It’s official, Minneapolis is implementing a Time of Sale Energy Disclosure program, which takes effect on January 15, 2020. For today’s episode, we invited Structure Tech home inspector and Minneapolis Truth-in-Sale of Housing Evaluator George Ury onto the show to help discuss this new program. We explain why the program is happening, the nuances of the program, the stuff we don’t yet know, and how this will affect people selling their homes in Minneapolis.
The following is a transcription from an audio recording. Although the transcription is largely accurate, in some cases it may be slightly incomplete or contain minor inaccuracies due to inaudible passages or transcription errors.
VOICE: What is a TISH? TISH, TISH, is a Truth in Sale of Housing inspection. So it’s an inspection that some municipalities, some cities here in the Twin Cities require you to have in your home before you can put it on the market.
Bill Oelrich: Welcome, everybody, to Structure Talk, a Structure Tech presentation. My name is Bill Oelrich, alongside Tessa Murray and Reuben Saltzman. Today, we’re gonna jump into a topic that’s kind of gaining some momentum around town and if you’re in the real estate world around Minneapolis, St Paul, you know what Truth in the Sale of Housings are all about, or TISH is. And Minneapolis is… They’re in the process of making some changes to the TISH procedures or policies, is that correct, Reuben?
Reuben Saltzman: Yeah, big changes.
Bill: Okay, great. And so we brought in one of our TISH evaluators here at structure tech, George Ury, he’s gonna spend the podcast with us today and we’re gonna kind of dig into some of these changes and talk a little bit about time of sale inspections too, in the city of Minneapolis.
Reuben: And for the record, I am a licensed…
George Ury: I was gonna say… You…
Reuben: TISH evaluator.
Tessa Murray: You did too.
Reuben: I am licensed. I’m a bonafide TISH evaluator.
George: He does between one and two TISHs a year.
Tessa: A year.
Reuben: I do not, now, George. I haven’t done one in years.
George: Maybe up to… Maybe up to three?
Reuben: George is really exaggerating here. It’s somewhere between zero and zero.
Reuben: But it was a big pain in the butt to get that license and I ain’t giving it up.
Bill: So, what’s the whole point of a TISH evaluation? Why is it in place in the first place?
Reuben: All right, go ahead, George because…
George: I’ll give you my spiel and then you tell me how wrong I am. There probably is…
Reuben: There is no right answer. No, there is no right answer, but there’s what people have said and there’s what people have written.
George: I will say this, and you’ve experienced this. When we go to a home, sometimes you can just tell by the look in their eyes, it’s like, “Who are you and why are you in my house right now?” Because it’s a city required inspection that has to take place.
Reuben: If you’re gonna sell your house.
George: If you’re gonna sell your house for truth in sale of housing, both programs, for at least for Minneapolis and St Paul have been around since the mid 70s, when shady deals, I guess, were going down. And also, Minneapolis wanted a way, they created an ordinance, so they could just look at a few things that are more like health-and-safety related. And it was really before buyer inspections became really common, and I think that’s what people are confused by. It’s like, “Wait a minute, I have to do this and now someone else is gonna look at it later on?” One of the big differences is that for truth in housing, we’re looking for health and safety. So smoke alarms, carbon monoxide alarms, I just tell people…
Reuben: Protect the city water supply.
George: The water supply backflow prevention.
Tessa: Backflow prevention.
Reuben: That is huge.
George: All that…
George: Let’s just call it backflow prevention.
Reuben: You’re the king of the acronyms that you make up.
George: What is it with the… You… I have to Google every email you send me.
Bill: That’s right.
George: It’s like, What is… These are just consonants strung together.
Reuben: But I’ll tell you what, on this podcast, Bill is so darn good. Every time we an acronym…
Tessa: Explaining what he’s saying. Yeah.
George: Bill pauses it and he explains it.
Tessa: Yeah, you do.
Reuben: So he is self aware.
George: William, I have to say, I have noticed this in the past podcast, it’s like you are doing a great job of pausing for those explanations of acronyms.
Bill: Okay. So, we’re protecting the city water supply. How?
George: Yes. Through backflow prevention devices And just making sure that water doesn’t get syphoned back into the drinking water supply. You never want the place where the water’s coming out, you never want that to be submerged in water.
