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Consumer Protection : Illegal Builders Cost Us All

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Consumer Protection : Illegal Builders Cost Us All

Tarion’s mandatory new home warranty is not an option, it’s the law

Ontario has strict rules when it comes to building and selling new homes. These rules have been put in place for good reasons – they help protect new homebuyers and give them confidence that their builders have the financial and technical ability to build homes that meet industry standards.

The rules are very clear.

Before anyone can legally build or sell a new home or condominium in our province, they must be registered with Tarion. In addition to ensuring that the builder has the financial capacity to build new homes and meet their warranty obligations, the registration requirements also help determine that builders have met the educational and technical criteria needed to construct a new home.

What’s more, builders must enroll each new home in the warranty program before construction begins. This makes new homebuilders accountable for their work and formalizes their obligation to provide the warranty on the new home.

So, if a person builds or sells a new home without being registered with Tarion, they are building illegally. It is also illegal to begin building a home without first enrolling it into the warranty program.

Unfortunately, when illegal building does occur – and it happens across the province – it puts buyers at risk because they are likely unaware of their warranty rights and responsibilities, including filing deadlines for any deficiencies that need to be addressed.

In our experience, builders who ignore the registration and enrollment rules may also ignore other protocols, including Ontario Building Code standards, health and safety regulations, and necessary insurance coverage. This can leave homeowners living in substandard and unsafe homes.

In 2016, Tarion paid out over $2 million in warranted claims on illegally built homes, because, unlike some other provinces in Canada, Ontario’s new home warranty provides consumers with protection on almost all new homes, even when those built by illegal builders.

Over the years, we have heard too many heartbreaking – and often preventable – stories. Like the couple that lost their life savings to an illegal builder when he took their money but never built their new home. Or the single woman who was left stunned when the builder she hired actually tore down her existing house and then left town, leaving her with a hole in the ground. Or the illegal builder who, having used the wrong type of wood logs, constructed a fast-rotting home that became uninhabitable.

Don’t let an illegal builder spoil one of the most important – and expensive — purchases you will make in your lifetime.

Before working with any builder, check the Ontario Builder Directory on Tarion.com to ensure your builder is registered with Tarion – which is required by law – and qualified to build homes. The directory lists every registered builder in Ontario and provides a 10-year history of where they’ve built homes, how many, and if they have failed to repair any warranted defects.

It will also tell you if a builder has been recognized for excellent customer service by their home buyers with a Homeowner’s Choice Award.

Tarion also publishes a list of people who have been charged for illegal building in the last three years. In 2016, the efforts of Tarion’s Enforcement Team led to 170 convictions, $488,000 in fines and one jail sentence. Type “illegal building conviction report” into the search bar on Tarion’s website to view the latest report.

Buyers should understand the mandatory warranty coverage that is provided for almost every new home and condominium in Ontario. It starts with deposit protection and delayed closing compensation, and includes three separate warranties that last up to seven years after you take possession of your new home.

If your builder does not provide you with a Homeowner Information Package at or before your pre-delivery inspection, ask for one and confirm that your new home is enrolled with Tarion. If your builder says the home does not have to be enrolled, or they have their own separate warranty, call Tarion.

There is only one mandatory new home warranty in Ontario, and it’s not an option – it’s the law.

Howard Bogach is president and CEO of the Tarion Warranty Corporation. His column appears five times a year in HOMES Magazine. For more information about how Tarion helps new home buyers, visit tarion.com or find them on Facebook at facebook.com/tarionwarrantycorp

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