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    When a home doesn’t perform to the star rating that was specified

    Anthony Lieberman

    Australian Living, a sustainable building collaborator, has approached a number of people in the industry to find out their reactions and responses to the question “What happens if my home doesn’t perform to the star rating that I paid for?” The star rating that responses refer to is the thermal comfort rating. The idea was to spark discussion among industry and the community leading to better outcomes.

    RESPONSES

    David Baggs, Integreco Consulting: “Most homes don’t perform to specification because they are not being used the same way that the behavioural profiles built into the software model the occupant use. Families and behaviours differ dramatically and it is very likely that two houses exactly the same, right next to one another will behave entirely differently just due to the way the family uses the home.”

    “That said, if you suspected the home was not performing to standard you would have to have very solid proof that the building was not built to specification before you would be able to take it very far with Government Consumer Protection Agencies. I am afraid that it is likely that most mass market housing will underperform. This is because the private certification of such ‘minor’ details as shading device and insulation installation, gap sealing and weather-stripping in my experience (and that of colleagues I have spoken to) is woefully inadequate and the certification system is failing us. However, it is nonetheless better to have the system as is, than not have it at all.”

    Matthew Cutler-Welsh, Homestar New Zealand: “This is a great question and probably happens a lot more than people would expect, as the report title ‘Investigating Quality of Insulation in New Build Residential Homes’ by Realsure Ltd dated 2010 in New Zealand highlights. The report showed that an audit of about 50 new homes, the insulation failed to meet the Standard for installation.”

    “From a consumer perspective, I think customers are likely to be getting significantly less than what they pay for. From a thermal perspective, it’s a huge problem, because even gaps as little as a millimetre, and small amounts of compression or dampness can significantly reduce the effectiveness of insulation. This of course leads to colder, damper homes that are more expensive than they should be to maintain at a comfortable healthy temperature. Another important question for consumers would be to ask – ‘how can I ensure that I’m getting what I’m paying for?’ The answer to this might be independent verification at pre-lining stage, or thermal imaging of completed houses.”

    Brad Hoad, Association of Building Sustainability Assessors (ABSA) Director: “There are a few potential reasons a home might not perform as well as expected considering its star rating, such as poor design, issues with build quality or a lack of understanding of energy efficient operation. Poor design, planning and specification might mean that homes are incorrectly oriented to maximize energy efficiency or perhaps the wrong products are chosen, leading to excessive electricity consumption.”

    “Other problems can be caused by issues with build quality and installation details, for example leaving too many gaps in insulation, leading to a leaky building. Poor energy efficiency can also result from a lack of understanding of how to operate the home correctly, for example opening and closing windows at the wrong time.”

    “Many of these issues arise because of poor appreciation of the planning and design principles that underpin the star rating system, for example why certain designs and materials are used and how these homes should be operated. This can then be made worse by builders and consumers who seek the cheapest quotes and make shortcuts which undermine the very principles they are seeking to use in order to have an energy efficient home.”

    “The star rating system is very accurate in projecting how a home may operate based on a set of criteria, however if corners are cut in its construction and operation then it won’t perform as well as it could. We would need to determine why the home is not performing as well as it should – whether it was failure in the planning system or it was incorrectly built and certified, or perhaps the homeowner needs to learn more about energy efficient practices. Although there may be a temptation to litigate in these situations, it’s likely to be cheaper and simpler to make the amendments required to the home in order to improve its energy efficiency.”

    “My advice to someone considering a new home or renovation that is going to put such an emphasis on the star rating would be to – interview or research the people you’re considering using for the design, energy rating advice and the building process and consider their skill, qualifications / accreditations and past projects – sometimes the more expensive quote will pay off in the long run because of the long term savings of a well-designed and built efficient home. Ask the designer and builder how to operate your home correctly (when to open and close the windows for example) in order to save energy on heating and cooling – efficiency will vary depending on design and location.”