Reuben: George is saying backflow prevention, but I mean, even better is an air gap.
George: Oh yeah.
Reuben: Just make it so that the clean water never touches potentially dirty water, and that’s… Just make it so the water has to fall to get to its vessel, that’s an air gap, that’s the best way to do it.
Bill: All right, so this is a Health and Safety inspection. It’s on the owner to complete it, so they can sell a house.
Bill: Can the deed be recorded or the closing papers be signed without a TISH filed?
George: No. We often will get calls. It’s like, “We close tomorrow, and we forgot to get a TISH”.
George: So then, there are the panic calls to Structure Tech, to say, “We need someone out there today, because we forgot to get a truth in housing done.” Yeah, so that happens, but yeah, you need a truth in housing in order to actually close on a home.
Bill: Okay. So now, Minneapolis is shaking things up. Is that a fair statement?
Reuben: Big time.
Bill: Okay. All right, what’s the point of the shake-up?
Reuben: Wait a minute, hold on now, before we get there, we were talking about why you need a TISH.
Reuben: And I think this is an interesting topic, because the published reasoning for the truth in Housing Program is to improve the city’s housing stock. It’s because of neighborhoods that were going into urban blight. This is the actual language they use. And houses were falling apart and dilapidated and so we enact this Truth In Housing program, and people are gonna be made aware of the condition of all these homes, and we even implement a repair program and it’s gonna improve the city’s housing stock, improve the value of the homes, and make our city a more desirable place to live. Now, George and I were sitting in at a meeting at a large city. I won’t say what or whom but we were sitting in on a meeting. And I brought this up about, what’s the whole purpose of this, and the guy in charge over there said, “Well, that’s not exactly true,” and I just kind of stopped and went, “What?” He goes, “Well, I know that’s what we had published but that’s not really why we have this program.” The whole reason this program is still in effect is because it’s a big revenue generator for the city.
Tessa: It makes money.
Reuben: It makes a lot of money for the city and that’s why it’s still around.
George: Does the city start with an M or an S?
Reuben: Stop it, George.
Reuben: There are so many confused people as to say, “What are we doing?”
Tessa: I wish our government officials were this honest about why we have certain laws in place, and what actually happens to people.
Reuben: Yeah, just be honest with people.
Tessa: This… And that’s what it is.
George: I mean, people have asked us, “Why do we still have it? Why do we even have this program anymore?” And part of the answer is like, “It is so entwined and it’s so… There’s no releasing the tentacles.” I’ll also say, if a city decided, “Well, let’s just use home inspections… Because home inspections, everybody’s doing a home inspection. Why don’t we just use that?” If you think about it, if home inspections took the place of the TISH, well then we still have to have a process in place. ‘Cause like, “well then who do we send the report to? What government agency… ” So, TISH isn’t going anywhere really, for a while. It does keep people on their toes. And I will say that because of St Paul’s truth in housing, the only thing St Paul requires is one hardwired smoke alarm at the sleeping rooms by the sleeping room.
Reuben: And they don’t define by the sleeping rooms.
George: No, they just…
Tessa: It’s not in the sleeping room?
Tessa: I thought it was in every… In the sleeping room.
Reuben: They say by sleeping rooms.
Reuben: I had a home I was at where they had it in the basement, the unfinished basement, and I said, “Well, that doesn’t need it, blah, blah, blah.” I wrote it up, made people fix it, and then I was overruled and they said, “That’s close enough.”
Tessa: Where was the Bedroom in the…
Reuben: First floor.
Tessa: Oh. Wow.
Reuben: And so basically I eliminate what George has said by the sleeping room. Now I just say you need to have a hardwired smoke alarm period.
Tessa: Hardwired smoke alarm. Okay.
Reuben: I don’t care where it is, ’cause nobody’s gonna back me up.
George: Well, and somebody probably deemed that to be an undue hardship on the home owner to then have to…
Tessa: To pay for hard-wiring.
George: Run a new wire to…
Reuben: Yeah, and if it’s undue hardship on the home owner, then don’t have it in the guidelines.
George: That’s why I was gonna say 99.9% of every home in the city of St Paul has one hardwired smoke alarm somewhere in the house.
Bill: Right, right.
