Tarion: Friend or Foe?

By: Barbara Captijn

Tarion: Friend or Foe?

Regulatory agencies exist to protect the public, not the industry they are supposed to be protecting the public against. 

Is Tarion Warranty Corporation doing its job of protecting new home buyers, or is it protecting the new home building industry?

Tarion is not subject to oversight from the Ombudsman of Ontario, nor from the Auditor General, nor do they have to disclose executive salaries on the Ontario Government’s “Sunshine List“. We’d like to trust, but we’d also like to verify.  We cannot. There is no Ontario government legislation permitting any independent authority to investigate Tarion’s business practices. A recipe for trouble for consumers, and for their own employees if you read the “Open Letter to the Premier of Ontario” from concerned Tarion employees, dated March 31st , 2014, (published here under menu tab “Voices for Reform”).

If “sunshine is the best disinfectant”, there appears to be none here.

Have you ever suffered an automobile accident and awakened to find yourself in court opposite your own insurer opposing you?  Probably not, or you’d have changed insurance companies.

But you can’t change insurance companies if you’ve purchased a new home and discover defects. You’re stuck with Tarion Warranty Corporation, the Ontario government’s authority entrusted with “protecting new home buyers“.

But who is Tarion protecting? Many homeowners have found Tarion was not there when they needed them. They found Tarion taking the side of the builder who caused the defects at the LAT (License Appeal Tribunal), the appeal court for Tarion warranty claims.
New home buyers are obligated to buy a Tarion warranty, in a fee passed on to us by their licensed builders. Tarion tells us they “guarantee” new homes against defects, and “protect new home buyers”. But many consumers have been left to repair defects on their own, and spend fortunes in court fighting not one adversary but two,Tarion and their builder. With in-house lawyers, and technical experts, Tarion has the deck of cards stacked in its favour. If Tarion takes the “its not warranted” route at the LAT with the builder as co-defendant, both can get off the hook, and the builder walks away with no mention of the defect on his record. What happened to justice and consumer protection?

This adversarial system puts the consumer, the most vulnerable party whom the laws were created to protect, at a disadvantage. Self-representation further deepens the uneven playing field. Since when did shielding shoddy builders from accountability, and their records from public view, benefit society? Ask shoddy builders. Or Tarion.

Despite investigative media reports, MPPs calling for accountability, the tabling of petitions, bills, and motions in the Legislature, the stonewalling of consumers on Tarion continues. The McGuinty/Wynne government seems to have no appetite for these reforms, especially if it might mean stepping on the long toes of the building industry, the job-creation and political donation Goliath. So consumer reforms remain in legislative limbo.

There is no legislation which permits closer scrutiny of Tarion. The Ombudsman of Ontario has no authority to investigate, nor does the Auditor General, nor does executive compensation have to be disclosed. The Ministry of Consumer Services, despite head-nodding to consumers, seems largely content with the status quo, and getting Tarion’s report card from Tarion itself.

“We can’t insure everything”, says Tarion’s C.E.O., Bogach. But Tarion should not sell itself to us as just another insurance company. Their warranty is mandatory, they have a monopoly, a public trust function administering consumer protection legislation, they are the sole licensor of builders, and they have a duty of disclosure of builder records. But autonomy without meaningful oversight, and a builder-heavy board, is a recipe for hardship for consumers. Despite Premier Wynne’s promise “I got into politics to help people“, she has remained remarkably aloof from detailed accounts of consumer hardship created by the current uneven playing field. Consumer reforms to Tarion may bring no tactical political advantage, but courting the building industry may.

In the meantime, the fox remains in charge of the chicken coop, and reports all is well with the chickens. In fact, some of them have been very tasty indeed.

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