Monthly Archives: November 2014

Why Ontario’s “License Appeal Tribunal” is not working for new home buyers

The License Appeal Tribunal (LAT) is the court of appeal for consumers who’ve been denied coverage for new home defects under the Ontario government’s Tarion Warranty programme. But like any other courtroom, the LAT is a highly legalistic, procedure-laden, adversarial body. Its not a problem-solver for even the best-prepared and well-educated of consumers who just want to get their newly-built homes fixed.

If you’re too late to report a defect, didn’t discover it within 2 years, or if your defect doesn’t fit the narrow definition of a “major structural defect”, for example, Tarion can deny you warranty compensation. In these cases, Tarion pays nothing, the builder walks away scot free with a clean record, and you’re left with the problem.

Tarion is also the “regulator of the new home building industry” and “licensor of builders“. So one would expect all defects, whether  warrantable or not, would be listed on Tarion’s builder track record (“Ontario Builder Directory“). They are not. Nor are any LAT hearings. So future home buyers can’t see all the red flags on builders they should see before they buy.

Tarion tells consumers its Ontario Builder Directory (not easy to find on its website) is a research tool for new home buyers. “Do your research,ask the right questions“, Tarion and its oversight Ministry continue to tell consumers. But research is only as good as the information available. Why wouldn’t the “regulator of the building industry” give full disclosure of all defects it has inspected or has been informed about? What’s the point of a provincial regulator (Tarion) if it has no teeth, and there’s no demerit point system to warn consumers about shoddy builders? If there are no consequences to shoddy building practices, there’s no deterrent. Individual consumers and our communities will eventually pay the price for someone else’s wrong-doing.

Tarion tells homeowners they can appeal its warranty decisions to the taxpayer-funded “License Appeal Tribunal” (LAT). However, as many consumers have found out, there’s nothing consumer-friendly about this or any other courtroom. Most homeowners can’t afford the almost $2,000 a day to hire a lawyer specialized in this type of hearing, and many can ‘t find a law firm not already acting for a major developer. Hearings can take anywhere from 2 to 30 days, and this means time off work for the consumer. Lawyers are paid by the hour, and don’t seem to care how long hearings go on, or how many motions they bring to delay the proceedings and wear down opponents. Tarion also has an in-house legal department and often hires top-paid legal experts with seemingly no budget restraints or time concerns. Add to this that consumers are not trained in cross-examination techniques or the presentation of arguments and evidence, they are not familiar with case law, or how to interpret it or apply it; they are not skilled in asking non-leading questions, or cross-examining expert witnesses. The lawyer(s) job is to “win”: to poke holes in the applicant’s case, withhold evidence as long as possible, use legal procedures to their advantage, use cross-examination techniques to fluster witnesses, constantly raise objections, and use delaying “motions” to wear down the other side and get them to just give up.

How is this adversarial forum helping consumers resolve home defects?

It’s clear Tarion, lawyers, most builders, and the LAT itself seem content with the status quo. Its no surprise when you see how they fare. Consumers fail at the LAT 83% of the time, and 96% of the time for “major structural defect” claims. (CPBH research on the LAT, 2006-2013).

Why does the Ministry of  Consumer Services continue to turn a blind eye to this ineffective, uneven playing field as a means to resolve home defects? Even the taxpayer funding of the LAT seems misguided if it doesn’t solve the problems it’s supposed to solve in a fair, efficient, simple, and timely fashion.

Wouldn’t it be more cost-effective to provide an independent consumer watchdog to resolve new home defects without using a courtroom? Consumers want home defects resolved, more accountability for builders, and greater scrutiny of Tarion as a government-granted monopoly. Both Premiers Wynne and McGuinty have consistently turned a blind eye to persistent and serious concerns from consumers about this. Accountability, transparency, we now apparently have lots of that in our Ontario government, we now have the Premier of the people, listening to Ontarians. Can’t say we’ve seen much of any of that on Tarion/LAT issues.

Could this have anything to do with the construction industry’s MILLIONS of dollars in campaign contributions to provincial re-election campaigns?  Is one loathe to bite the hand which feeds? Sooner or later the feeders want pay-back time.

Tarion senior executives and board members got an earful of complaints from a large group of irate consumers regarding the LAT at the Annual Public Meeting, April 30th, 2014. These concerns were not reproduced in full on Tarion’s “summary” it published on its website. Tarion still refuses to publish a full transcript of that question period. So does the Ministry. The anger and frustration from consumers was clear and palpable.

Tarion’s senior executives promised to “look at certain imbalances” and “take this back to the board“.  Eight prominent builders/developers sit on Tarion’s board, and were present at that meeting. Four Ministry of Consumer Services employees and senior policy advisers were also present. The silence is deafening.

 

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