More consultants, more training, more round tables and focus groups, more brochures, and pilot projects, the list goes on. More money is being spent out of the $400+million warranty fund, but still no fix to “broken Tarion”.
That’s the conclusion many have made after looking at Tarion’s progress report it issued this month on the implementation of the Auditor-General’s 32 recommendations.
The spin-masters are back in full force.
Why hasn’t government learned from their past lapses in oversight, why do they still expect Tarion to fix itself and write its own report card?
Tarion’s task was to implement the 32 recommendations of the Auditor General after what the Toronto Star called in July 2020 a “blistering” report on their operations.
The problem with Tarion’s self-evaluation is they re-frame serious systemic issues as simply a lack of communication, lack of training, lack of resources, or misunderstandings. As if we new home buyers just don’t get it, or are confused.
But the major problems the Auditor revealed in her 2019 report were not miscommunications or misunderstandings. They were conflicts of interest favouring builders over homeowners, executive incentives to minimize claim pay-outs, letting builders off the hook for warranty obligations and pay-backs, not reporting builder performance accurately, bias toward builders in the investigation of honesty and integrity complaints, and corporate governance imbalances favouring builders.
Here’s part of Tarion’s self-evaluation below. Of the 25 recommendations under their control, 19 have been “completed” they say, with 6 to be done next year. Let’s check this.
Based on the continuing desperate calls from homeowners to consumer advocates, the Tarion problems have been getting worse, not better.
It would be too long to go through all 25 of these in one blog post, but for brevity’s sake, let’s fact-check 6 of them.
Point 11 in the Auditor’s report:
The auditor advised Tarion take all information about a builder’s track record into account before granting a future licence to build.
Tarion has marked this item as “completed” by saying it “has revised its processes and currently requires this type of information to be considered when deciding to grant a license.”
Problems with this:
- This process is not transparent; who knows what information Tarion is taking into account before licensing builders? Is the oversight ministry checking this?
- “Considering information” is too vague to mean anything; not the same as taking action on it or disclosing it on a builder’s record;
- No specifics on what “processes” Tarion says it has “revised”.
- This is another “trust us” from Tarion
Point 12:
Tarion is to confirm that builders have the financial resources to complete projects and cover cost of their warranty obligations.
Tarion has checked this item off as “completed”, saying it has “reviewed the best available external evidence to determine which information builders should provide“, the “reasons they cancel construction projects“, and that they’ve “implemented a new process to collect and review this information.”
Problems:
- What is this “new process”? How is this different from before? Does it protect consumers, just because it’s “new”?
- In the past, builders have refused to disclose to Tarion certain key information in their financial records, (eg: the Urbancorp case), by refusing investigations, and Tarion has said it has no authority to require a closer look at the builder’s books.
- The same has been the case with the reasons builders give for cancelling condo projects. The reasons are often vague, such as not being able to get financing, while they quickly go onto to build other projects.
- What is the “new process” to “collect and review” this information? Saying it’s new and improved doesn’t make it so. Especially since Tarion considers builders as one of their main stakeholders, and two builders are long-term Tarion board members and builder lobby group members.
Point 15:
This recommendation states that Tarion is to ensure homeowner complaints against builders are properly investigated.
Problems:
Tarion has checked off this item saying it “has added additional resources to initiate and complete investigations… and eliminate the backlog”.
But this is not an under-staffing problem, it’s a conflict of interest problem. It can’t be remedied by adding staff and clearing the backlog of complaints. This seems like re-framing the problem to minimize it and chose a desired solution.
Another similar problem of bias toward builders is reported in the Auditor’s analysis, pg. 9. When builders say homeowners denied them entry to the home to fix defects, Tarion didn’t bother to get the homeowner’s side of the story. This is an ingrained problem of bias toward builders, not an under-staffing problem, or a lack of training.
Point 20:
Tarion was told to make the Builder Directory show results of their investigations into honesty and integrity issues, show the amount of money still owing to Tarion by builders, show the number of defects under warranty the builder refused to repair, and number of Building Code violations builders refused to repair. This has been checked off as “completed”, but it hasn’t been.
