Tarion New Home Warranty: Ontario New Home Builders should prepare for these changes.

Planning to keep building?

The “Special Audit of the Tarion Warranty Corporation” of 2019, provides a clear direction of what is coming for Ontario Home Builders and isn’t privatization!

“consider all data about a builder’s past building quality and warranty performance when deciding whether to grant a future license”

What’s this mean to me?

1. Your building Practices are under scrutiny…

The Special Audit listed several recommendations that Tarion has agreed to adopt or work on adopting.

Implementing a risk-based inspection process for code compliance during construction

Tarion and municipalities to report to each other all significant instances of builder non-compliance with Ontario Building Code.

Additional education for supervisors of day-to-day construction activities.

2.  Your financial history, is no longer in the past…

Builders must establish that they have the financial means to complete proposed projects and honour their warranty obligations.

All cancellations of projects will be reviewed and taken into future licensing decisions.

Not allowing builders to market or sell condominium units unless they have applied or obtained building permits.

Generally, all Builders will pay more in Security Deposits as Tarion has been using 1990 house values to calculate security deposits. Poor performing builders.

You will pay more and be limited by the number they can build.

Tarion to provide sufficient resources to improve collections from builders and their guarantors.

Publicly report on collection efforts.

3. Your customers are empowered…

The report recommended:

The 30-day report is removed and permits homeowners to submit it anytime during the first year.

Reducing the amount of time provided for builders to make repairs.

Redefining “finished home” or A means ensuring one year warranty begins only after items are finished or Expanding the minimum occupancy requirements of OBC.

Implement a Builder Code of Conduct to include clear consequences for breach. Consider breaches in re-licensing decisions.

Commit sufficient staff resources to initiate and complete investigations into all homeowner complaints against builders.

Builder Directory be expanded to include (open to public)

Results of Tarion investigation where the builders behavior lacked honesty and integrity.

Past convictions for illegal building activities.

The number and percentage of homes with Major Structural Defects.

The amount of money owned to Tarion that remains outstanding.

The number of defects under warranty that a builder refused to repair.

The number of defects under warranty that a builder refused to repair that were due to OBC violations.

All this and let’s double our output over the next ten years…..right!

Recently the Report of the Ontario Housing Affordability Task Force recommended adding 1.5million homes over the next 10years. This is in an industry that on average produces less than 70,000 new homes per year and has historically struggled with enticing people into the trades. Arguably these rules will make builders better and raise consumer trust however there is concern for what type and how many builder will choose to remain in the industry. It is very likely that the recommended changes to Tarion will be felt most by small to medium builders as full time focused service and quality control staff will be required to comply.

There are solutions, read this article on how partnering with Home By Six can show you a new way to deliver premium home warranty service.

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