CONSUMERS' REFORM TARION

Chris Arnold, Ottawa lawyer, mediator, collaborative law specialist, University of Ottawa law professor, shared this statement with us last week on LinkedIn. (Reproduced below with his permission).

“(…) My experience with Tarion (when I did real estate and civil lit): a massive  fr…..d on homebuyers. Tarion masquerades as consumer protection but I’ve seen nothing but a mix of incompetence and combativeness, where every technicality is used to deny coverage. Builders love it, waving the empty “protection” like a flag or hiding behind it.  – Rarely forced to fix errors.  Recourse? The License Appeal Tribunal (same body where appeals of hot-dog vendor licenses go). Take a sec and e-mail/call your MPP to ask them to support this Bill”.                            …..Chris Arnold

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Thank you, Chris, for speaking up for Ontario consumers. Thank you for underlining the urgent need for a major overhaul of Tarion’s UN-transparent, UN-accountable system. We agree with you, we need to support Bill 60 to bring transparency and accountability to Tarion.

Premier Wynne and her new Minister Orazietti have made it known they prefer to tinker around the edges of their out-dated, lax “DAA” accountability model. With a shaky track record so far on oversight of arms-length agencies of the government, this seems like the ostrich sticking its head in the sand.  Perhaps the Liberals have backed themselves into a corner, having received substantial donations for their re-election from the building industry. Perhaps its pay-back time.

Who can explain to us why Premier Wynne continues to promise us transparency and accountability, but refuses to apply these principles to Tarion Warranty Corporation? The Premier has yet to show us there is ANY system of checks and balances keeping this monopoly “honest” towards the consumer.

If you think the Ontario License Appeal Tribunal (LAT) is doing a poor job as a court for homeowners to get new home defects resolved, you’re not alone. What you may not know, and neither did we until last month, is that the oversight body of the LAT seems to agree!

The Executive Chair of SLASTO (Safety, Licensing Appeals and Standards Tribunals, Ontario), Ms. Linda Lamoureux, said this to Dr. Karen Somerville, President of the Consumer organization CPBH on Dec. 9th, 2014. She stated:

1)  The LAT’s website is “terrible”. (Ms. Lamoureux’s words). Consumers have been telling the LAT this for years. Its impossible to search builder records without the exact date and year of the appeal,  there’s no explanation of the meaning of “ONHWPA”, no organization of cases according to type of defect or name of builder, no indication of whether its a precedent-setting decision, or whether the builder is a repeat LAT defendant. All things a consumer might want to know about a builder.

2) Chairs NEED TRAINING in dealing with self-represented parties. Consumers are subject to a two-on-one at the LAT, fighting two sets of lawyers, Tarion’s and the builder’s. To balance the interests of fairness to consumers, specific training is required, and this specific training is not what current adjudicators have.

3)  SLASTO is aware that 83% of consumers lose their cases at the LAT.  The LAT, and the Ministry of Consumer and Government Services has been aware of this data for over 6 years. (CPBH research on the LAT, 2007-2013)

4) The SLASTO Chair is well aware of the “Access to Justice in Civil and Family Matters” report initiated by the Chief Justice of Canada to make the courts more cost-efficient, and user-friendly for ordinary citizens. She has however not implemented any of these recommendations at the LAT.

5) The LAT needs to improve its transparency and accountability to the public. Also a point agreed by the SLASTO Chair in her meeting with CPBH on Dec. 9th.

It’s outrageous the Executive Chair says she’ll take 12 to 18 months to address these short-comings of the LAT – which the LAT has known about for years. Anyone in the private sector who would say they need 1 1/2 years to do their job  would be shown the door. Not in the public sector.

Our public servants may forget they are there to serve the public, not their own timetables and organizations. They seem to ignore the human cost of their policy decisions, make us endure endless delays and finger-pointing, creating financial hardship for families.

