Not Your Average Hero: The complexities and concerns of the Home Energy Renovation Program

Not Your Average Hero: The complexities and concerns of the Home Energy Renovation Program

S. E. Williams

When retired educator and long-time Riverside resident Henry Blanco passed away last November at the age of eighty-five, few foresaw that the probate process required to settle his estate would be complicated by a H.E.R.O. lien attached to his property. 

The Home Energy Renovation Opportunity program or H.E.R.O. is administered under the auspices of the Western Riverside Council of Governments (WRCOG) in partnership with the San Diego based Renovate America which administers H.E.R.O. funding under the residential Property Assessed Clean Energy (P.A.C.E.) program. 

Broker Mike Teer of Teer One Properties, Inc., recently confirmed to The Voice that Blanco contracted to have work done on his property through the H.E.R.O. program that totaled more than $31,000, plus an additional $3,500 per year in interest. The assessment amount was added to Blanco’s property taxes in June, 2016. Sadly, Blanco died within five months of the project’s completion. 

Both Teer and the estate’s administrator, inspected the Blanco property after his death. According to Teer, “The Administrator nor I could identify work done on the property that would justify this expense.” 

The Voice asked National Communications Director and Spokesperson for Renovate America, Greg Frost, about this case. 

Frost confirmed his agency was in the process of investigating the Blanco scenario. “We would not fund [the contract] unless we had a completion certificate,” he assured. “We have a completion certificate [signed by Blanco] dated June 8, 2016.” 

According to Frost, his agency learned about the Blanco case in mid-March and assigned it to a compliance officer. He explained, “The officer believes the work on the outdoor patio cover was done to a high standard.” He added, “The pricing on that project was slightly above the average we see for this sort of project—likely the result of the two ceiling fans that were added to the project.” 

He continued, “The other aspect of the project was the application of Life Paint to the exterior walls—an energy-efficient exterior wall coating that has been engineered to last longer than conventional paint, eliminate color fade, and save energy by reducing heat absorption.” It is this quality that makes it applicable under the P.A.C.E./H.E.R.O. program. 

“The officer’s investigation of this aspect of the job is not yet complete,” Frost further clarified. “She is meeting a Life Paint representative at the house [Blanco’s house] Thursday morning [March30] to get an official assessment of whether the product was correctly applied.”

This Blanco scenario begged critical questions in relation to the H.E.R.O. program including whether local seniors (and others) truly understand how H.E.R.O. assessments work; and the impact such assessments can have on their property. It also reignited concerns over the quality of work performed by H.E.R.O. contractors; and the kind of oversight built into the H.E.R.O. process to insure the quality of work performed under its auspices. To this end, Frost also confirmed to The Voice, “The contractor who did the work, Yes Electric and Construction of Van Nuys, was suspended from the H.E.R.O. Program in November 2016.” 

Blanco stressed, “The point here is that other home-improvement forms of financing simply would not go to the lengths to which we are going, to investigate and potentially resolve an issue like this. This approach is also at the heart of the new Contractor Quality Rating system we are rolling out that uses data and analytical tools and protocols to manage contractors.” 

He continued, “Through this system, we will be driving more business to contractors with excellent service. In addition, we can detect patterns and mitigate poor contractor performance, taking appropriate action that may include re-training, suspension, or permanent removal from the program.” 

In 2015, in response to complaints about the H.E.R.O. program that included allegations of price gouging and the poor quality of work performed by some contractors, The Voice published a two-part series titled, “Tarnished Hero” that explored the program in detail. 

WROG is a Joint Powers Authority with representatives from 17 local cities, the Riverside County Board of Supervisors and others. It provides the inland area with a collective voice on important regional issues. Renovate America, is the leading provider of residential P.A.C.E. financing in the United States. 

The public-private partnership between WRCOG and Renovate America/P.A.C.E. is the foundation of the H.E.R.O. program. P.A.C.E. is authorized to fund energy efficient and renewable energy improvements on private property. 

When California’s AB811 was enacted in 2008; it authorized cities and counties to designate areas where property owners can enter contractual assessments to finance the installation of distributed renewable energy systems. Distributed renewable energy systems generate clean, renewable electricity at the location where the energy will be used. The most common example is solar panels. Water efficiency was included in 2009. 

More than ten million Californians across thirteen counties including Riverside and San Bernardino have access to the H.E.R.O. program. The legislation also authorized funding be extended to other improvements in energy efficiency provided such improvements were permanently attached to the owner’s property— this included windows, new heating and cooling systems, light improvements, insulation, etc. 

The funding is provided through low interest assessments that must be repaid as part of the owner’s property tax bill over a period of years— funding is only available if the property owner agrees to a contractual assessment. In other words, to participate in the program, a homeowner must agree to repayment via their property tax bill over a period of between five and twenty years. In addition, the homeowner must be current on his/her mortgage and property taxes; have a clean title; and the interest rate must be fixed. 

Applicants are not required to put any money down and interest on the assessment is tax deductible. The H.E.R.O. assessment, interest and penalties remain as a lien against the property until the assessment is paid in full. The lien must take priority position when recorded against the title. 

In August 2015, in response to growing complaints related to allegations of price gouging and/or poor quality work on the part of contractors participating in the program, H.E.R.O./P.A.C.E. administrators launched, H.E.R.O. Protect—a service offered at no charge to all homeowners who participate in the program. It provides information about contractor performance, dispute resolution and investigative services. It also forwards information to law enforcement agencies as required.

