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.