Many honest, hard-working consumers who through no fault of their own found construction defects in their new home, are suffering and losing their shirts at the LAT. Who can afford a lawyer at $1,200+ a day for a week or more? This is excluding technical reports and expert witness’s hourly fees. Tarion (using our warranty fund money) can certainly afford it, as can builders, since its for them a tax-deductible “cost of doing business”.

My message to Ms. Lamoureux, Chair of SLASTO: 

Why is the courtroom being used at all as a forum to resolve home defects? Neither the homeowner nor the taxpayer is being well-served by this.

Many problems don’t need a courtroom or lawyers. Home defects cannot be solved FAIRLY in a forum where the applicants can’t afford legal representation. Being right, and being able to prove in a court of law, are two different things. Whoever said legal cases are 15% facts, 15% law, and 70% procedure and  tactics must have been to the LAT.  Lawyers always win this game. Consumers can’t afford this costly, stressful, time-consuming process where even the best-prepared and well-educated are at a distinct disadvantage.

Ms. Lamoureux: the LAT is not a fair forum for consumers to resolve new home defects.

You have said you are bound by current provincial legislation. That’s what your public servant colleagues have told us, for years. No one seems to be able to fix problems, but all concerned continue to acknowledge them. Government created this unfair system, now we rely on someone at senior levels of government to fix it. Please contribute to a fair solution for homeowners, such as providing mediation services, and other early resolution options – with equal representation for consumers. That would be taxpayer money better spent.

Please consider the human cost of having consumers wait for 1 1/2 years for your organization to address these urgent problems. If you cannot personally influence legislation, I’m sure you have direct and personal access to those who can. We rely on your and your organization with responsibility for the LAT to take leadership and bring meaningful change, urgently, to rectify this uneven playing field.

Dear Minister Orazietti
Minister of Consumer and Government Services, Ontario

I recently read a letter you sent (Dec. 9, 2014) to a new homeowner with long-standing serious problems with Tarion.

As you know, for several months individual consumers, advocates, and consumer organizations have met with you and your staff to underline many serious, on-going, festering problems with Tarion. We had hoped you might be the first in a long chain of seemingly complacent Ministers to finally understand and address consumer problems with Tarion.

Reading your letter of Dec. 9th, however, it seems our efforts have fallen on deaf ears. Your Ministry seems content to keep getting Tarion’s report card from Tarion itself.

We are all aware that arms-length agencies of the Liberal government have produced several shocking spending scandals within the last year such as ORNGE, e-Health, OPG, MaRS, the Pan-Am Games, and the billion-dollar GAS PLANT debacle. We’ve been asking your Ministry to take pre-emptive action on Tarion. We’ve been asking you to provide independent oversight to prevent further serious problems. But we continue to see, despite periodic window-dressing, nothing has been done.

Your letter of Dec. 9th indicates you seem content with the current arms-length accountability model of the Ministry as a sort of customer service and communications partner of Tarion. You use phrases like “I am advised that Tarion…”, and “I understand that Tarion…”. This is worrying to us since it paints you as a passive receiver, instead of an independent verifier, of the information Tarion produces.

You state “You understand” Tarion’s Chair made a commitment at its Annual Public Meeting (30/04/14), to change its use of the License Appeal Tribunal. But who’s going to make sure they actually DO anything? A full eight months on, nothing has been done. Consumers have received no answers to their inquiries.

Tarion’s PR and Marketing machinery tells us, as you do in your letter, “Tarion has a history of…progressive steps to improve governance, transparency, customer service and consumer protection”. Sounds good, but who’s verifying this? Tarion?

Who’s overseeing Tarion’s in-house “ombudsperson”? Tarion itself.

With its government-granted monopoly, revenues of $33 million, (2013), salaries and benefits of over $24 million, $9 million in administrative costs, yet a mere #3.5 million paid out in homeowner claims, Tarion’s financial picture cries out for independent scrutiny. There is none.

