Chico’s RECO Inspection: What Sellers of Older Homes Must Fix Before Closing

If you own a Chico home built before July 1, 1991 and you’re getting ready to sell it, the city almost certainly requires an energy and water conservation inspection before escrow can close — and a set of specific repairs if that inspection turns up problems.

This is Chico’s Residential Energy Conservation Ordinance (RECO), officially the Residential Retrofit Program under Chapter 16.60 of the Chico Municipal Code (CMC), and it has nothing to do with state disclosure law; it’s a city-only rule that only applies inside Chico’s limits.

Other California cities run their own versions of this idea — Berkeley’s own time-of-sale energy ordinance works differently, with different measures, different costs, and a different inspection process, so a Chico seller who has heard about a neighboring city’s rule should not assume the details transfer.

Why Chico Has a Point-of-Sale Retrofit Law in the First Place

The City of Chico enacted RECO in 1991 and amended it in 2010, and the stated purpose in CMC 16.60.010 is to require residential housing that’s sold, exchanged, or otherwise transferred within the city to carry ceiling insulation and other minimum energy conservation measures.

The thinking, laid out in the city’s own program materials, is straightforward: a change of ownership is the one predictable moment when a home’s efficiency problems are likely to actually get fixed, rather than quietly ignored by whoever happens to own the place.

Chico was incorporated in 1872 and grew from roughly 88,874 residents in 2010 to 101,475 by the 2020 census, which is exactly the kind of older housing stock that keeps producing pre-1991 homes changing hands every year. Chico is also the largest city in Butte County, even though Oroville is the county seat.

The program is administered by the Building Official within Chico’s Community Development Department, with day-to-day questions routed to the Program Administrator at RECO.Administrator@chicoca.gov or (530) 879-6820, out of 411 Main Street, 2nd Floor.

Nothing about RECO is optional — CMC 16.60.090 actually requires that any agreement to sell, exchange, or transfer covered residential housing include a written provision telling the buyer the transfer may be subject to Title 16 of the Chico Municipal Code and is prohibited unless and until the Building Official has certified compliance.

The July 1, 1991 Cutoff and the 10-Year Compliance Lookback

RECO applies to a sale, exchange, or other transfer of a legal or equitable interest in residential housing — including condominiums, stock cooperatives, and apartment units — whenever that transfer gives the buyer the right to possession (CMC 16.60.060, 16.60.070). The ordinance only reaches a property under two conditions working together.

First, the home has to have been built under a building permit issued before July 1, 1991. A home permitted on or after that date is outside RECO entirely, full stop, under CMC 16.60.080(A).

Second, the home must not already hold a valid Certificate of Compliance issued within the preceding 10 years under CMC 16.60.080(B).

If a previous owner retrofitted the house and got certified within the last decade, the obligation doesn’t reset just because the house is changing hands again — the certificate travels with the property until it expires.

In practice, that means the first question for a Chico seller isn’t “does my house need work,” it’s “when was my house permitted, and do I already have a certificate on file.” The city posts current Certificates of Compliance sorted by both address and APN, so a seller or agent can check before ever scheduling an inspection.

The Nine Items an Inspector Will Actually Check

CMC 16.60.100 lists the exact energy and water conservation standards a pre-1991 home has to meet before it can legally transfer. These are the nine measures a City-Certified Energy Conservation Inspector will look for, in the order the ordinance lists them:

1. Attic insulation rated at least R-30 in any attic space with 30 inches or more of headroom at the peak. Where headroom is under 30 inches, this item is simply not required.
2. Caulking, weatherstripping, or sealing of major cracks, joints, and other openings in the exterior — around doors, windows, plumbing vents, pipes, wiring, and furnace flues — anywhere air can leak between conditioned and unconditioned space.
3. Low-flow sink and lavatory faucets, capped at 2.75 gallons per minute, or an aerator fitted to the existing fixture.
4. Low-flow shower fixtures — either an in-line restrictor or a low-flow showerhead — capped at 3 gallons per minute, with narrow exceptions for fixtures that already flow below that rate due to low water pressure, or ball-joint showerheads built into the wall.
5. Low-flow toilets rated at 1.6 gallons per flush or less, unless the Building Official determines that swapping a particular toilet isn’t feasible.
6. Programmable thermostats, wherever installing one is feasible for the home’s existing HVAC setup.
7. Insulation on exposed cold water lines within five feet of the water heater, and on hot water lines running through unconditioned space, at a minimum R-3 rating.
8. An external insulation blanket rated at least R-6 on the water heater itself, unless the tank’s internal insulation is already R-12 or better, the clearance to an adjoining wall is under two inches, or the manufacturer’s instructions prohibit wrapping the unit.
9. A visual inspection of accessible ductwork to confirm it’s intact and functioning — this item doesn’t require repair work by itself, just documentation of condition.