George: Because this has been around since the 70s. So now, my issue with that is with one hardwired smoke alarm, no one ever changes a smoke alarm. I know that there are some smoke alarms that were installed in 1981, my doubt is, Well, if I push it, it makes a noise that passes the test. Whether actually…
Tessa: It works or not…
George: Alarms if there’s smoke around, I really doubt it but because it’s hard-wired and would require… No one ever changes it, so that’s my soap box.
Bill: Fun soap box. We’re gonna take a quick break and when we come back, we’re gonna talk a little bit about the changes that are on the horizon for Minneapolis.
Reuben: The Big changes yeah, big drum roll for that.
Bill: We’re talking all things TISHs, specifically in the City of Minneapolis because they’re making some changes to their program. And we just thought we’d have a discussion about what’s gonna be happening in the Y. So let’s get to it. Guys, what are the real changes?
George: Well, the changes are around energy and now we want the houses that are quite old to be a little more energy efficient. What they’re kind of comparing it to is a little like the miles per gallon thing. And when they first came out with the program, they noticed some of the TISH evaluators, and they had this list of things and they were going, “Yeah, yeah, we could do that, we could do that.” And it’s things like single pane windows without a storm window, they wanna know about that.
Tessa: We can document that.
George: Because we’re looking at…
Tessa: Yep, we’re already there.
George: What type of insulation, the depth of the insulation, it’s really just taking our current process and inspection and just adding a couple more things. We’re there anyway, why not…
Tessa: Adding a couple more data points o n the sheet.
George: Exactly, adding a couple of more spots of criticizing the home that’s already been hotly criticized, right?
George: This poor thing. It has been here for 100 years. He’s like, “No, now you got energy to worry about.”
George: So they had this list of things, let say it was a list of eight things. There were two items on this when they first tried it. One was they wanted us to do blower door test and that actually relatively quickly faded away because they realized that was a bit too much.
Reuben: Because somebody needs to pay for this…
Reuben: And it’s gonna be the person trying to sell their house. Yeah.
George: Yeah, what is a blower door kit? What is it, like 3500 bucks?
Bill: Well, they’re they’re expensive and not only that, there’s a lot of…
Tessa: Training, testing. Yeah.
Bill: Houses that are sold in the city each year. That would be a tremendous amount of work.
George: It would have been a lot of work.
Tessa: And yeah, it’s a lot of training to do it, to test right too.
Reuben: No, you just put it in the door and you turn it on Tessa, that’s all it takes.
George: And you get a number. You write down the number, ta-da.
Tessa: Great data you’re collecting.
George: It had nothing to do with actually finding air leakage, it had nothing to do with IR camera, it had nothing to do with an actual energy audit that would have been completed on a home, so they got rid of that one, now plus every evaluator, they would have to have a blower door tech.
Tessa: A blower door. So much equipment to carry.
George: It would be. And how long it would take. And how…
Tessa: Yeah. It takes a long time. Well, you have to prep the house and put the house in a state where you can do the test.
Reuben: So what, like an hour?
Tessa: Imagine having to go through, check every single window, make sure every window is closed, all the exterior doors, if you’ve got wood burning fireplaces, you have to mask tape them off seal them, making sure fans are, exterior fans that vent the outside are off. There’s a lot of prep work and then, doing the test, actually setting it up, getting the computer going and the program running, running the data points. If it’s a windy day, you could be there for easy an hour doing that.
George: Yeah, to their credit, they said that we’re gonna take it off the list, but I think their early estimates when they were saying like, “Well, we didn’t think you’d take any more… An extra half hour to do a blower door test,” and we all shook our heads. Then the last item was they want us to drill a two-inch hole in an exterior wall and determine what kind of insulation it is and how deep it is. And I think there’s a cross-roads. I mean, we were saying, “It’s not a good idea.” Did you ever drill a hole in wall?
Tessa: Yes, so the weatherization programs here in Minnesota that are around to help improve the energy efficiency of homes. I used to work for a company that did that. We worked with low income homeowners improving their houses. And part of the data that you gather for that testing is to drill a hole in an exterior wall, and see What type insulation is in there, and document it, and that goes into the database and that’s part of it.
George: And that affects the… That affects this That’s part of algorithm that then produces the score.
