The City of Berkeley is updating their BESO (Building Emission Saving Ordinance) program, and the changes will be effective January 1, 2026. This is a summary of the changes that sellers and Realtors need to keep in mind.

Time of Listing
Previously, BESO required a Home Energy Score at time of sale, but the seller was able to be defer this requirement to the buyer. This deferral has been eliminated, and now the Home Energy Score has to be completed by the seller, and the Home Energy Score (scores range from 1-10) has to be posted on the MLS listing. If the seller fails to get the score before time of listing they will be subject to a $500 noncompliance fee.

Building Upgrades Required
BESO now requires energy upgrades to be performed, and these upgrades can be performed by either the seller or the buyer. The process is different depending on whether the buyer or seller does the work, but in both cases, upgrades need to be performed to gain at least 6 credits in the “Flexible Resiliency Standard” below. For a seller, upgrades (except for heat pumps) have to completed within the last 5 years, and proof in the form of a finaled permit is required.

Process: Buyer Performs Upgrades

  1. Seller completes assessment (Home Energy Score)
  2. Home listed for sale, selling agent discloses the Home Energy Score on MLS listing
  3. Both the buyer and seller submit a $2,500 Resilience Upgrade Deposit to escrow, which will get sent to the city at close of escrow
  4. Buyer completes upgrades (maximum 2-3 years)
  5. Buyer submits application and $150 submittal fee for a Compliance Certificate
  6. Buyer receives Compliance Certificate and submits BESO Refund Claim Form to receive $5,000 refund

Process: Seller Performs Upgrades

  1. Seller completes upgrades
  2. Seller completes assessment (Home Energy Score)
  3. Seller submits application and $150 submittal fee for a Compliance Certificate
  4. Seller receives Compliance Certificate and includes it in closing documents
  5. Fully compliant, no deposit or additional upgrades needed

Exemptions

  • ADUs and condos
  • 3-4 unit buildings (until they are phased in starting in 2028)
  • All-electric homes with proof that the gas line has been capped
  • Refinances, partial and inheritance transfers
  • First time homebuyers that qualify for:
    • California MyHome Assistance Program
    • CalPLUS FHA Program
    • CalPLUS Access Program

Final Thoughts
Sellers are now required to perform a Home Energy Score or pay a $2,500 non-refundable deposit into escrow. If sellers don’t want to “lose” $2,500, it might be worthwhile to do one of the cheaper upgrades, such as installing a heat pump water heater, which will make the home complaint and will have the added benefit of saving the buyer $2,500 that would otherwise have to go into escrow. While a heat pump water heater is one of the cheaper upgrades, it will likely cost more than $2,500, and restrictions, such as lack of space and older electrical systems, could increase the prices considerably.

At a minimum, seller’s agents should discuss the 6 credits needed for the Flexible Resiliency Standard to see if it makes sense to do upgrades as part of preparing the home for sale – it could be cost effective and make the home more attractive to buyers.

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