Consumers have for years complained to your Ministry that Tarion’s policy-making is biased toward the interests of the building industry. There is no meaningful conduit for consumers to give feedback to Tarion’s senior levels. The President of the Liberal Party of Ontario, responsible for fundraising, is a Tarion senior V.P. This can hardly be expected to encourage trust in Tarion’s independence from the powerful and affluent building lobbies. Since eight prominent builders sit on Tarion’s board, that’s undoubtedly good for fund-raising, but doesn’t do much for consumers. Yet Tarion was created to protect consumers, not builders.

We are scandal-weary in this province. We are skeptical of arms-length agencies of government operating their monopolies with little or no oversight. Tarion has been given an important public trust function. Why are no preventive measures being taken to scrutinize how this indirect tax on every new home buyer is being used?

Tarion seems a prime example of “the butcher inspecting his own meat”.

We’d like to trust Tarion, Minister Orazietti, as you demonstrably do. But experience has taught us “trust but verify” is the better policy.

Sincerely,
B.Captijn

Volunteer Consumer Advocate
http://www.consumersreformtarion.com
Twitter:@ReformTarion

Everyday legal problems can often lead to more complex legal problems, which in turn can cause financial hardships and health problems for families and entire communities.  How can our justice system better serve ordinary citizens, be more user-friendly and problem-solving? This question was addressed in the 2013 Report commissioned by the Chief Justice of Canada, entitled a “A Roadmap for Change,” by the “Action Committee on Access to Justice…”  (see website: http://www.cfcj-fcjc.org/collaborations)

An example of very poor access to justice for consumers is the Ontario License Appeal Tribunal, (LAT). This is the main court of appeal for Tarion new home warranty decisions. New home buyers are forced by law to buy the Tarion warranty, but often find  Tarion dismisses their claims due to, for example, warranty deadlines and definitions. And they’re stuck with the problem.

Consumers who go to the LAT for resolution of construction defects find the system benefits Tarion and builders, who win 83% of the LAT cases. (See CPBH research 2007-2013, at http://www.canadiansforproperlybuilthomes.com). Builders walk away scot free, no record of defects on their track record, and Tarion pays out no compensation. The current system basically says if your defect isn’t “warrantable”, it doesn’t exist. But as licensor of builders and regulator of the building industry, Tarion has a public trust function to make sure there are consequences for shoddy building practices. If there are no consequences, there are no deterrents either.

Builders and Tarion usually hire top lawyers to defend their interests at the LAT. Most homeowners self-represent due to the prohibitive cost of hiring lawyers. Its no surprise that 83 % of their appeals fail.

But the justice system exists to protect the public, not the wrong-doer. The legislation which created Tarion was intended to be consumer protection legislation. It was never intended to shield shoddy builders from accountability, no matter how many expert lawyers they can pay for. Deep pockets shouldn’t tip the scales of justice. But at the LAT they do. That’s part of  problem the “Roadmap for Change” was intended to fix.

So what is the LAT doing to implement the report’s recommendations?

By all accounts, nothing.

I wrote in November 2013, and February and May of 2014, to Premier Wynne, the Associate Chair of the LAT, the Omdudsman of Ontario, the Auditor-General of Ontario, and the Chair and CEO of Tarion Warranty Corporation – to ask what actions they were taking in accordance with the “Roadmap for Change” which called for a more user-friendly, problem-solving, cost-efficient justice system, “putting the public first“.  Many consumers also wrote, as did several other consumer organizations.

Not a peep from the Premier, nor from the Ombudsman of Ontario, nor the Auditor-General.  From Tarion’s top executives, a few familiar Tarion-isms, “we’ll look into this“, and “we’ll take this back to the board”. No action. With all the promises of transparency, accountability, and access to justice, it seems no one’s doing much of anything to remedy consumer problems with the LAT.

The taxpayer is not well-served by the current LAT system, nor is the new home buyer. However, the shoddy builder, Tarion, and top legal experts seem content with the staus quo. But they’re not the ones the legislation (the ONHWPA) was designed to protect. The longer and more complex hearings become, the more lawyers and LAT Chairs earn. There is no incentive to solve problems, or “focus on outcomes” instead of process, no training in problem-solving instead of procedural game-playing.