Most of these are inexpensive by themselves — an aerator or a water heater blanket is a hardware-store purchase. Attic insulation is the item most likely to involve real labor cost, which is why the ordinance builds in a spending ceiling rather than requiring every item unconditionally.

Running the $800 Math Before You Call a Contractor

CMC 16.60.110 caps what a seller can be forced to spend, and it’s worth walking through mechanically because the brochure version and the code version use slightly different framing for the same rule. Here’s how it actually works for a seller sitting down to figure out their exposure:

1. Start with attic insulation. R-30 ceiling insulation (where headroom allows) has to go in no matter what it costs — there’s no dollar exception for this one item.
2. Add up what the insulation work costs. If it comes to $800 or more for a detached single-family home (or $560 or more per unit for a duplex, triplex, or larger multi-family property), you’re done — no further measures from the list of nine are required.
3. If the insulation costs less than $800 (or $560 per unit), the remaining balance up to that cap gets spent on the other eight measures, taken in the order the ordinance lists them, unless the Building Official approves a different sequence because it achieves better energy conservation or because an item simply isn’t feasible on that house.
4. Once total spending across insulation plus the additional measures hits $800 (single-family) or $560 per unit (multi-family), the obligation stops, even if items further down the list haven’t been addressed yet.

A seller whose attic already has solid insulation can sometimes clear the entire checklist for well under $800 in parts and a few hours of handyman time.

A seller whose attic has none, or has degraded insulation that needs to be pulled and replaced across a large footprint, can hit the $800 ceiling on insulation alone and walk away owing nothing further on the other eight items.

Either way, the number is fixed: the ordinance never requires more than $800 total on a single-family home, or $560 per unit on multi-family property, with insulation as the one line item exempt from that ceiling.

Who Actually Performs the Inspection, and What It Costs

Inspections have to be done by a City-Certified Energy Conservation Inspector — a current list is posted on the city’s Residential Retrofit Program page, and it can be combined with a regular home inspection rather than scheduled separately.

One detail that trips sellers up: the city does not set or collect the inspection fee. That’s a negotiated cost between the seller and whichever certified inspector they hire, so prices can vary and it’s worth getting more than one quote if the attic is hard to access.

Once the inspector finds the property compliant, they file a declaration with the Building Official, and the city issues a Certificate of Compliance — valid for 10 years, and something a future seller can point to instead of going through the process again.

If the inspection finds the home out of compliance, the inspector’s report identifies each noncomplying condition, the owner does the work, and a certified inspector has to sign off a second time before the city will issue the certificate.

Other California cities run their own point-of-sale inspection gates before a deed can record; the sewer lateral and sidewalk certificates Oakland requires before escrow can close are a useful comparison for how differently two cities structure the same basic idea: fix it now, or document why you don’t have to.

Handing the Obligation to the Buyer Instead of Fixing It Yourself

CMC 16.60.150 gives sellers an alternative to doing the retrofit work before closing: a Transfer of Responsibility agreement.

If the seller and buyer mutually agree, and the Building Official approves the arrangement — approval isn’t automatic, it’s at the official’s discretion — the buyer signs an agreement with the city acknowledging the specific noncomplying conditions and committing to fix them within 180 days of the date the transfer occurs, or a later date the Building Official approves for good cause. The city publishes a standard Transfer of Responsibility Agreement form for exactly this purpose.

This option matters most on a tight closing timeline, where a seller doesn’t want to delay the sale waiting on contractor schedules, but it only works if the buyer is willing to take on the job and the Building Official signs off.

A buyer with their own renovation plans for the property is often the easiest candidate, since the RECO items overlap with work they were going to do anyway.

