On November 5, 2015, David Orazietti, Ontario's Minister of
Government and Consumer Services, announced an independent review
of the Ontario New Home Warranties Plan Act and the Tarion
The review, conducted by The Hon. J. Douglas Cunningham, former
Associate Chief Justice of the Ontario Superior Court of Justice,
will focus on ways to improve consumer protection, accountability,
transparency and the governance of the Tarion Warranty Corporation.
Justice Cunningham served on the Ontario Superior Court from 1991
until his retirement on September 30, 2012.
Tarion is responsible for administering the Ontario New Home
Warranties Plan Act, which was passed in 1976. The
Act provides new home warranty protections and regulates
the construction and sale of new residential dwellings in Ontario.
Except in a limited number of cases, new homes built for resale or
under contract with an owner must be enrolled in the warranty
program, and builders must be registered with Tarion.
365,392 homes in Ontario were under warranty at the end of 2014.
49,890 new homes were enrolled in that year, built by Tarion's
5,400 registered builders. Of those new homes, 19,087 (38.3%) were
In 2014, Tarion paid out 419 claims totalling almost $9.9
Tarion recently implemented a number of changes, including
enhancing warranty coverage and improving enforcement against
illegal building. The Protecting Condominium Owners Act,
2015, brings further changes by providing some coverage for
residential condominium conversion projects. As part of the
Protecting Condominium Owners Act, 2015, the Ontario
New Home Warranties Plan Act will be amended so that most of
the warranty protections available to buyers of new condominium
units will also apply to certain condominium conversion projects.
The warranties will not apply to the pre-existing elements of a
condominium conversion, meaning that no warranty will be provided
to ensure pre-conversion building elements have been constructed in
a "workmanlike manner" and are free from defects. All
other statutory warranties will apply.
Condominium conversions are not currently protected by the
statutory warranty plan. With a growing number of condominium
projects involving the conversion of an existing building, whether
previously residential or otherwise, the Province was concerned
that purchasers of units received no statutory warranty coverage
even if significant new construction was required to complete the
conversion to condominium units.
The current review will assess best practices in the area of new
home warranties, examining Ontario's current scheme and
comparing it to those in other jurisdictions. Justice Cunningham
will also consult consumers, the home building industry, the
municipal sector and others as appropriate, to assist him with
preparing recommendations that will enhance Tarion and the entire
Although the review will provide recommendations related to
accountability, transparency and board governance, the main focus
appears to be on improving consumer protection. It is expected that
the report may comment on topics including the claim submission
process, repair timelines, the dispute resolution process, warranty
coverage levels and duration, and the homeowner's onus to prove
This approach is consistent with other reviewed recently
conducted by the province, including the recent review of the
Condominium Act, 1998.
Justice Cunningham will be holding public consultations in early
2016. He intends to provide a draft report to the Minister by May
31, 2016, with a final report with recommendations being submitted
prior to June 30, 2016.
I know of many situations where home buyers and condominium
corporations were successful in pursuing a warranty claim with
Tarion. I also know of many other situations where home buyers and
condominium corporations were not successful, for many different
reasons. No matter your personal experience, this review has the
potential of having a significant impact on Ontario's home
buyers, builders and condominium corporations.
I encourage everyone to provide comments on the Ontario New
Home Warranties Plan Act and the Tarion Warranty Corporation
by participating in this review. You can do so by emailing your
thoughts and submissions to TarionReview@ontario.ca.
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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