Consumers have experienced real hardships, both financial and health-wise, due to long and complex LAT hearings, where at the end of the road their problem was not solved.  LAT hearings keep lawyers employed, avoid warranty payouts, and let the builder who caused the problem off the hook.

The LAT cries out for improved access to justice for consumers.

Here are 5 urgent problems with the current LAT system: 

1)  Prohibitive Cost. Tarion and builders are almost always represented by lawyers; consumers are not. The ordinary middle-class consumer cannot afford $1,500-$3,000 (ex-HST) per day for a 3 to 10-day hearing. Add to this, time away from work, travel costs for those living outside major cities, the high costs of technical reports ($2,000 to $8,000), and expert testimony ($200-$600 per hour) needed to prove their cases. For a $40,000 HVAC defect, for example, legal and technical costs could eat up the entire settlement, IF you win.

2) The LAT is a “two on-one” against the consumer

Tarion and builders often “team up” to get claims dismissed. The homeowner has the burden of proof, and he’s up against not one, but two experienced lawyers.  Lawyers are allowed to “align their interests“, according to the Law Society. But this is not a level playing field. Tarion’s seemingly unlimited budgets allow it to hire top legal experts from high-profile firms, who strategize with other lawyers with a common goal, so its not hard to predict who wins the lion’s share of the cases. This might be legal, but its unfair and unjust. A devastating loss for the consumer who goes back home with the problem he relied on the justice system to resolve. One wonders why the courtroom, and taxpayer dollars, are being used to address new home defects at all. Where’s early resolution, where’s mediation?

2)  Dismal outcomes

Consumers lose 83% of all LAT appeals. (CPBH research 2007-2013). This is a problem begging for a solution.

3)  Complex, Highly Legalistic Rules and Procedures.

Even the best prepared consumers have described the LAT as a “meat-grinder”. You may be able to write well, present, and read legal cases, but nothing can prepare you for the courtroom except 4 years of  law school and many years of experience in court. The LAT’s website is antiquated, un-user-friendly, written by lawyers for lawyers, and useless in researching builder track records unless you know the exact month and year of the appeal, or to look under “ONHWPA”.

4)  LAT “Pre-hearings” are NOT being used as problem-solving forums.

Both Tarion and the LAT describe the “pre-hearings” as an opportunity for settlement. This is unfortunately untrue. With two or more lawyers in the room, and the Chair also a lawyer, the conversation quickly turns to legal tactics and procedure. To bring a motion to dismiss, to bi-furcate issues, is this res judicata, can I raise estoppel, can I get this claim thrown out altogether… The facts are rarely discussed here, its all about procedure, tactics, and process.  Whoever said the law is 15% facts, 15 % law, and 70% procedure, certainly had been to the LAT.  But the cost of legal manoeuvring ends up disproportionate to the problem to be solved. Whatever happened to “equitable principles of justice”? What training do LAT Chairs and lawyers have in problem-solving and mediation, as opposed to legal tactics?

5) Adversarial culture of the courtroom

Lawyers are trained to poke holes in the opponent’s case, withhold as much information as they can for as long as possible, and use procedural tactics to their advantage. The Chair decides a case based on information lawyers are able to draw out of witnesses during sworn testimony. Lawyers are experts at this, and have years of training doing it. Consumers do not. Even the best educated consumer lacks experience in cross-examination, formulating non-leading questions, preparing and serving documents, and researching and applying relevant case law. Consumers who have to play the role of both witness and lawyer in their own case can easily become frustrated and distressed, putting them off balance. Add to this the persistent “objections” by not just one, but two, lawyers, plus interruptions from the Chair on procedural errors, and this is a recipe for disaster. There’s a difference between being right, and being able to prove it in a courtroom.

