Monthly Archives: August 2014

Dear Premier Wynne,

This is the third OPEN LETTER you’ve personally received in the last six months regarding Tarion Warranty Corporation, urging you to bring stricter oversight, greater transparency, and accountability to this organization.

None of the consumers, or Tarion employees, or consumer organizations who’ve written these OPEN LETTERS to you have received a meaningful reply. You have refused to meet with consumer groups on these important issues.

Your staff refers consumers to your many successive Ministers of Consumer Services, six of them in a period of five years. This seemingly revolving door of Ministers ensures there is insufficient time for each Minister to fully understand the complex and multidimensional problems with Tarion, and to carry through legislation to remedy them.

As you are well aware, consumers continue to experience hardship with Tarion, a “Delegated Administrative Authority” of your government, whose purpose is to protect new home buyers, and regulate the new home building industry.

You are also aware there have been numerous Petitions and Private Members Bills brought to the Legislature in 2013/14 by Opposition MPP’s urging meaningful oversight and transparency at Tarion.

It is incomprehensible to us that you continue to remain utterly silent on this important issue, and refuse to meet with major consumer organizations.

However, you continue to promise us “transparency and accountability” in your government; you continue to say you are overwhelmingly motivated in politics “to help people”; you continue to say you stand for an open government, listening to the people; and you continue to say there will be no more wasteful spending on your watch.

But we see a disconnect between your words and your actions.

Some of the serious concerns which have been repeatedly brought to your personal attention about Tarion are: lack of understanding and representation of the consumer point of view in policy-making,  lack of transparency in builder track records, lack of real consequences for shoddy building practices, the opacity of executive compensation, and the lack of accountability to independent bodies such as the Auditor General or the Ombudsman of Ontario. Consumer protection at Tarion should not be trumped by the narrow interests of the building industry lobbies, whose members occupy 8 out of 15  Tarion board seats. Tarion was created to protect consumers, not builders, and to administer consumer protection legislation on our behalf.

The problems with arms-length, outside agencies of the Ontario government have been recently well-publicized in the media. We trust this wasteful spending will not happen again on your watch. But pre-emptive action seems key to prevention. Independent oversight of Tarion is long overdue.  You have read the warning signs repeatedly brought to your attention by consumers, advocacy groups, and even Tarion’s own employees this year.

We are baffled by your continued silence on this important issue for Ontarians. If this silence can be explained by the power and affluence of the building industry lobbies and their control over political agendas, then this is a sad outcome for Ontario’s new home buyers, some of whom – as you know – have lost their homes or suffered severe financial hardship trying to get construction defects resolved in their new homes.

In one of the most important investments we’ll make in our lives, how can you continue your silence on this issue?

Action is urgently required: tougher rules for builders, more meaningful oversight of the warranty fund.

We are relying on you, Premier Wynne, to match your promises to us with meaningful reforms for consumers to Tarion Warranty Corporation. May we have a reply from you?

Sincerely,

B.Captijn

http://www.ConsumersReformTarion.com

Twitter: @ReformTarion

 

 

 

 

 

 

The above quotation sounds like it came from a builder lobby or marketing group, doesn’t it? It did not. It came from Howard Bogach, President and CEO of Tarion Warranty Corporation, the licensor and regulator of the building industry in Ontario, the government-designated body responsible for new home warranties and for “protecting new home buyers“.

More concerning is, this was published on Tarion’s website (http://www.tarion.com) in their “summary” of the Annual Public Meeting Question-and-Answer interaction with the public on April 30th, 2014. The question from a consumer was reported to be: “What is Tarion’s definition of a “bad builder”? Answer: “There’s no definition of a bad builder”.

Paying out a warranty shouldn’t shield the builder from accountability for the defect. There are currently many ways crafty builders can get around the Tarion rules and procedures, and avoid paying for defects and having them show up on his Tarion track record. Builders who don’t suffer any consequences for their shoddy building practices don’t have an incentive to stop either. Short-cutting in workmanship and materials, squeezing sub-trades to do more for less, unsupervised or unqualified workers on site, ducking municipal inspections, or Building Code regulations…. the list goes on. But yet we are told Tarion has “no definition of a bad builder“. Just ask buyers of new homes and condos, they’ll define a bad builder for you.

We can understand why some builders don’t want defects listed on their Tarion track records: this would alert the public to their shoddy practices, and put a damper on their future sales. In the words of Tarion’s Mr. Bogach: “We don’t want to take away someone’s livelihood” he explains.  But its ok I guess to put the cost of the  builder’s shoddy work on the back of the new home buyer in many cases?

We’re getting conflicting messages here.  Tarion says it is “fundamentally a consumer protection organization“, yet says it has no definition of what constitutes shoddy building, and refuses to publish all the information it has on builder track records for the public to see. Who is this protecting, the builder or the consumer? Transparency in builder records is key to new home buyer protection, since full disclosure enables consumers to make informed choices. These were the words of the Ministry of Consumer Services to the press in July 2013 in the run-up to the 2014 provincial  re-election campaign. Sounds good, but little action to date has matched these words. Premier Wynne, the listing-to-the-people Premier, continues to turn a blind eye to consumer reforms to Tarion.

In most professions the regulatory body defines what constitutes acceptable and unacceptable behaviour, and lets the public have access to this information on its practitioners. Why not in the new home building industry?

Tarion organizes each year a gala event for builders called the “Tarion Awards of Excellence”  where it hands out awards to builders. So they know what an  “excellent” builder is,  apparently, but not a “bad builder”.

What doesn’t make sense is the body responsible for regulating the industry, Tarion, has eight builders out of 13 on its Board of Directors.  Isn’t that like having the big Wall Street investment firms sitting on the industry regulatory board, the “SEC”?  Isn’t that “the butcher inspecting his own meat”? Many powerful industries cannot be self-regulating, especially not ones with an important consumer protection mandate, a monopoly, and a public trust function… with minimal oversight.

Defining “bad building” in the new home building industry is the first step in recognizing it, providing real deterrents to stop it, and eventually clamping down on it. Let’s leave “builder protection” to the large and powerful builder lobby groups, who seem very good at protecting their industry’s interests and privileges. The consumer is the most vulnerable party here, and has been promised “new home buyer protection” by Tarion and the Ministry of Consumer/Government Services.  What are they protecting us against, exactly, if it resists definition?