Reuben: So how many…
Tessa: Typically, we would drill in closets and then just put a plastic plug over the hole when you’re done.
Reuben: Okay, all right, so you drill in an inconspicuous area.
Tessa: Yeah. You try…
Reuben: You try to find a closet. What about underneath the kitchen sink? It seems like a pretty inconspicuous spot to me. It’s usually on an outside wall.
Tessa: That’s a good idea. I don’t think I ever did that.
Bill: I don’t like that because there’s pipe in that area.
George: Yeah, well, that did come up at the meeting, and we’ve all been in homes that been… Especially older homes that have been with the kitchen remodel.
Tessa: Oh, and they’ve redone the insulation in that wall, and it’s different from all the other walls.
George: Yeah, I mean, I’m happy to do the evaluations and I will, of course, dutifully drill the hole, but I just don’t know how valuable the information is. I think that’s what, if there’s frustration on an evaluator’s side, it’s, “I’m going to this great length to drill a hole in a stranger’s wall to what benefit?
Tessa: And you’re getting one sample point from one wall.
George: Exactly. Right.
Tessa: And you’re talking about houses that have had… That are 100-years-old that had tons of work done to them. You don’t know if they’ve re-insulated some spots and not others, or if they had additions or any of that.
George: All of these questions came up and we’re still gonna be doing the hole drilling. When changes like this happen, we’ll just sort of see how it works in the field. We’ll see how upset homeowners are or whether there is anything coming from this. It’s like, “Oh, you have fiber glass?” Look, when get a bunch of evaluators in a room, there’s always a dark side that it takes. Like, “What if they did this? What if they… ” Well, one there, there was…
Reuben: The worst case scenario…
George: It’s that… Well, We are bred to present the worst case scenarios to people. Everybody sort of have these hypotheses… One that I think other people thought of, we’re allowed to use a hole from a previous TISH inspection, so if they buy the home, they’re selling it two or three years later, we could use the same hole. If I’m smart…
Tessa: I’ll Stuff it with insulation.
George: I’m going to put insulation in the wall, a little square of fiber glass, fluff it, make it look like the whole wall is…
Tessa: That’s hilarious.
George: Maybe we shouldn’t… That shouldn’t be part of the podcast, I don’t know, that’s just sounds like, great but horrible advice.
Tessa: What if you drill into a wall and vermiculite spills out? Did that come up?
George: That, Oh yeah, that came up.
Reuben: Well, I was just… I’ve been wanting to ask you if that ever happened to you while you were drilling holes?
Tessa: I’m trying to remember. I mean, I did that for maybe like one year and I don’t think I ever had that happen.
Reuben: If that ever…
Tessa: But I also wasn’t aware of it and so I wasn’t really looking for that. I didn’t realize that it was an issue.
Reuben: If that ever happens to me, I’m running, screaming out of the house and I’m driving off. They’ll be wondering what happened. No just kidding.
George: Are you?
Tessa: We should put a link to our…
George: Are you?
Tessa: In our podcast once about asbestos.
Bill: Yeah, yeah, we don’t have to worry about that ’cause you’re not doing them ’cause you did zero in the last…
Reuben: Oh yeah, that’s right.
Bill: Yeah. It’s like, George did it again. The risk of vermiculite. 2020. Yeah, I’d like to think that those are gonna be the rare cases.
Tessa: So here’s another thing too, it’s like that’s just another data point. It’s a thing that’s gonna go on this TISH evaluation that one location that you’re measuring from, and then that goes to the person buying the house. Well, do you need a TISH evaluator to tell you that your 100 year old house doesn’t have any insulation in the walls, or has very little insulation in the walls? It’s not a surprise that an old house doesn’t have insulation like a new house does.
Bill: You can figure that out just standing at the outside and looking at the walls, right? You walk up to an old stucco house, you can tell if they’ve added insulation.
Tessa: You can see where they’ve drilled and filled. But I guess, the bigger question is, is maybe it’s just kind of a step in the direction of trying to get home buyers to be more concerned about energy efficiencies.
George: That’s exactly what it is…
Reuben: That’s exactly what it is.
Tessa: And to pay to upgrade their houses.