Consumers who voice complaints to the LAT (reachable only via e-mail at “LATCorrespondence@ontario.ca” ) about unfair treatment, bullying, or bias, have been told that the Chair sitting on their case will deliberate about his own conduct, and deliver an opinion on it. Nice. But not likely to encourage confidence in the impartiality and fairness of the LAT.

Several recommendations of the Action Committee on Access to Justice stand out: “Put the Public First“, “Prevent“, “Simplify“, “Take Action“, and “Focus on Outcomes“. Why should the LAT be excluded from these cross-Canada legal reforms? Its time for real action, no more brushing aside consumer complaints.

Are any of the of LAT’s policy-making or oversight authorities listening? If so, why is consumer input not being properly taken into account, and why have reforms not already been accomplished? As taxpayers and new home buyers, we need better value for money from the LAT, or we need to abandon it altogether as a method for resolving new home construction defects. Its cost currently outweighs its effectiveness.

Readers of this blog, help us amplify this cry for help.  Please write to: the Ombudsman of Ontario at info@ombudsman.on.ca; copy to the Auditor-General of Ontario bonnie.lysyk@auditor.on.ca; Please copy the consumer organization CPBH so we can keep track of e-mails, “Canadians for Properly Built Homes” at cpbh02@magma.ca

Thank you for helping us send a wake-up call to authorities for greater access to justice for ordinary citizens.

Tarion is a government-granted monopoly with no independent oversight and accountability.

Premier Wynne and Minister David Orazietti (Consumer and Government Services) need to open the books of Tarion to the Auditor General of Ontario, and give oversight of Tarion to the Ombudsman of Ontario. In addition, they should provide consumers with an ACCURATE list of all defects caused by Tarion- licensed builders, and disclose senior management salaries and bonuses – to the public.

None of this is being done now.

How can Premier Wynne continue to turn a blind eye to these serious problems, in the most important expenditure most Ontarians will make in their lives – a new home or condo?!

Please listen to my interview for social media with MPP Singh who has brought important legislation to Queen’s Park this week (10/12/2014) to try to address these problems, which the Wynne/McGuinty Liberal government has allowed to fester for so  many years.

Its long overdue for Premier Wynne to take leadership on this major issue.

If the current government is serious about transparency and accountability, and helping hard-working Ontario consumers, we hope they’ll take a few minutes to view this short interview.

http://youtu.be/mcpn_Ap4KUg

Meaningful action is long overdue by Premier Wynne and Minister Orazietti. Over to this majority Liberal government to “do the right thing”.

Looking for reason to vote in the next Provincial election? Here’s one.

A GROUP OF OVER 30 CONCERNED new home buyers spent most of their day yesterday at Queen’s Park at the Ontario Legislature in Toronto.  A daunting and intimidating venue for most of us. Consumers are not paid like lobbyists, MPP’s, or public servants, but felt it was time to make their views heard loud and clear (again), and show support for a new bill to reform Tarion Warranty Corporation.

The bill was introduced at a press conference held by MPP Jagmeet Singh, accompanied by a panel of 2 consumers, as well as the President of volunteer consumer organizations “Canadians for Properly Built Homes (CPBH), president Karen Somerville, and Jotvinder Sodhi, President of HOWA, Homeowners Welfare Association.

MPP Singh kindly agreed to interviews with consumers for their social media sites such as this one, he offered the use of his office to us, since many had traveled long distances at their own expense to be there, and provided us with a special guest pass to sit in the prestigious Legislative Gallery as he tabled his new bill. Many thanks to MPP Singh and his knowledgeable staff member Melissa for these gracious, much-appreciated gestures to consumers.

Homeowners spent most of the day at Queen’s Park in meetings with their own MPP’s, venting their frustrations at not being protected by the very government monopoly (“DAA”) set up to protect them. Tarion seems to be not doing its job for consumers. This is not a new problem to MPP’s, but one which has been cleverly brushed aside by the huge PR machinery of Tarion itself and its Tarion-friendly building lobbies.