The Nine Categories That Get a Sale Out of RECO Entirely

CMC 16.60.080 lists transfers the ordinance simply doesn’t reach, and every exemption has to be requested from and approved by the Building Official through the Program Administrator — none of these are self-executing just because a seller believes they qualify:

1. The home was constructed under a building permit issued on or after July 1, 1991.
2. The property already carries a Certificate of Compliance issued within the preceding 10 years.
3. The unit is a factory-built, manufactured, or mobile home, as defined under the relevant provisions of the California Health and Safety Code.
4. The sale or transfer happens pursuant to a court order — probate administration, a writ of execution, judicial foreclosure, bankruptcy trustee sales, or a decree for specific performance all fall here.
5. The transfer results from a default — a sale to a mortgagee by a defaulting mortgagor, a transfer to a deed-of-trust beneficiary by a defaulting trustor, or a nonjudicial foreclosure sale.
6. The transfer moves the property from one co-owner to one or more of the other existing co-owners.
7. The transfer is to a spouse or to a person in the transferor’s direct line of descent or ancestry.
8. The transfer happens between spouses as a result of a divorce decree, a legal separation decree, or a property settlement tied to one of those decrees.
9. The sale is a short sale — meaning the buyer’s purchase price is less than the debt secured against the property.

A seller who believes one of these applies still has to go through the city — submitting a request for review to the Program Administrator, who issues a written exemption letter once the Building Official confirms it qualifies. Assuming an exemption applies without that letter is the kind of thing that surfaces at the worst possible time, usually when escrow asks for the paperwork.

What Happens If You Disagree With the Building Official

Every RECO determination can be challenged. Under CMC 16.60.030, anyone aggrieved by a determination or action of the Building Official — defined broadly enough to include an owner, a transferee, or an occupant — can file a written application for administrative review with the Community Development Director.

That application has to be filed within 15 calendar days of the determination (or the date a required report was served), though the Director can extend that deadline for good cause.

The Director may convene an informal hearing before ruling, and the decision either affirms, reverses, or modifies what the Building Official did.

If the Director’s decision still doesn’t resolve things, CMC 16.60.040 allows a further appeal to the Chico City Council, following the general appeal procedures in Title 2 of the Municipal Code.

In practice, most disputes never get past the first step — a direct conversation with the Program Administrator’s office often resolves a disagreement over, say, whether a particular shower fixture already qualifies for the low-flow exception, before a formal review is necessary.

When Listing With an Agent Beats a Cash Sale

It would be easy for a company in this business to say a cash sale is the obvious answer to RECO. That isn’t always true.

If your home was permitted after July 1, 1991, or you already hold a Certificate of Compliance from a retrofit done within the last decade, RECO doesn’t apply to you at all — there’s no retrofit cost to avoid, so the main reason a time-pressed seller reaches for a cash buyer isn’t present here.

The same goes if your situation matches one of the nine exemption categories: a short sale, a transfer between co-owners, or a probate sale, for instance.

In those cases, listing with an agent and running a normal marketed sale will usually net more than a direct cash offer, because the property’s RECO status was never going to slow down escrow.

The math changes when the retrofit items are genuinely cheap. If your attic already has decent insulation and the inspector’s list comes back as a $150 aerator, a $40 water heater blanket, and some caulk, the fix is a weekend project, and listing traditionally will usually net more.

A cash sale tends to make more sense in the harder case: an attic with no insulation at all, plumbing that complicates the low-flow swaps, or a seller who can’t front $800-plus and wait weeks for a second inspection before a lender releases escrow.

It comes down to how large your actual RECO bill is likely to be.

Sellers across California raise a consistent set of objections to as-is cash offers, and the honest answer is usually the same: it depends on what fixing the problem would cost you, measured against what a marketed sale would net.

Chico’s RECO rules are detailed and compliance can take real time to arrange, especially if your inspector’s first visit turns up an attic that’s never been touched or a water heater installation that complicates the blanket requirement.

If you want a no-obligation cash offer from a buyer who understands pre-1991 retrofit requirements, Cash Home Buyers CA can make one and work around your timeline — including selling your Chico house as-is without arranging a certified inspection or a retrofit yourself.

We buy directly or bring a vetted cash buyer, and when you sell to us, we pay the standard closing costs, including the county and city transfer taxes, escrow and title.

You can also find our Google Business Profile if you’d like to see more about who we are.