New Homes: Ontario Overhauls Broken Tarion System

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Separate Regulator For Builders & Vendors; Decisive, Transparent Action Says Minister Walker

PORT HOPE: Ontario has announced changes for new home warranties, including moving oversight for new home builders and vendors away from the Tarrion corporation that provides the warranties.

Government and Consumer Services Minister Bill Walker says establishing a separate regulator will address a conflict of interest in the current structure – in a bid to “protect hard-working Ontarians making one of the biggest purchases in their lives — a new home.”

“There are many families across the province who have faced difficulties over the years when seeking a solution from Tarion,” said Walker. “For our government one thing is clear, Tarion is broken. That is why I am pleased to announce that we are taking decisive action to put the people of Ontario first by transforming Tarion and strengthening consumer protection.”

Tarion Warranty Corporation has overseen nearly all facets of the home building sector for the past 40 years, and a review found fault with its complex structure and overarching mandate, with both builders and homeowners questioning its objectivity. The government is taking action by:

• Establishing a separate regulator from Tarion for new home builders and vendors to address conflicts of interest.

• Planning to introduce legislative amendments that, if passed, will enable the government to require Tarion to make executive and board compensation publicly available and move to a more balanced skills-based board composition.

• Exploring the feasibility of a multi-provider insurance model for new home warranties and protections in Ontario.

• Introducing new initiatives to better inform and protect purchasers of cancelled condominium projects.

Tarion is expected to continue to provide services to new home owners, builders and vendors during the transformation with greater government oversight.

The Honourable Justice Douglas Cunningham released a 2016 independent report with several recommendations on transforming Tarion. Noted in the report is an inherent conflict of interest in the current structure of Tarion that leaves new home owners vulnerable. “Establishing a separate regulator for new home builders and vendors addresses the current conflict of interest with Tarion,” said Walker. “Today’s announcement will help make Tarion more accountable and transparent and provide quality service for the people of Ontario.”

The initiatives announced on Wednesday support the government’s broader housing supply action plan by helping to remove barriers to home ownership.

“I have heard countless stories from families in my riding who have experienced difficulties with Tarion Warranty Corporation,” said David Piccini, MPP for Northumberland – Peterborough South. Ontario has further asked Tarion to work with the Condominium Authority of Ontario to better inform people of the potential risks associated with pre-construction condominiums.

• New homes built for resale or under contract with an owner must be  enr olled in the statutory home warranty program.

• In 2017, 68,945 new homes were enrolled in the warranty program — 46 per cent of which were condominium units.

• In 2017, 5,549 builders and vendors were registered with Tarion.