The consumer message yesterday, joining MPP Singh’s message to the Legislature was:

Tarion is urgently in need of  INDEPENDENT OVERSIGHT, TRANSPARENCY and ACCOUNTABILITY to properly serve new home buyers.  This corporation was set up to protect new home buyers, not new home builders. Consumers should not have to bear the cost of the builder’s wrong-doing, no matter many high-powered lawyers these builders and Tarion can pay for.

Private Members bills such as this one rarely get passed, however, especially now that the Liberals, with strong ties to the building industry, have a majority control over the Legislature. True, says MPP Singh, but “a Private Members bill is a way to push government“, to put the spotlight on problems, and use “moral suasion”.

We were happy to join in the “push” of government yesterday, witnessing first hand how our provincial democracy works. Thanks to MPP Singh for initiating this new bill, and to all our MPP’s who will support it, as well as to consumer volunteer organizations CPBH and HOWA, and all the brave consumers who shared their stories and dedicated their time, money, and effort yesterday to advocating – not for access to a courtroom – but access to fairness and justice.

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UP-COMING BLOG POST: “Consumers Reform Tarion“, my interview with  MPP Singh – What’s ailing Tarion?

Premier Wynne, you never replied to my “Open Letter to the Premier “ (August 5th, 2014) regarding urgent consumer protection issues with Tarion Warranty Corporation. Your continued silence is hard to understand.

You promise to be transparent and accountable. You promise to listen to the people of Ontario. You promise to end wasteful spending.

So, why do you refuse to do anything about Tarion, a delegated administrative authority of your government, that is not doing its job properly?

I have a dream…that new home buyers will not be turned away when trying to fix construction defects. Tarion’s mandate is to protect consumers, not to protect builders and the building industry. Tarion seems to have drifted into “mission creep”, seeming to help builders it is supposed to regulate and fighting the consumers it is supposed to help.

I have a dream… that your newly-announced Consumer Bill of Rights will make a difference to new home buyers. The purchaser of a baby stroller in Ontario seems to have more rights than a new home buyer under the current system.

The Tarion warranty is mandatory, but fails many consumers. The appeals system is broken. See the CPBH analysis: 82% failure of homeowners at Tarion appeals:  http://www.canadiansforproperlybuilthomes.com/html/whatsnew/2014/sept/2013LATanalysis.pdf)

I have a dream… that buyers will not have to go to court to get defects resolved. The consumer is not the builder nor the warranty authority, so should not have to pay for others’ wrong-doing.

Tarion uses a tribunal system which often protects the warranty fund from claims and lets bad builders off the hook. If there is no deterrent to shoddy practices, they will not end. There are many troubling conflicts of interest here, which you and your consumer ministers have brushed aside.

I have a dream… that your promises are more than sound bites. If you really care about transparency and accountability, I hope Tarion will be subject to independent scrutiny by the Auditor General of Ontario, or the Ombudsman of Ontario. I hope executive compensation at Tarion will no longer be a secret.

You have the chance to use the new Consumer Bill of Rights to bring meaningful reforms to a monopoly that has not seen significant reforms in 37 years. If you are indeed the Premier of the people and you are listening to Ontarians, your Consumer Bill of Rights would not ignore new home buyers.

Why do you remain silent? We have brought Tarion’s failings to your attention many, many times.

I also have a dream, Premier Wynne, that you will support new laws to bring independent oversight of Tarion to protect the most vulnerable party in a new home purchase: the consumer.

Tarion, the monopoly provider of new home warranties, and licensor/regulator of new home builders in Ontario, has been on a recent media blitz to convince consumers they should have more “confidence” in the warranty, and believe its promises of “protecting new home buyers”, and “guaranteeing” all new homes. You may have read several of the positive spin articles resulting from this “charm offensive”, as its been dubbed, for example an article in The National Post on July 5th, and another in Urbantoronto.ca on August 29th. All portray Tarion as the white knight coming to the rescue of new home buyers, saving them from what they refer to as “underperforming” builders.

