Earlier this year, I participated in a focus group called together by The Honorable J. Douglas Cunningham, Q.C. for the purpose of providing information to be used in a review of the Ontario New Home Warranties Plan Act and Tarion Warranty Corporation. Justice Cunningham has just published his interim report for public comment.
The following is taken from the summary of the document and outlines the concerns that Justice Cunningham has heard during the review:
“Tarion’s role and business model
I heard from some that Tarion’s multiple roles creates a perception of a conflict of interest. Others believe there may be synergies and benefits in having a single entity perform the various functions. I have also heard some suggest that Tarion as the sole provider of the new home warranty in Ontario has little incentive to improve. On the other hand, others suggest that a single, non-profit provider is favourable as it allows for consistent delivery and effective management, while maintaining low costs for consumers. I will consider whether Tarion should continue to perform all of the functions it does today and whether it should remain the sole new home warranty provider in Ontario.
Dispute resolution process
The dispute resolution process was the primary concern of most of the homeowners I spoke with. While Tarion has made progress in resolving disputes earlier and more effectively, I believe there are opportunities for improvement in some areas. These include the timelines for submitting warranty claims, the builder repair period, the Construction Performance Guidelines, the conciliation inspection process, the Licence Appeal Tribunal, and the Builder’s Arbitration Forum.
Consumer education
Almost everyone I spoke to said that consumer education is fundamental to consumer protection. Given its importance, I will consider options relating to what type of consumer education should be provided, who should provide it, and the optimal format.
Warranty coverage and duration
While Tarion has made enhancements to warranty coverage and duration, some have questioned the adequacy of the coverage given the rising cost of homes in some areas of the province. I will look at Tarion’s process for assessing the warranty coverage amounts and duration to address these concerns.
Regulation of builders and vendors
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Board governance
Over the past decade, there have been significant changes to diversify the composition of Tarion’s Board of Directors. However, many continue to perceive the Board to be builder dominated and motivated to favour builders over homeowners. I believe getting the Board composition right is critical. I will consider options to diversify the Board, including changes to the Board selection process.
Accountability, transparency and oversight
Many people I met expressed a desire for greater accountability, transparency and oversight. This was especially noted by homeowners, many of whom spoke of Tarion as a government agency acting on their behalf and wondered why the government did not play a more active role. In my Report I consider options relating to external oversight, the government’s role and disclosure of information.
Other
Other issues raised in my discussions included the lack of clear definitions in the ONHWP Act , illegal building, the need for more condominium specific provisions in the legislation, Tarion’s organizational structure, the lack of Tarion representation in smaller communities, the lack of transparency of Tarion’s Consumer Advisory Council and the builder liaison committee.”
There is much more in the interim report, which can be found at this link:
Justice Cunningham is interested in your feedback by October 14, 2016. The final report will be released later this year.
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