When implemented, officials hoped it would go a long way toward helping to mitigate some of the concerns experienced by program participants. The initiative has resulted in the suspension of contractors with inactive licenses from program participation; as well as the suspension of dozens of individuals and contract companies for violations of the program’s Code of Conduct. Despite this effort—the program continues to be plagued with concerns.

The California Association of Realtors (CAR) once described H.E.R.O. assessments as, “unfairly expensive, with interest rates that border on predatory, where even basic lending guidelines for consumers are ignored, and which are often sold by high pressure door-to-door sales people.” 

In 2015, Riverside County Deputy District Attorney Raymond Ramirez revealed he was investigating the way consumers were being sold energy-efficient products through the H.E.R.O. program. “We’re inquiring about the program itself,” he revealed at a meeting of the Inland Valley Association of Realtors in Riverside that June. “The investigation is between the contractor and homeowner, and whether protections are present for the consumer.” The Voice made an inquiry to the Riverside District Attorney’s office regarding the status of this investigation. Public Information Officer John Hall responded, “At this time, there is no update.”

In October 2015, Reuters reported how some homeowners trying to sell their houses in California, were finding it difficult because they found “potential buyers scared off by the higher tax assessments.”

Governor Jerry Brown signed CAR sponsored legislation, AB2693, into law in September 2016. The law was designed to minimize opportunities for the abuse of H.E.R.O. The new consumer protection law required a detailed financial disclosure document be presented to every property owner who participates in a P.A.C.E. program including H.E.R.O. 

The disclosure document includes a plethora of notices and warnings—including notice that the property owner may not be able to refinance or sell without paying off the P.A.C.E. obligation. In addition, the law included a three-day rescission right among other notices and statements. Sadly, AB2693 did not become effective until January, 2017—too late for Mr. Blanco. 

In November 2016, a Los Angeles resident filed suit against Renovate America and SANBAG (Michael Richardson v. County of Los Angeles et al., case number BC639230). It alleged “predatory characteristics” and a “pervasive pattern of false, deceptive and otherwise unlawful practices” regarding H.E.R.O. The plaintiff claimed the company uses false and deceptive means to carry out the program, including excessive fees and costs based on inflated interest rates. The plaintiff also alleged H.E.R.O. fails to credit borrowers for making payments in a timely manner. The suit claimed violations of the Truth in Lending Act and the Home Ownership Protection Act, among other concerns. The suit is currently seeking class action status. 

According to Frost, “Renovate America has filed a motion to dismiss virtually identical lawsuits brought against it by a firm that specializes in trying to create class action suits. The cases have been combined into one case that is pending in the U.S. District Court in Southern California.” 

The frenzy of frustrations that surround the H.E.R.O. program as expressed by some, coupled with complexities inherent in how H.E.R.O. assessments work, appear to reinforce concerns expressed by CAR, Teer and others regarding the need to better educate consumers about the H.E.R.O. program—particularly seniors like Blanco. 

“Marketing this property has truly been impacted since almost the entire lien balance is due or assumable,” Teer shared regarding the Blanco house. This is because any potential buyer would be required to assume responsibility for the outstanding balance of the H.E.R.O. assessment levied against the property ($31,000 plus interest and penalties); or, the estate must pay the balance in full, even though work completed on the property, in Teer’s professional estimation, does not justify the $31,000 Blanco was charged by the contractor. 

Frost was asked whether the program conducted inspections to assure contractors’ work met standards. He explained, “A random five percent of projects are inspected by an independent 3rd party who verifies via a visual check whether the work was actually completed.” 

“One of the key consumer safeguards that comes with H.E.R.O. financing is that all contractors must agree to not be paid until the homeowner signs off that the job has been completed to his or her satisfaction.” Frost continued. “What this means in practice is that we won’t fund the project until we have what’s called a completion certificate, signed by the homeowner. And we won’t record the HERO assessment on the property until we fund the project.” He concluded, “If there’s a HERO assessment on a property, it means that the homeowner signed off that the job was completed to his or her satisfaction.” As detailed above, in this instance, Blanco signed a completion certificate on June 8, 2016. 

According to Frost, when a property encumbered with a H.E.R.O. lien is placed on the market, Renovate America has a dedicated team of real estate professionals on hand to assist sellers and their agents in the sale or refinancing of homes with HERO assessments. 

Frost explained, “This team can assist with a variety of options, including full assumption of the remaining H.E.R.O. payments by the new owner, subordinating H.E.R.O. to the new mortgage (if required by the lender), or even negotiating paying down the remaining H.E.R.O. balance.” 

Frost added, “In the case of an assessment on a home in which the owner has died, the estate could use the proceeds of the sale of the home to pay off the assessment (just like paying off a mortgage or a home equity loan) if for some reason the new owner did not want to assume the remaining HERO payments; this would be part of the overall negotiation between the estate and the new buyer.”

Next week The Voice will continue this report.

About The Author

Dr Main Sidebar


A powerful Creative and Critical Thinking exercise is to first learn shapes of the Pyramid, Square, Trapezius, Trapezoid, Rectangle, Triangle, Circle, Octagon, Ellipse, Lunette; study which are Cosmic and/or and human-made; and determine what are indications for using...


Patterns, Shapes, and Forms are fundamental tools to help one see and give meaning to Real, Surreal, and Unreal Things. These contribute to understanding and the explaining of Principles (unchanging realities), Events (changing realities), Settings, Situations, and...


“ME/WE” is an: "All for One, One for all" concept of African Zulus, called Ubuntu. The Nguni Bantu define it as connection of all “Humanity”—meaning its “Sameness” creation is the Cosmic Force. They translate it as: “I am because we are”; or “Humanity towards others”...

Share This