What Tarion omits to tell the public, and what journalists seem to have omitted to ask, can be found in a short list of inconvenient truths below. Many consumers have found out the hard way what’s not covered under the Tarion warranty. Forewarned is forearmed. 

Here are four points you might find useful before buying a new home:

1) Even the best qualified building inspector cannot discover latent or concealed defects. HVAC defects, faulty support beams hidden under drywall, faulty patio foundations, may not be visible even to the most qualified inspectors pre-delivery of your new home. Also, some items are not included in municipal inspections and there are also usually exclusions in private inspection contracts. “But we can’t inspect every two-by-four in a new home“, an Ontario Building Code official stated in February, 2012. Tarion does not do inspections of new homes either, they say: that’s the responsibility of the municipality. But defects happen during construction when there are usually no inspectors around. Faulty workmanship, inadequate supervision of sub-trades, lack of expertise, short-cutting in materials, unqualified trades, builders squeezing sub-trades to do work faster or for less money… all these may result in defects which are latent or concealed at time of an inspection. Many homeowners who’ve discovered defects after the 2-year warranty are out of luck: Tarion tells them they’re not covered. But how can you report a defect you can’t see? If you try to get compensation under the remaining 7-year “major structural defect” “MSD” warranty, you’re usually told you’re not covered either, since that usually only applies to near-catastrophic failures of the structure.

Tarion’s in-house “ombudsman” will tell you you can dispute Tarion’s decision by appealing to the “Ontario License Appeal Tribunal” (LAT). What he should also warn you about is you’ll be up against not just one lawyer, but two: Tarion’s and the builder’s. Tarion also has a seemingly unlimited budget to hire outside legal expertise to fight you as well. He should also tell you the failure rate for consumers for “MSD” claims at the LAT is close to 90%. (CPBH research 2012)

Many homeowners have complained they’re not being properly informed by Tarion about the unlevel playing field at the LAT from the outset. The LAT seems to work well for Tarion and its builders, since both can afford lawyers, and they can align their interests against the homeowner to get claims dismissed. Lawyers are interested in winning cases for their clients, not necessarily getting a cost-efficient and fair outcome for all parties. Remember the famous quote of a prominent U.S. judge: “we’re not in the justice business, we’re in the legal business”.

The LAT has ended up costing some consumers $40,000+ in legal fees for several days of hearings, excluding expert reports and time lost away from work. If you can’t afford legal representation, (and most consumers can’t), it will cost you several weeks in preparation, several thousands of dollars in expert technical reports, costs to serve court documents, etc., and your chances of success as an unrepresented party are dismal.  When asked how much an LAT hearing usually costs, Tarion’s President and CEO replied at the Annual Public Meeting on April 30th, 2014 “about $100″, (the court filing fee). Wonder how many LAT hearings he’s attended.

IF the Ontario Small Claims Court limit is ever raised to $50,000 from the current $25,000, (as in Alberta), many consumers feel they’d have better chances of getting resolution under contract law, by avoiding Tarion and the LAT completely, and pursuing the builder directly under breach of contract. In some Ontario Provincial courts, you can bring a claim within 2 years AFTER DISCOVERING the defect. It never made much sense to consumers you have to bring a Tarion claim within 2 years if its a concealed or latent defect. Tarion’s CEO, Mr. Bogach, replied in June 2012 in a meeting with consumers, “well, we can’t warranty everything.” Maybe not, but then don’t tell us Tarion “guarantees” all new homes.

Tarion should report all defects it has “inspected” – whether or not they warrant them – to give an accurate picture of a builder’s track record. Consumers would reasonably expect this from the licensor and regulator of the industry. The question “is it warranted?” should be a separate one from “did we find the defect to exist?”. Otherwise, Tarion is shielding shoddy builders from accountability. Exposure of their records could act as a deterrent to shoddy builders. What few consumers know is that builders can dispute defects getting reported on their records through another internal Tarion forum called the “Builder Arbitration Forum” or BAF.  Few builders turn up here self-represented.

