Important Changes Are Coming to Tarion

In the next year or two, we can expect to see some big changes to Ontario’s system of new home warranties (currently administered by Tarion).

In October of this year, Ontario Auditor General Bonnie Lysyk completed an audit of Tarion, which concluded that the current system, administered by Tarion, does not properly protect the interests of new home buyers (and condominium corporations) in Ontario.  [The report of the Auditor General follows the detailed review of the Tarion process conducted by Justice Douglas Cunningham in 2017].

The Auditor General’s “Overall Conclusion” begins with the following:

Our audit concluded that Tarion’s processes and practices do not always conform to the spirit or intent of the Ontario New Home Warranties Plan Act. Tarion lacks effective processes and standards to consistently fulfill its dual mission of enforcing home warranties and regulating builders.

The audit goes on to find that many of the current processes tend to favour builders over new home buyers (and their condominium corporations).

The current government has indicated its intention to make significant changes to Ontario’s system of new home warranties.  Key changes that are being considered include the following:

• Changes to Tarion’s Governing Board, including changes to the size and composition of the Board as well as required public disclosure of Board and Executive compensation.

• Creating a new organization – separate from Tarion’s warranty administration – to handle regulation (including licensing) of Builders and Vendors.

• The possibility of a “Multi-Provider Insurance Model” to replace the current model (under which Tarion serves as the single provider).

• Steps to better inform pre-construction condominium buyers (of their warranty rights).

The province is currently in the midst of consultation on the above matters with various stakeholders.  [Changes to Tarion’s Board are already underway.  For more detail on those changes, visit tarion.com.]

As a key stakeholder, the Canadian Condominium Institute (CCI) formed an ad hoc Tarion Subcommittee, to participate in the consultation process.  Our own Christy Allen chaired that subcommittee. The subcommittee is focused on ensuring that the warranty process is fair and effective for new home buyers and condominium corporations – with decision-makers (in relation to warranty claims) who are independent from the provider (whether the provider is Tarion or an insurer), and with minimal costs for new home buyers and condominium corporations to engage in the process.

We don’t yet know what changes are coming….but it’s now more and more clear that big changes are coming….and in our view this is great news for new home owners and condominium corporations in Ontario!

UPDATE: The Government of Ontario has recently looked at the proposal for a multi-provider insurance model and has decided not to proceed with the proposal for the time being.

Stay tuned to Condo Law News to keep up to date on the latest developments in condominium law!