Tag Archives: Illegal building


Tarion introduces new information gathering process

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Tarion introduces new information gathering process

Condominium developments come in all shapes and sizes. Some are built brand-new from the ground up while others may incorporate part of an existing foundation or other pre-existing elements. There are rules around how much of an existing structure can be used for the building to still qualify as a new build, and therefore be eligible for warranty coverage provided under Tarion Warranty Corp.

Some builders may proceed with a construction project without enrolling it with Tarion, believing that a pre-existing foundation means their units are not eligible for warranty coverage. Depending upon the situation, this may be a wrong assumption and purchasers of these units could be missing out on the warranty protection they’re entitled to.

As the regulator of the new home building industry, Tarion investigates potential cases of illegal building. And illegal building includes situations in which new construction projects – condominiums or freehold homes – are not enrolled with Tarion.

Last year, we had a case that involved a condo development in cottage country that was built on an old factory foundation. Our Compliance & Investigations team determined that the existing foundation was too small for the project not to be considered a new build. Thanks to our investigation, the project was subsequently enrolled and the unit owners were able to have the peace of mind that their investment now had warranty protection.

Investigations like these often begin with tips from homeowners, municipal building departments or builders themselves.

In the past, we used a hotline where callers could leave voicemails with tips and, if desired, these tips could be anonymous. Unfortunately, we couldn’t act on some of the leads because there simply wasn’t enough information provided. To initiate an investigation, our team needs details such the address of the home or condo development, stage of construction, name of the vendor or builder involved and so on.

To improve our customer service, Tarion is introducing a new process to help ensure we are able to gather all the details we need to open an investigation. Callers will be able to talk to a trained member of the Compliance & Investigations team via a dedicated number. By asking a few simple questions, our staff can collect the information Tarion needs to begin investigating the concern. Callers who don’t want to provide their names will still be able to remain anonymous.

But illegal building leads aren’t the only reason to give our team a call. Compliance & Investigations also deals with other compliance related issues, such as concerns about builder conduct.

We want consumers to have the peace of mind that their homes are being built by someone they can trust and to know that their investment is protected. If you have a concern about your builder or about possible illegal building activity in your area, I encourage you to call toll-free 1.877.982.7466 x3833. You can also email investigations@tarion.com.

HOWARD BOGACH is president and CEO of Tarion Warranty Corp., a private corporation established to protect the rights of new homebuyers and to regulate new home builders. Tarion.com


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Consumer Protection – Illegal Building – Why It Matters!

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Consumer Protection – Illegal Building – Why It Matters!

Since March is Fraud Prevention Month, you would have heard a lot about how consumers can protect themselves from being victims of fraud.

There are all kinds of fraudulent schemes, but one that may not get as much attention as it should is the illegal building of new homes.

Certainly, it affects consumers and registered builders alike. So, it’s no surprise that when I am out at events speaking with Ontario consumers or new home builders, the subject regularly comes up as a topic of conversation.

What is illegal building? And why is it important that we work to stop it?

First of all, for consumers, it can mean that their new home is being built by someone who does not actually have the financial or technical expertise to build new homes. It can also mean that the home is poorly built and does not meet Ontario’s Building Code specifications. It may even be a hazard to live in.

The buyer or property owner may also encounter unexpected liability issues during the construction of an illegally built home, especially if an on-site accident happens during construction. And the buyer may not be aware of their rights or responsibilities under the statutory new home warranty once the home is completed.

Illegal building also contributes to the underground economy. So, for the majority of good registered builders, the practice can create unfair competition. Since many illegally built homes are eligible for warranty protection under the legislation, registered builders effectively subsidize the warranty on these homes.

Illegal building can also have a negative effect on the reputation of the industry overall.

One challenge we face in combatting illegal building is that not every new home buyer knows that all builders, by law, must be registered with Tarion and that they have an obligation to provide the new home warranty. Consumers who aren’t aware of this can be deceived by stories of the warranty being optional or too expensive.

An illegal builder, meanwhile, may want to avoid the accountability and warranty obligations that come with building a new home. They may also be trying to avoid municipal building code inspections or workplace health and safety legislation.

They are gambling that no one will report them to Tarion. Not the homebuyer, neighbours, municipal building departments, subtrades, suppliers or other registered builders. That is why we work closely with everyone in our industry to raise public awareness about this issue and to create confidence in our new home marketplace.

Tarion’s ability to combat illegal building depends in part on purchasers and others in the community reporting suspicious activity. Here are some red flags that may suggest your builder is operating illegally:

  •  They say they built the home for themselves, but then decided to sell it;
  • They say you don’t need a Tarion warranty because they offer their own;
  • They give you an inflated cost for the Tarion warranty — the maximum cost is $1,500; and,
  • They give you a short contract to sign; or worse, no contract at all.

In short, illegal building affects everyone. It can create liability risks for the purchaser, impact the building industry, including its reputation, and prevent the homeowner from understanding their warranty rights and responsibilities.

That’s why illegal building matters.

HOWARD BOGACH is president and CEO of Tarion Warranty Corp., a private corporation established to protect the rights of new homebuyers and to regulate new home builders.



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