In February 2021, the provincial Home Construction Regulation Authority (HCRA) became responsible for licensing and regulating home builders and sellers in Ontario. This was previously overseen by the Tarion Warranty Corporation (TARION).
The HCRA sets standards for competence and conduct while TARION continues to oversee warranty claims and complaints relating to new construction. HRCA also administers an “Ontario Builder Directory” which has now been updated to include charges filed against a builder (not just convictions).
The HCRA released its first list of charges on August 4, 2021. A Richmond Hill property builder was charged with 10 counts of “illegal vending” for selling properties without an HCRA license or TARION registration – an 11th charge was laid for failing to produce evidence during a search warrant.
A judgment of the Superior Court from mid-July also saw a builder ask the court for an injunction to stop TARION from carrying out a conciliation process where purchasers demanded delayed occupancy compensation. The builder argued that the delay was “unavoidable” because of water supply issues and COVID-19, and therefore compensation was not payable. The purchasers demanded TARION conciliation with the builder as part of the TARION process. If TARION found the delay unjustified, it would compensate purchasers, seek reimbursement from the builder, and put a notation in the builder’s record of a “chargeable conciliation.” The chargeable conciliation would also be noted in the HCRA’s Ontario Builder Directory.
The court denied the builder’s injunction as it was not equitable or just to deprive new homeowners from warranty protection. Claims submitted to TARION are meant to be a quick and inexpensive way for homeowners to seek compensation for late occupancy and the conciliation process was designed to prioritize interests of the consumer over the interest of the builder.
The court found that if an injunction was granted, builders who were concerned about how TARION might rule on a warranty claim would have an incentive to pre-emptively file an application with the court to stop conciliation and potentially avoid an adverse ruling – this frustrates the purpose of the Ontario New Home Warranties Plan Act. There was no public interest advanced by the builder in trying to stop the TARION conciliation and the court found that there was harm to the public interest in doing so.
It is interesting to see the interplay between TARION and HCRA and how they function to protect consumers.