2)  When you buy a  newly built home on the re-sale market, for example if its 2 1/2 years old, the advertisement for the property may say “it has a Tarion warranty!“. This makes the sales pitch more enticing, but in reality the 7-year warranty is very limited and narrowly defined. Not many real estate agents, and even some lawyers, won’t point out to you that this only covers “major” and “structural” defects, of a near-catastrophic nature. This warranty may prove useless to you since the definition is so narrow. It doesn’t cover HVAC defects, for example, one of the most costly systems in a home. If Tarion denies coverage under the 7-year warranty, your recourse is the LAT, which many consumers refer to as a legal “meat-grinder”, for reasons outlined above.

3)  Tarion says they take all measures to “work with homeowners” and “step in to resolve claims” before they get to the LAT. Sounds like a great idea, if that’s what they’re actually doing. Many consumers however have not been offered this service. If mediation is offered, it should be more than just an e-mail cooked up between Tarion and the builder’s lawyer: it should involve the homeowner as a full and equal participant in resolving the issue. A home is the largest investment consumers will make in their lives; the homeowner deserves to be taken seriously.

The various Liberal-appointed Ministers of Consumer Services, (about five of them in six years), continue to tell the public “Tarion is making a concerted effort to resolve complaints at an earlier stage than in the past.” Why does it always sound as though this is a near-Sisyphean task for them, like rolling a mammoth boulder up a cliff only to have it come barreling back down each time? Consumers are fed up with platitudes from the Ministry such as “we’re working with Tarion“, we’re striving for “better customer service” and “better communication“, we want consumers to have “additional confidence in Tarion’s decision-making process“. They could save themselves this trouble and expense. What consumers really want from Tarion as regulator of the industry and from the Ministry as “oversight” authority, is a home free of defects in workmanship and materials as promised under Ontario law.

4)  Tarion’s “Ontario Builder Directory” which is supposed to disclose track records of Tarion-licensed builders has been under criticism for years as incomplete and inaccurate. Consumers have told Tarion it is misleading; former MPP Marchese called it in November 2013 “less than useless“.  Buried deep in the Tarion website, you could easily miss it. Yet new home buyers are entitled to rely on the regulator of the industry to disclose information it has in its files on construction defects it has inspected caused by its licensed builders. Whether they were covered under the warratny or not. Again the rolling-the-rock-up-the-mountain agonizing: “we don’t want to take away someone’s livelihood” or “we can’t hold someone responsible for what happened in the past” says Tarion’s CEO (Annual Public Meeting, April 2014).  Even major structural defects reported to and inspected by Tarion in homes built before 2012 are not published on this Builder Directory.  Consumers have repeatedly said they want ALL construction defects reported to and inspected by Tarion’s “field representatives” to be listed. The public interest should override any previous agreements Tarion has made with builders to keep this information off the public record.

Perhaps the rock of Sisyphus is actually the building lobby’s influence over Tarion and provincial politics.

Tarion’s promises of “protecting the consumer” and “guaranteeing” new homes deserve much closer scrutiny. Sadly, there is no consumer watchdog with authority over Tarion. Neither the Ombudsman of Ontario nor the Auditor General have this oversight authority. Premier Wynne seems to have decided to follow McGuinty’s time-proven strategy of turning a blind eye to consumer problems with Tarion. Yet in 2012/13/14 she saw several petitions in the Legislature and Bills calling for increased transparency and accountability at Tarion. All to date in legislative limbo. Many consumers feel the Liberal government has allowed this problem to fester, and its Premier Wynne’s responsibility to fix it.  Undoubtedly an unpopular topic with building industry lobbies.

Social media sites such as this one, and the Facebook page: http://www.facebook.com/maketarionaccountable), have cropped up recently to give a voice to consumers who don’t have consultants, lawyers, PR firms, lobbyists, or pulpits in our national media to warn others of their experiences with Tarion. 

“Consumers should do their research” says Tarion’s CEO. Indeed.

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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