George: Yes, this is exactly what it is for. Yep. They’re trying to get an idea of what is the true total cost of ownership? I don’t blame them for that. They want to…
Tessa: Well then give them two years of… Require that the seller give energy bills.
Reuben: Oh that was brought up. Well, that was…
George: Oh, that was and, but…
Tessa: Was it. It’s not even an accurate way of testing either.
George: It isn’t.
Tessa: ‘Cause every homeowner sets their thermostat at a different temperature and is out of town for a different amount of time.
George: Exactly. And you have kids going off to college at different times and then all of a sudden you’re just one person in the house.
Bill: So, Reuben, off the top of my head, I’ve got several questions that I’m wondering about the TISH program. So let’s start with the why. What’s the purpose of this?
Reuben: Minneapolis enacted this big… What do you call it, George? It’s a…
George: You mean, commercial?
Reuben: Energy program.
George: I think they did it at the commercial property level and now they’re just kind of bringing it into the residential property.
Reuben: Yeah, the whole reason for that was this big pledge, this big commitment that Minneapolis made to reduce the carbon footprint for the entire city. And I don’t remember what the deadline is. I don’t remember it right off the top of my head, but they’re…
George: Three weeks?
Reuben: It’s something that’s gonna happen over the like next 10 years or something.
George: Well, it’s… I think it’s part of the… Is it part of the Minneapolis 2040 plan?
Reuben: 2040. That might be it, okay, maybe over the next 20 years.
Bill: Well, kudos to them. I mean, it’s good to bring it into the forefront.
Reuben: Yeah, yes, this is definitely a good thing.
Tessa: A step in the right direction.
Reuben: We’re gonna be responsible and we’re gonna reduce energy consumption and figure out, What are we gonna do to affect residential energy consumption? And they figured we’re already gonna go into… I mean, what is it George, 5% of homes turn over, every year in Minneapolis or something like that?
George: I think so, yeah. Yeah.
Tessa: Oh, wow.
Reuben: And so, we’re gonna be able to get into 5% of the homes every single year. We’re already getting in there. Let’s start collecting some energy data. So that’s why this is even happening. And the idea is that once people are aware of this like you’ve mentioned in our last segment, Tessa, once people are aware of this, they’re gonna start taking steps to improve it. Let’s make that really clear. There is never anything that’s required because of this energy audit program that’s being added on a TISH.
Bill: That’s a very good…
Reuben: This is only disclosure.
Tessa: Yes, good point.
George: That’s a super duper good point. I think Bill kind of touched on it. The whole repair or replace idea. Minneapolis does have that, there are certain items that are required to be repaired by either closing or assumed by the buyer at closing, but none of these energy evaluation… This part of the energy evaluation is required to be corrected.
George: Upgraded. It’s really, that you were mentioning, it is more of an awareness.
George: Like, just, getting people to understand.
Tessa: Education. Yeah.
Bill: And a data grab to some degree.
George: Yeah, and I don’t mind that, I’m a fan of data. That’s a… Bring on as much as you can. I just want it to be a accurate.
Bill: Okay. All right. So, we’re gonna do a few other steps. What’s this gonna do to the price of a normal TISH?
Reuben: We’ve been kicking that around. We don’t know exactly. Right now, our standard fee for a single family home is $200. We expect this is gonna bring it up to 300.
Tessa: How much of that is labor costs and material costs, if we’re drilling the hole.
Reuben: All of it.
Reuben: All of it. It’s all the additional data that we need to collect. It’s bringing a drill in, it’s bringing a vacuum in…
Tessa: And the plug, getting everything set up.
Reuben: The plug, cleaning up the mess, we’re gonna use the Walabot Wall Scanner before we drill a hole to make sure that there’s no wires or pipes or anything else behind the hole that we’re drilling. And then we gotta calculate square footage, take an inventory of…
Tessa: They’re asking you to calculate the square footage.
Reuben: Yeah. Right.
George: They wanna know the insulated attic area. So on a story and a half, which I hear both of you are huge fans of…
Bill: Love them.
Tessa: Love calculating square footage of those attics too right, Bill?
Bill: That’s right. We need a volume meter or something like that.
Tessa: Yeah. Send in a bot.
Bill: You can just walk into a room and it, “Woot.”