    “My advice to someone who has built a new home or renovation and doesn’t think they received what they paid for is to look at how you are operating the house and take simple steps to reduce consumption – for example closing the windows when it’s very cold or hot outside, or consider sealing downlights with an approved downlight guard to avoid leaking warm air. Talk to an experienced third party, practical building consultant or sustainability expert such as an ABSA assessor who can advise on what the problem might be, how to address it, who might be to blame and whether it is worth pursuing redress.”

    Dick Clarke, Envirotecture and representing Builders Designers Association: “That’s an interesting question, as it prompts a response on a few different levels.

    1. Physically – heat bleeds into and out of the home at higher/faster rate than expected, thus increasing the internal temperature range and making it less comfortable.
    2. Financially – this may affect running costs, if energy is imported into the property to run heating or cooling mechanical equipment. If none is installed, there may be no financial burden, but back to point 1 above – it becomes less comfortable.
    3. Legally – there may be a case to answer on the part of the designer, and/or the energy rater, and/or the builder, and/or the certifier.

    3a) Designer and energy assessor: The current state of the NatHERS software is such that a margin of error can be expected. It is common knowledge in the industry that, due in part to the inadequacies of the materials and fenestration libraries (which currently forcing the use of proxies) and the state of the core engine itself (both are years overdue for upgrades), and in part to the ability to ‘tweak’ results according to how the data is entered, it’s possible to vary results by up to half a star, perhaps more. Needless to say, this is much more likely to be upwards than down! Therefore it is equally arguable in court that any discrepancy is simply within the expected margin for error. Success or failure of the case may ultimately depend upon whether Cleaver Green is acting for the prosecution or the defence!

    3b) Builder: Were all construction and specification details installed as directed, and properly? Thermal imaging can reveal some nasty surprises. If they do, there is likely to be a case to answer for rectification.

    3c) Certifier: Did the certifier actually inspect all the relevant components and installations? In NSW, the Building Professionals Board publishes a long list of certifiers fined and/or disqualified for non-performance in such matters. Many certifiers recognise they do not know everything about everything (not claiming to be the “suppository of all wisdom”) and call on others to certify what has been designed and installed. This is either the designer, a subcontractor, or the builder. In terms of legal liability – refer again to sub-point 3a above, and call Cleaver Green.”

    “The ramifications of wild claims about high star ratings have yet to enter the broader discourse in the residential sustainability sector. The annual ’10 Star Challenge’ in Victoria is all well and good, because the homes are assessed on paper only. Even then, it might be useful to have an independent third party assessment done to verify the result. Likewise, some of the 9 star homes that have recently appeared around the country. And for that matter, I shake my head in disbelief at many of the project homes that presumably pass either BASIX (maybe not so hard) or BCA 6 Star, yet have poor insulation and lax attention to installation details. Where’s that thermal imaging camera.”

    A spokesperson for the Department of Industry: “The Australian Government believes homeowners have the right to get the standard of house that they paid for. This includes the level of energy efficiency specified in the National Construction Code (NCC), which ensures homeowners benefit from the increased amenity and energy savings that come from an energy efficient house.”

    “A Nationwide House Energy Rating Scheme (NatHERS) rating is intended to allow the comparison of one house design to another based on specific climatic conditions. The rating reflects occupancy assumptions based on the design of the house. The rating does not reflect how individuals operate their house and cannot predict whether they will optimise the energy efficiency features of their house and appliances. For example, individuals may not take advantage of ventilating their house in summer when it is cooler outside.

    The Australian Government manages NatHERS on behalf of the State and Territory Governments to ensure NatHERS software rates houses consistently and accredited users, or assessors, of the software meet minimum qualification and quality assurance requirements.”

    “The NCC sets out the minimum energy efficiency standards for new houses and is given legal effect by the building regulations within each state and territory. It is the responsibility of each state and territory building regulatory authority to enforce the NCC within their jurisdiction and to ensure that houses comply with these standards at both the design and construction stages. It is also the responsibility of the states and territories to ensure NatHERS ratings are carried out using accredited software and by appropriately qualified assessors.”

