John M. Lee: Water Conservation Ordinance

In an effort to help with a perpetual water shortage and to conserve water, the San Francisco Board of Supervisors has passed, and Mayor Gavin Newsom has signed into law, amendments to the City's Water Conservation Ordinance effective July 1, 2009.

The amendment expanded the scope of retrofit work required under the existing 1991 ordinance when a specific event such as a transfer of title occurs. Under the amendments, the following water conservation measures are required for residential buildings: "Water efficient showerheads having a maximum rated flow of not more than 2.0 gallons per minute at a flowing water pressure of 80 pounds per square inch and faucets and faucet aerators having a maximum flow rate of 1.5 gallons per minute at a flowing rate of 80 pounds per square inch. In addition, all toilets having a rated flush volume exceeding 1.6 gallons per flush must be replaced with models that are rated at a maximum flush volume consistent with the maximum flush volume established in the San Francisco Plumbing Code, Chapter 4, Section 402.2, as it may be amended (currently 1.6 gallons per flush)."

In addition, sellers must locate and repair all water leaks.

The amendment does not change the basic structure of the ordinance as a form of water conservation was already required, but it does tighten up the standards and puts more burdens on sellers to adhere to the requirements or otherwise leave one percent of the purchase price in escrow until the work has been completed. The technical specifications are spelled out, but there are two new requirements in the law.

First, the seller must locate and repair all water leaks. For one- and two-unit residential buildings, water meter registration shall be used to confirm the existence of leaks. For three or more unit residential buildings, the seller may comply either by ensuring no meter movement for 10 minutes while all household features are shut off, or by completing a visual inspection for leaks.

In addition, in all residential buildings all tank-type toilets shall be tested with leak detector tablets or a dye to detect slow valve leaks, and all flushometer-type fixtures shall be visually checked for proper operation with respect to timing and leaks.

Second, the seller may transfer responsibility for compliance with both the minimum energy conservation measures and the minimum water conservation measures to the buyer of the building if, at the time of transfer, certain conditions are met, including but not limited to withholding one percent of the purchase price in escrow to pay for the required conservation measures within 180 days after the recordation of title.

Previously, the ordinance only permitted this transfer for the minimum energy conservation measures.

There are certain exemptions to this ordinance, including transfers pursuant to a court order; transfers to a mortgagee by default; transfer by a fiduciary representative in the course of the administration of a trust; transfers from one co-owner to one or more co-owners; transfers made to a spouse or domestic partner; and transfers resulting by legal mandates.

While supporting water conservation is a good and noble goal for our society to follow, the method of requiring compliance at time of transfer might not be the best idea. There are approximately 165,000 residential parcels in the city of San Francisco, and an average transfer rate of 6,000 to 8,000 parcels per year. At this rate, even if every parcel transfers once, it would take more than 23 years to bring every building into compliance.

We know that many buildings stay in the family and never transfer, so a better solution would have been to require every building to conform to the new requirements and offer financial incentives that will mitigate the expense. With this approach, in the long run, everyone wins.

But, at the moment we have a new amended water conservation ordinance in place, and sellers and our government officials are developing the procedures and paperwork necessary to implement the new process.

So, if you are contemplating a sale, please keep this new law in mind.

John M. Lee is the incoming president of the San Francisco Association of Realtors. He specializes in the Richmond and Sunset districts. If you have any questions, call him at (415) 447-6231 or send an e-mail to johnlee@isellsf.com.