Canada: Builder Issues With Tarion

Builders Arbitration Forum and Alternatives to the Builders Arbitration Forum

Tarion, pursuant to Bulletin 41, created the Builders Arbitration Forum (BAF). Builder Bulletins are promulgated from time to time by Tarion to set out requirements builders must meet as part of the terms and conditions of continued registration.

Bulletin 41, does not have the force of statute or regulation, but is designed to provide to builders a right of appeal to BAF from findings of breaches of warranty, which appeal rights are subject to Tarion's exclusive discretion. Theoretically, BAF allows builders to appeal all unfavourable conciliations to that forum, including delayed closing claims, contested substitutions, deposit refund disputes, and breaches of warranty.

However, the right of appeal is not automatic, and is certainly not as broad as an owner's right of appeal to the Licence Appeal Tribunal (LAT) when Tarion rules against a homeowner.

Specifically, with respect to the right to proceed to BAF, the builder must be a builder in good standing, which means that there are no fees owed to Tarion, that the registration has been renewed and remains intact, there are not amounts owing for past breaches of warranty and all appropriate security has been provided.

In addition, a builder cannot be a builder that Tarion decides is unable or unwilling to carry out its warranty obligations, again determined at the exclusive discretion of Tarion.

If any of these factors exist, then Tarion will unilaterally deny the right to such an appeal and the builder is out of luck, in that he has no right to challenge Tarion's decision not to permit the appeal to proceed.

Even if a builder does appeal breaches of warranty to BAF, Tarion can subsequently decide, that it will refuse to renew or propose to revoke the builder, and if that occurs, then the issuance of such Notice of Proposal is inconsistent with the builder being in good standing, and the right to appeal to BAF is lost

What is a builder to do when faced with an unfavourable breach of warranty determination with which he disagrees, given these obstacles to BAF?

A builder may decide not to appeal breaches of warranty to BAF, because only in the most routine cases will Tarion actually allow such a proceeding to occur, and those are the cases in which there are minor breaches of warranty and the cost of proceeding to a hearing and prevailing for the builder, is greater than the cost of the actual deficiency.

That being case, BAF as an appeal route is often of little use to most builders; in effect, builders have no viable right to appeal breaches of warranty findings against them, because of the many restrictions in qualifying for a BAF appeal.

Alternatives to BAF

It may be more advisable for builders to consider by-passing the BAF procedures and concentrate on preparing to defend what they believe to be invalid or mistaken breach of warranty findings by Tarion. Builders can be far more pro-active by accumulating and preparing evidence to refute such breach of warranty findings than by filing an appeal to BAF that Tarion can easily deny.

When Tarion carries out a conciliation inspection and finds breaches of warranty, it can subsequently cash settle those breaches warranty or pay to have the work done, and the builder is often left to defend against a lawsuit that Tarion may commence to recover the settlement amount; in the alternative, the builder may have to defend against Tarion proposing to revoke the builder for having a record of breaches warranty and failing to indemnify Tarion.

If either of these routes is taken by Tarion, then it behooves the builder, as early as the conciliation stage or even beforehand (when the complaint first arises), to obtain its own consultant's report with respect to what it believes to be the actual existence and scope of deficiencies, rather than leaving the field open to Tarion to make initial breach of warranty findings, and then subject such claims to additional investigation, wherein Tarion brings in consultants that prepare elaborate reports for Tarion supposedly detailing and confirming breaches of warranty, and/or expanding on such breaches.

The builder should spend far more time preparing its own evidence, either at the conciliation stage or thereafter, rather than worrying about whether it should appeal such matters to the Builders Arbitration Forum.

Considerable time and effort may be spent appealing to BAF, only to discover at the last minute that Tarion has decided that the builder is not in good standing or decides to issue an NOP against the builder, all of which stops the BAF process.

Resources should be spent on ensuring that the builder arrive at the conciliation with his own consultants and experts to ensure he will be well prepared to defend against any unfavourable findings of Tarion. In order to ensure access, the builder would be well advised to have consultants or independent contractors accompany him to inspections prior to any prospect of conciliation, because at conciliations owners can ask that the builder be excluded, and if so, the builder's opportunity for reasonable access may be lost.

In circumstances where Tarion is asked to review a long list of complaints by the homeowner on a one year claim, or a Condominium Corporation Year-End Performance Audit, the builder has to expect that in most instances, Tarion will find breaches of warranty, and if that is the case, then the builder should be ready to refute those breaches of warranty by assembling his own evidence against such initial complaints.

If Tarion settles a claim and proposes to revoke the builder, the builder can appeal such revocation to the Licence Appeal Tribunal. In the circumstances of an appeal to the Licence Appeal Tribunal, the builder does not have to convince Tarion that it is a member in good standing, it does not have to worry about whether or not Tarion has unilaterally found it to be a builder that is unable and unwilling to perform its warranty obligations; in such circumstances the appeal right is a statutory right, not a discretionary right like a BAF hearing and all of the issues surrounding the breaches of warranty and failure to indemnify can be heard at the LAT hearing.

Similarly, if Tarion sues the builder for recovery of funds expended in a settlement it has made with a homeowner or Condominium Corporation, the builder has every right to defend against such action and again does not have to worry about its status with Tarion, as it does in trying to assert its rights to BAF.

Therefore, the importance of this newsletter to builders is that I urge all builders to prepare to defend themselves any time an owner makes a claim, because the owner can decide that he or she would rather have Tarion settle the claims, rather than allow the builder access to resolve claims pursuant to its statutory warranty rights. Although builders are entitled to full access to inspect and repair in order for the statutory warranty to work, this often is not the case.

There are too many circumstances where clients have been denied access to homes and Tarion has carried out conciliations in their absence; thereafter, the homeowner has not allowed the builder back in to remedy deficiencies, the claim is settled by Tarion and Tarion invoices the builder for an amount that bears no relationship as far as the builder is concerned to any deficiencies that might have existed.

In many instances, by the time that process has occurred, it is difficult, if not impossible, for the builder to access to the premises and prepare adequately to defend against what it believes to be erroneous findings of breaches of warranty or monetary settlements that bear no relationship to cost of repair.

In today's climate, it is important for a builder to ensure he has the evidence to support his beliefs, and to that end, I cannot emphasize too strongly that he bring his consultant, that he be at the conciliation, that the document every failure to obtain access, every communication with the homeowner or Condominium Corporation, because Tarion, when faced with a persistent claimant, will not hesitate to settle the claim, invoice the builder and pursue the builder thereafter.


All registrants must be diligent in communicating with Tarion regarding disagreements they have with Tarion's unilateral actions, including denial of access, findings of breach of warranty, findings by Tarion that the builder unable and unwilling to perform his warranty obligations and denying the right to proceed to BAF.

Without access, warranty obligations cannot be met and builders cannot mitigate their damages. In such circumstances, the builder's warranty becomes meaningless. In effect, the warranty becomes Tarion's warranty and the builder is simply left to pay up or jeopardize his registration.

Tarion's policies regarding the builder's very limited rights to appeal to BAF, the absence of protection from denial of access and unilateral findings by Tarion that a builder is deemed to be unable and unwilling, all conspire to prevent the Act from working to enable builders to resolve warranty claims, deal with after-sales service and successfully challenge decisions of Tarion with which they disagree.

The builder must resist this rush to judgment by Tarion whose policies short circuit the process, otherwise, Tarion is simply in the business of processing and paying claims received from homeowners, and thereafter extracting payment from the builder.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions