Monthly Archives: September 2020

After the hard-hitting Auditor General’s report on Tarion released in October of 2019, what’s changed at Tarion, the broken warranty and builder regulatory monopoly?

Not much.

Tarion executives and Consumer Ministry officials unanimously and immediately accepted all thirty-two of the Auditor’s recommendations. So you’d expect to see the marching orders have by now had some effect.

Hard to find any progress.

The executive team has been left largely the same, with some big promotions from within, and a long-time board member has been rewarded with the top position of Chair of the board. How could those who were fine with the broken system in the past be those you trust to fix it? Where have they been all these years? Seems an odd way to make a new start and bring about a major culture change.

The NDP Critic, MPP Rakocevic, suggested an independent administrator, reporting to the Ministry, be appointed to oversee Tarion’s processes and activities. That idea was quickly dismissed by Premier Ford’s government.

Big mistake.

We understand the Auditor’s team will do an up-date of their findings next year, in 2021.

Here’s what many consumers on the receiving end of Tarion’s broken system have found during the last year….

12 continuing problems:

• 1) Still – the burden of proof is often on homeowner to prove construction defects, whereas they should only have to show credible symptoms. Tarion’s representatives say they won’t climb up ladders or look on roofs, so they won’t warrant anything they can’t see. The consumer loses, Tarion and builders win.

• 2) Still – too many non-disclosure agreements and “services gestures” are being used by Tarion, which allow builders to avoid having defects listed on their records, and allow bad builder track records to remain hidden from the public. Consumers lose.

• 3) Still – too few investigative inspections on home defects by qualified inspectors. Consumers lose.

• 4) Still – no independent dispute resolution (DR). Tarion’s DR is not seen by consumers as independent of Tarion, or impartial. Too much discretion is left to Tarion to decide methods of DR without proper independent oversight. Consumers lose.

• 5) Still – no consumer advocates on Tarion’s board (or the new regulatory board, “HCRA”) . Two long-time board members are builders, four others have ties to the real estate industry, and none appear to have any background with the consumer experience with the warranty. Consumers lose.

• 6) Still – no transparency in policy-making: consumers have no idea what becomes of their input into policy consultations, or what influence builder lobby groups have had on the end result. Consumers lose.

• 7) Still – there are conflicts of interest in Tarion’s stated mandate: serving its own interests, those of builders, and government officials, but also the new home buyer. Serving the “public interest”, meaning everyone, is too broad, and no one has the same at stake as the homeowner. This is a 43-year-old flaw in governance. Why is everyone afraid of consumer advocates on a consumer protection board? We lose.

• 8) Still – no cap on legal fees used out of the warranty fund to fight consumers; no cap on executive salaries, and no transparency about how executive bonuses are calculated. Consumers lose.

• 9) Still – Tarion seems to be continuing to license builders with shoddy records. There are too few consequences if the builder doesn’t pay back money owed to Tarion, and there is continuing secrecy about their records. Consumers lose.

• 10) Still – consumers are told if they dispute a Tarion decision they can appeal it to the License Appeal Tribunal (LAT), where about 85% of consumer cases fail. The 2017 Tarion review recommended the LAT not be used for these appeals. It’s not a level playing field, since most consumers are self-represented, and Tarion is always represented by experienced litigators. Consumers lose.

• 11) Still – consumers are being blamed for denying entry to a builder to fix defects when this isn’t true. Tarion often doesn’t hear the homeowner’s side, and will use this to deny claims. If the relationship between builder and homeowner has broken down, Tarion should appoint another builder to do repairs, and not subject the homeowner to humiliating or hostile confrontations in their own home. Consumers lose.

• 12) Still – Tarion has kept the word “warranty” in its name, whereas the Auditor’s report said they don’t provide a warranty. Consumers misled, confused.

The “complete overhaul”, announced by the Ford government’s Minister Thompson in early 2020 looks like a sad joke.

The PC government’s frenzy to build more homes faster, cut red tape for builders, and keep the Ontario Home Builder’s Association (OHBA) on side, has been their overriding objective, with the OHBA President describing Tarion as “a good system” in June 2020. (Legislative Committee on General Government).

The reason for creating a new home warranty in the first place is to protect new home buyers, full stop. Its purpose shouldn’t be to protect its own executives, or builders who build defective homes, or government officials who are lax in their oversight responsibilities.

In late February, 2019, the Ford government announced “Tarion is broken”. Still, almost two years later, that’s exactly right.