Justice Cunningham's Review of Tarion

Last month I had a meeting with Justice Cunningham to discuss his current review of consumer protections for owners of new homes in the face of mounting concerns surrounding Tarion. Below you will find a follow up letter I sent to Justice Cunningham outlining the concerns I raised during out meeting and my suggestions for area's of interest to be addressed in the review.

I'm pleased to report our discussions where thoughtful and positive and that I am looking forward to the Justice's report which I'm confident will provide some much needed relief for new home owners. 


Dear Justice Cunningham,

Thank you for taking the time to meet with me to discuss the current and ongoing issues with the Tarion Warranty Corporation as it pertains to your review of the organization. I hope you found the conversation both informative and enjoyable as I did.

I would like to take the opportunity to document the concerns and perspectives raised during our conversation.

First and foremost, I do not see any compelling reason for the existence of Tarion. Anytime we see a delegated administrative authority mandated to be the exclusive provider of any service at ‘arm’s length’ of the government, we see the consumer suffer. This is exacerbated when the subordinate body also encompasses the multiple and frequently competing roles of providing the insurance, acting as the industry regulator, and determining remedies.

We must first ask ourselves this question: If it is absolutely necessary to mandate new home owners to purchase home warranties - then who or what is best suited to deliver that mandate? Is that service better delivered in a competitive marketplace as we have seen with auto insurance and other government mandated insurances; or a monopolistic cartel comprised of businesses that benefit from the mandate?

Secondly, are the existing bundle of Tarion jurisdictions; insurance provider, industry regulator and inspection/compliance not conflicting and acting in manner prejudicial to the consumer?

Both of these questions need thorough examination and analysis.

At the very least we should expect new home sellers to be mandated to provide deposit insurance in order to protect first time consumers from unscrupulous builders or insolvency. Once again, would this be best delivered in a competitive market place or by a Crown agency or other subordinate body of the legislature? This is a growing issue with the explosive popularity and demand for condos in the GTA and other urban centres, as first time home buyers commit large sums sometimes years in advance of a building being completed or shovels hitting the ground.

Consumers experiencing issues with new homes and attempting to find remedies from Tarion should be substantially streamlined. As we have seen, when consumers have issues with their warranty not rectified or remedied by either Tarion or the builder they must go through the LAT (License Appeal Tribunal), which has a less than encouraging record for consumers. Only after the LAT process is the consumer then available to seek a remedy in the ordinary courts. Remedies with Tarion must be reformed for consumers to be justly protected. A mediation process similar to what is practised in our civil courts in lieu of the LAT is a more practical and fundamentally more just for a lay person seeking remedies.

While there are further areas of concerns that I have observed, these are largely ancillary or consequential to the main questions already identified. While there is confusion between design/warranty issues, complexities with overlapping jurisdictions with the Ontario Building Code, municipal inspectors/Tarion, and just who is, and who is not, covered by Tarion. These subsequent concerns become moot when the main questions are adequately resolved.

Once again I hope you find this information contributes and assists your ongoing investigation of Tarion, and that it leads to real, actionable change that helps both consumers and home builders, and allows us to remedy the long standing issues at Tarion.

If you have any questions or would like any further information or insights, please don’t hesitate to contact me.

Sincerely,

Randy Hillier

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Showing 2 comments

commented 2016-04-14 15:13:29 -0400 · Flag
Voices like yours and the wonderful advocates that speak for homeowners is so appreciated. This letter sums up so much with what is going on and what is needed. Change. IMO a dismantling from ground up. More homeowners need to be on the board and have positions within the Corporation to better aid and essentially work for their clients, the homeowner NOT the Builders. If it’s one thing that I can add to this is perhaps the personal and emotional side of what homeowners have to go through. The undaunting task of being unrepresented at the LAT and facing one lawyer perhaps two is quite a task. Having that all-important expert report is more than a mortgage payment for some people. You have to dip into your life savings to fight a warranty that you’re made to pay for. There needs to be a change. There needs to be a drastic change.
commented 2016-04-14 14:41:15 -0400 · Flag
Dear MPP Hillier, Thank you for sending this letter to the Tarion reviewer. At the end of your letter, you say you hope Tarion is improved for both builders and consumers. Builders seem to be already well represented and protected by their own powerful and politically connected lobby groups, such as OHBA, its many affiliates, and BILD. Consumers have no one. Except presumably Tarion. The consumer protection mandate of Tarion should focus on protecting new home buyers as its primary activity, not new home builders. Their own affluent lobbies already do that. For Tarion to be suing it own customers (consumers) at the LAT is not only wasting taxpayer money, its not a problem-solving body. Tarion can’t be protecting both builders and consumers at the same time, its either one or the other as a prime activity. This is the “walking conflict of interest” many have pointed out to the Ministry for years.

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