may wish to institute their own definition. Separate definitions would increase inconsistency between jurisdictions in the application of mandatory disclosure and may create confusion amongst residents in jurisdictions as to what is classified as remote. This may well be an unavoidable risk if jurisdictions adopt different models of mandatory disclosure.
A clear communications message and information package will need to be developed to inform the range of people impacted by mandatory disclosure as to how the requirements for remote housing apply and why they apply as they do in their particular state or territory.
Alternatives for remote housing
An obligation could be structured in any regulatory scheme for disclosure in a remote area not to be based on a third party assessment. That is, a residence that is situated in a region, which is classified as remote under the exception policy may not be required to undertake mandatory disclosure through a formal assessment by a qualified assessor. Instead they may only be required to undertake self assessment (e.g. via a checklist or online tool) and disclose that to prospective buyers or tenants.
HOW TO PROVIDE INPUT
Interested parties are invited to provide input and feedback on the issues raised in this paper to help in determining future policy actions. Submissions close 12 September 2011. Submissions and comments can be sent to OR
Residential Energy Efficiency
Department of Climate Change and Energy Efficiency
GPO Box 854
Canberra ACT 2601
[i] ASGC Remoteness Classification: Purpose and Use (Census Paper No. 03/01), Commonwealth of Australia 2003,