    Tim Adams, Principal F2 Design: “Our practice motto is ‘What makes a difference is knowledge, not money’. Experience and research confirms that high performance houses need not attract cost premiums if basic thermal design principles are allocated the appropriate priority. It is imperative however for all the participants in the project delivery process as well as the occupants of a dwelling to be in tune with the objectives in order that the results are not diluted. Improving understanding of the issues at a consumer level is already causing demand driven impetus that progressive members of the building industry are embracing. Short comings in delivering the anticipated product are however becoming easier to identify than ever with testing equipment like thermal imaging photography and blower door tests. Cutting corners inadvertently or intentionally will likely lead to a body of home owners seeking remedial action.”

    Keith Anderson, Kingspan Insulation: “Builders are obligated to deliver the specifications they are contracted to deliver. Failure to do this can have a negative effect on the operational energy efficiency of the home, and this will cost the occupant in heating and cooling costs. Factors that could compromise the energy efficiency are poor site control allowing contractors to install alternative, and perhaps non-compliant products, and acceptance of products without a recognized third party accreditation, such as CodeMark.”

    Michael Plunkett, SmartRate: “Interesting question. A NatHERS Building Thermal Assessment (star rating) is purely an indicator of the home’s compliance with the BCA Energy Efficiency provisions. It should not be relied on to determine a home’s actual performance. We are all different and the NatHERS protocol requires an assessment to be performed against a very narrow description of how a home is used and what the occupant’s behaviour is within each room.

    “How would a home owner know if it does not perform? High power bills? Uncomfortable to live in – too hot, too cold? Builders do not explain, educate new home owners on how to use their homes once completed. Many builders just aim for the minimum BCA requirement and the star rating may not figure on many homeowners’ radars.”

    “However, second and third homeowners are often well informed and the rating may be important to them. In this case the level of insulation, type of glazing etc. will be on their radar particularly if the building elements require upgrading at extra cost as part of the design/contract process.”

    “If the client requests a higher NatHERS rating as part of the design process, say 8 stars or more, then the potential for a future dispute in the future is increased if the assessor has made an error or the builder does not build the home strictly in accordance with the home’s thermal performance assessment or the design is altered during construction and the assessment is not reviewed.”

    “The homeowner, thinking they have a high rating building, then sells the property and relies on the rating to achieve a better sale price. Combined with other features like solar hot water, solar panels, water recycling etc. it is anticipated that resale values in the coming years will reflect these features in the final sale price of a home.”

    “On selling the home, the purchaser for whatever reason, feels that the advertised performance of the home is not achieved and carries out another assessment. This assessment reveals a star rating that is different to that advertised. What can the homeowner do? The sale may not proceed. The potential purchaser may negotiate a lower purchase price. Both examples impact on the financial return to the homeowner. The original homeowner then has a case to pursue the builder, certifier and assessor for compensation for financial loss.”

    “Think it can’t happen? It already is happening with homeowners holding to account builders and certifiers for errors made during construction. It is only a matter of time before assessors are included in this process.”

    Gary and Anna Wright, Right Homes: “There are many factors that help a home to perform according to its star rating but the main thing that we would like to see happen, is more education or training provided to our trades, builders and clients so they can understand better and keep on top of new sustainable building techniques that are available. With more education we can all work together to build better, more comfortable homes. At Right Homes we also work with all our clients on how to operate their homes properly so this can help eliminate the potential occupancy problems that can occur when trying to regulate temperatures in their homes at different times of the year. How the end user operates the home has one of the biggest impacts on how the house performs.”

    Cameron Frazer, Archicentre: “Simply put, you need to change the way you live in and use your home!

    There are 2 critical aspects to the performance of a house – the built form of the house (the physical building itself – and the related ‘star rating’) and the operations of the house (how you live in and use the house – for which there is no star rating).”