Problem:
In the vaguest language possible, Tarion says it has added “past convictions” to the list (meaning when builders were building homes without providing the Tarion warranty), but for the other important aspects of builder records we read: “Tarion sought public input on additional information that should be posted on the Builder Directory”, […] “and has up-dated the Builder Directory with this new information”.
This is meaningless: it says we’ve added nothing to the list, and added that nothing to the list too. How can this be taken seriously? Are our government oversight experts asleep or complicit?
Point 27
Tarion was to make sure their staff had Building Code certification before they inspect homes for Building Code violations. This item has also been checked off as completed.
Problems:
- Tarion says it’s added “a training program” for staff in this area. But the Auditor’s report called for Building Code certification, not training of internal staff.
- Building Code violations are now going to be “reviewed by staff with the relevant qualifications” or “by external experts as needed.” But this gives too much discretion to Tarion to decide if defects are Building Code violations or not, and to use outside experts only if they decide to do so. This is an on-going problem with Tarion: lack of specific training in the defects they are sent to investigate, lack of qualified Building Code inspectors, and secrecy surrounding what experts are hired and when, and often no action even when engineer’s reports are obtained.
- What has changed here? More training and reviewing.
Point 29
The Auditor’s report said the internal Ombudsperson’s office is to have formal independence from Tarion.
Problems:
This has also been checked off by Tarion as complete, but that’s not correct.
The Ombudsperson is to report to Tarion’s board and be reviewed by the board, after doing her own “self-review”. There were serious problems cited in the Auditor’s report regarding exorbitant pay raises for the Ombudsperson herself, and the potential sharing of confidential homeowner information with the internal legal department. These are all huge conflicts of interest, and should have prompted resignations, but all this was kept secret until October 30, 2019.
This Ombuds office is still paid by Tarion, and housed within their offices. Although it is formally supposed to be reporting to the board, it is not in any sense independent of its employer. The office has recently changed its name to New Home Ombusperson’s Office, eliminating the word Tarion, but that fools no one.
There has recently been – you guessed it – a consultant, another lawyer, hired to find out whether this office adheres to the general ombudsperson principles. Undoubtedly chosen and paid for by Tarion, so one can already guess the outcome.
Since the Ombudsperson doesn’t have a mandate to get involved in warranty claims or disputes, it’s hard to see what purpose the office has at all. Most consumers say it’s a time-consuming, frustrating, and useless exercise to contact this office. This money would be better spent fixing homes.
The list could go on and on, with each of the 25 recommendations showing more spin than substance.
We rely on the Ministry of Consumer Services as oversight authority and the Auditor general’s office in her next audit, to see through the PR and do their fact checking, instead of relying on Tarion’s version of reality. We’ve seen what that has yielded after 43 years.
In early 2020, the Ministry promised the public a “complete overhaul from top to bottom”, after admitting repeatedly Tarion was “broken”. But it’s a sad joke on consumers to call this an overhaul.
For many consumers still suffering in newly-built homes with serious construction defects, this report card is no more than a promise to consult, review, hire more consultants, and conduct pilot projects. That’s what Tarion has been doing all along, it’s a gold mine for consultants.
The same executives are in place at this monopoly, and many have been at Tarion for over a decade, including the board Chair, CEO, and several senior VPs. So….
…why didn’t they take action before? Because there was no effective oversight which would have forced them to do so. Now these same executives stated they found the Auditor’s report “a useful exercise in self-examination”.
Why does the government allow Tarion to keep this lucrative monopoly which forbids other providers from entering the field? What’s the product or service they provide? Why is it mandatory?
Many consumers say Tarion has cost them more in a long, exhausting, costly whodunits, without resolution. They’ve lost years of their lives, and suffered financial ruin and health problems trying to get defects resolved through Tarion. It has cost many consumers more than it’s worth. Ask the Shuman family, the Emery, Bellefeuille, Ferland or Wheeler families, just to name a few.
Since Tarion has had its regulatory duties taken away, (as of Feb. 2021), and is not allowed to use the word warranty in its name anymore, (since the Auditor said it doesn’t provide a warranty), what is Tarion’s purpose?
This Tarion “Implementation Plan” of the Auditor’s 32 recommendations is just that, a plan. But worse, it’s a fig leaf for the serious underlying, decades-long problems of conflict of interest, and bias toward builders, which remain unresolved.
————————
CONSUMERS' REFORM TARION 