Justice J. Douglas Cunningham flagged calls for a dedicated section for and further rules unique to condominiums under the Ontario New Home Warranties Plan Act in an interim report on the Tarion review released Aug. 31. Condominium boards and industry professionals also raised with the special advisor specific concerns about claim deadlines and warranty coverage through the course of the review.
A number of condominium boards told Justice Cunningham that the timeframe for submitting performance audit reports to Tarion, which triggers the warranty claim process, is inadequate. This remains the case, they added, even with recent changes to the Condominium Act that will give condominium boards one year from registration to do so when the changes take effect. The challenge, condominium boards and lawyers explained to him, was that the one-year window often passes before the common elements are finished and can be assessed for defects.
One way Justice Cunningham contemplated addressing this in the interim report is to either extend the timeframe for submitting claims or replace it with a “reasonableness” measure.
In a related concern, condominium boards said to Justice Cunningham that in some cases developers withhold important documents. These materials, which are relied upon by the consulting architect or engineer to conduct the performance audit, can include drawings, plans and specifications.
Some of the experiences and issues encountered by home owners were shared by condominium corporations, according to the interim report.
Condominium boards and home owners alike bear the burden of proof to demonstrate that defects are warrantable claims, which can be both a confusing exercise and a costly exercise when experts need to be hired, Justice Cunningham wrote. He offered as possible options educating home owners on this burden of proof and transferring responsibility for diagnosing problems to Tarion, after home owners have submitted sufficient proof of the symptoms.
There was also a perception among some home owners that some builders promise to make repairs, run out the clock on the deadline for conciliation requests and stop communicating after the deadline expires. However, Justice Cunningham noted, he also heard stories about some builders doing the opposite and going out of their way to accommodate repair requests past the deadline.
Another issue faced by condominium boards and home owners, to which lawyers attested too, is Tarion leaving the choice of repair up to the builder. The result, said these parties, can be that the condominium corporations or home owners are stuck paying the long-term price when low-cost, quick-fix solutions are applied.
Justice Cunningham heard from home owners from all parts of Ontario that the coverage period for water penetration ought to be lengthened from two years to five and the coverage period for major structural defects ought to be lengthened from seven years to 10. Condominium boards also expressed a desired to see the scope of what constitutes a major structural defect widened, although Justice Cunningham didn’t elaborate on what they wanted it expanded to include. On those points, he raised the possibility of changing the way Tarion evaluates warranty program coverage and duration.
These are just a select few of the special advisor’s preliminary findings in the Tarion review, which has reached builders, consumer advocacy groups and the warranty corporation’s board, employees and leadership, among many others. More than 200 home owners and industry professionals participated in public consultations in eight cities across Ontario; 80 individuals and 15 organizations made more than 500 written submissions from Nov. 5 last year to July 6 this year.
One of the written submissions was an independent survey conducted by the Canadians for Properly Built Homes (CPBH). The consumer advocacy group, which welcomed news of the review, continues to raise concerns about its terms of engagement.
“CPBH is still studying this interim report,” the group said in an emailed statement to media on Aug. 31. “While a number of key issues are included, we remain very concerned that there was woefully inadequate consumer input in this process.”
The Ontario government launched the independent, public review of Tarion last fall. Justice Cunningham was appointed to examine the province’s new home warranty legislation and the corporation that administers it, and make recommendations on how to improve consumer protection.
Justice Cunningham noted that he has not made any decisions about recommendations yet, nor should the options outlined in the interim report be considered exhaustive. He added that he will be accepting feedback via email at [email protected] until Oct. 14.
Justice Cunningham is due to submit a final report to the Ontario government with his recommendations this fall.
Michelle Ervin is the editor of CondoBusiness.