Reuben: So, and I think they’re… So the new wall portion…
Reuben: That’s gonna be insulated in the interior. And then, how do you calculate the smaller part? They’re kind of okay, which is sort of being rough about it, but they want that square footage calculated.
Bill: This is part of the additional stuff that…
Reuben: That it’s gonna take us. So I mean initially, we typically get scheduled to be at the property for an hour. Starting out, we’re probably gonna schedule ourselves for two hours. I mean, we’re gonna double our allotted time to be there because of this. I think that once we start to get this down, maybe…
George: An hour and a half?
Reuben: It’s only gonna be a 50% increase in time and that’s what we’re shooting for, is a 50% increase in time which is gonna equate to a 50% increase in cost. And I think, we’re being conservative with that.
George: The time or the money? I think both.
Reuben: The money. I’m afraid that we’re not charging enough but I don’t know, we’ll give it some time.
Tessa: A trial run maybe?
George: What other questions are people asking?
Reuben: Well, they wanna know… Well, we already talked about how much time it’s gonna add, people have been asking that.
Bill: When it starts?
Reuben: When it goes into effect? It was January 1st.
George: It’s January 15th.
Reuben: Yeah, they changed it. They pushed it back a couple of weeks.
George: And they get to the point where they said, “Anybody that submits a TISH, anything submitted by 11:59 on the 14th will be the original. If you submit right after that, it is the new guidelines.
Reuben: Yes. If you’re thinking about selling your house in Minneapolis in the next two years, Truth In Housing evaluations are good for two years.
Reuben: So if you’re thinking about selling your house in the next two years and you don’t wanna have the energy audit portion done, you don’t want to have a hole drilled in your wall, now would be the time to get a TISH evaluation.
George: Now would be… Now would be the perfect time. I will clear my schedule.
Tessa: You’ve got four weeks.
George: I will clear my schedule to do TISHs over Christmas…
Reuben: Yeah, you got…
Tessa: Yeah, four weeks.
George: I’ll do Christmas day.
George: I will do…
Bill: It’s a Christmas TISH.
George: Well, I’ve already had one TISH earlier this week. I talk with people. I said, “So when are you putting that on the market?” And he said, “Ah, Probably next spring,” he goes, “But I want to get ahead of this whole TISH thing that’s happening.”
Tessa: He knew that about it?
George: Yeah, he knew about it.
George: So he was the smart one.
Tessa: Was he an engineer?
George: No. Just a smart consumer.
Bill: So my guess is, you guys will have most of the answers. So if a consumer wanted… Like a home owner in Minneapolis had questions about this program, where are they best to get their information from? Should they call the company they’re gonna hire to do the TISH or do they call the city directly or…
Reuben: Neither of one of us have that at our fingertips but we’ll put it on this podcast.
Reuben: Wherever you find this podcast, we’ll put the phone number in there because…
George: You’re talking about a city contact or just…
George: We should really have the answers for that. If they have just general questions about price and when and what we do?
Reuben: Oh, I want people to call that phone number that Minneapolis wants them to call.
George: Oh, all right.
Reuben: I mean, they said it like ten times.
George: Jam lines. Yeah.
Reuben: Call this phone number with any questions about the whole thing.
Bill: Okay. So there’s resources in place to answer their questions?
Reuben: They’ve got two people dedicated to answer all questions.
Bill: Awesome, great.
Bill: All right, it sounds like fun. Can’t wait for January 15th, 2020.
George: Can I add one more thing to that before we wrap it up there?
Bill: Yeah, Sure.
George: Also, if you want to avoid the TISH portion, if you have a home energy audit performed within the last five years…
Tessa: That works.
George: That passes for the energy portion of the TISH. You still have to do the rest of the TISH.
Reuben: And for that energy audit, I was curious what that was.
Bill: So was I.
Reuben: It was just like the little cheap one. No, it’s gotta include drilling a hole in the wall and a blower door.
Tessa: A Blower door. Yeah.
Bill: Yeah, you’re not…
Reuben: You can’t get around the hole in your wall.
Bill: Right, sounds great.
Reuben: A hole.
Bill: Thanks everybody for listening. You’ve been listening to Structure Talk. We’ll catch you next time.
Tessa: That’s awesome.