A panel of three Divisional Court Judges have affirmed
that when a homeowner sells their home, they lose their standing to
maintain a Tarion warranty claim under the Ontario New Home
Warranties Plan Act (the "Act").
Ms. Blair took possession of her new condominium townhome in
February, 2010. Thereafter she made a complaint to Tarion about
insufficient heating in the home. Ultimately, Tarion ordered that
duct modification work was required in all nine townhouse units in
Ms. Blair installed a gas fireplace in her home without
Tarion's approval (to address the heating issue) and claimed
compensation for the cost of her $17,000 fireplace. Her claim was
denied and Ms. Blair appealed the decision to the License Appeal
During the appeal process, Ms. Blair disclosed that she had
since sold her home and indicated that as part of the agreement of
purchase and sale she and the purchaser had entered into a
collateral agreement whereby Ms. Blair sought to continue her claim
Tarion successfully brought a motion to have the appeal
dismissed for lack of standing and Ms. Blair appealed to the
The Divisional Court reaffirmed the principles set out in one of
its previous decisions which held that only current owners, and not
former owners, are entitled to pursue a warranty claim under the
Act. The Divisional Court also ruled that the Act prohibits owners
from contracting out of the provisions of the Act, and therefore
any purported assignment of the warranty from the current owners
back to Ms. Blair was void.
The decision may be of particular interest to individuals who
wish (or need) to sell their home while a warranty claim is still
in the process of being adjudicated. The Divisional Court sets out
a number of mechanisms that may be validly used by vendors and
purchasers to account for yet to be adjudicated warranty
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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