    “Current star rating systems only apply to the way the physical building is constructed – mainly around the thermal performance of the building. They do not take into account the use of the building – how you and your family live in it every day.”

    “For example, your house may be fitted out with LED lighting, double glazed windows, very well insulated walls and roof and rainwater tanks. However if it’s a big house, you have 3 televisions, a big stereo system, 2 fridges, a range of computers and other devices and everyone in the family takes long showers each day, you will consume considerable amounts of energy, regardless of the star rating of the physical building.”

    “What matters is how you live in and use your house. Take steps to change your family’s behaviour. For example:

    • Turn off lights and appliances when not in use.
    • Limit shower lengths (or invest in gas boosted solar hot water).
    • Invest in solar energy generation on the roof (solar PV).
    • Get rid of that extra fridge (a dedicated freezer may be more efficient).
    • Invest in or replace old appliances with highly energy efficient new ones.
    • When heating or cooling the house, close off rooms that are not being used.”

    Cecille Weldon, LJ Hooker: “A star rating, as with other Liveability Property Features, offers the potential for reduced running costs and increased comfort. However, these efficiencies are dependent on how the house is used by the occupant. This piece of information can often be absent in the marketing of the star rating system. In this sense, a star rating is the beginning of the story: educating people on how to use the home’s features most effectively is far more important. Our work in residential real estate over the last three years has highlighted how little is really known about utilising a home’s features to reduce running costs and increase comfort.”

    “Whilst star rating of homes is often compared to the effectiveness of the star rating of appliances, they differ in a fundamental way. We all know how to turn on a washing machine but most of us don’t know how to recognize or really utilise the individual features in our home that enable us to adapt to climate effectively: the property features that act as levers for us to take control of our comfort. Furthermore, many of us are unaware of what real comfort is – the ability to simply feel good without having to always adjust the thermostat.”

    “It is evident from recent research that work needs to be done to address the standard of rating assessment and we welcome this discussion. There is clearly a need for assessment standards to be tightened to better reflect the rating of the home. In the ACT, where the EER rating is mandatory for new and existing homes, there is currently no scheduled auditing of assessments. As with any property feature, an agent can only work with the certification evidence they are provided with – they are not assessors.”

    “For new homes, which currently encompass only 1.5 – 2% of Australian residential housing, an energy rating has been mandatory since 2006. However, homes which were initially rated may have undergone significant alteration prior to being sold again. This becomes problematic for the next sale. This is the limitation of the star rating system over time as it seems to lose its effectiveness for the next sale.

    In addition, the current assessment software on which the star rating is based works off a plan, not a property visit. There is no ‘as built assessment’.”

    “This is why we believe identifying individual Liveability Property Marketing Features™ at point of sale that encompass location, floor plan and layout, key building structure elements, important energy saving inclusions, important water saving inclusions and an energy rating is far more effective than a star rating alone.”

    “In our opinion, it is important that residential agents are trained to understand rating systems and what they provide. But more than that, it’s vital agents understand the wider drivers of a more liveable home and the pathway to achieve this over time. From our perspective, we have driven this agenda with our agents in the Liveability Real Estate Specialist Training we provide and the important sustainable design and construction industry partners who work with us in this development of this program. We have created this dedicated training pathway for the next generation of real estate agents who are able to identify these features, know why they are important, market them responsibly and clearly advise consumers about the potential these features offer.”

    “We believe there is valuable fundamental information that is sometimes lost in the focus on the energy efficiency potential of the built structure and the star rating system. We have identified the 17 Things™ (Liveability Property Marketing Features™) for this purpose, which covers passive design and orientation, water and energy efficiency and connection to community. We believe this offers a richer, deeper context for a star rating to sit within, and offers the opportunity to inform consumers at the point of sale that ultimately it is how they use the house that matters most.”

    Collaborated by Anthony Lieberman, Australian Living – May 2014.

    Visit yourfuturehome.com.au for the full article. 

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