Ontario government planning big changes to Tarion

The Ontario government is preparing to make sweeping changes to the way Tarion (formerly the Ontario New Home Warranty Program) operates.

The agency, created in 1976, currently has multiple roles including both running the province’s mandatory new home warranty program and  regulating homebuilders. Tarion sets many of the rules, adjudicates between home builders and home buyers – and yet is funded entirely by builders. Now, Queen’s Park has decided there are too many conflicts of interest – and it will intervene.

Consumer Services Minister Tracy MacCharles announced that the province will separate Tarion’s administration of the new home warranty program from Tarion’s regulation of the home builders. There will be major changes in many areas of Tarion’s operations. No precise timeline for these changes were given.

MacCharles made her comments in a speech at the Empire Club of Canada, Toronto. The Toronto Star reported that she said, at one point: “Tarion is too far removed from government. We believe that consumers can be better protected by giving government the lead in making rules and setting standards.”

Here is the press release from Queen’s Park…

Strengthening Consumer Protection for Owners of Newly Built Homes

March 28, 2017 1:30 P.M.

Ontario has released the final report from the Honourable John Douglas Cunningham, QC, on the Ontario New Home Warranties Plan Act and the Tarion Warranty Corporation, and will move forward with the recommendations to further protect owners of newly built homes across the province. Minister of Government and Consumer Services Tracy MacCharles made the announcement today at the Empire Club of Canada in Toronto. To improve consumer protection, accountability, transparency and board governance, Ontario will:

• Make the dispute resolution process easier for homeowners if they discover a problem in the construction of their new home — for example, a homeowner does not have to prove the cause of a defect
• Separate the provider of the new home warranty program from the new home builders regulator to increase consumer confidence
• Give government responsibility in making rules and setting standards and introducing modern oversight measures to improve accountability and transparency
• Immediately ask Tarion to introduce new deposit protection measures to better reflect today’s home prices and deposit requirements

The actions announced today will not increase the price that Ontarians pay for a new home.

Strengthening consumer protection is part of our plan to create jobs, grow the economy, and help people in their everyday lives.

Quote

” Our government is committed to protecting what is for most people the largest investment they will make in their lifetime — the purchase of a newly built home. Our plan strengthens consumer protection and the consumer experience so people in Ontario can make this purchase with confidence. We know that the affordability of housing is something that is top of mind for people across the province, which is why our government is reviewing all options to make it more affordable. We will be sharing more information on our plan in the weeks to come. Making it easier and more affordable for the people of Ontario to purchase a newly built home is part of our larger plan to be a leader in consumer protection. ”

– Tracy MacCharles, Minister of Government and Consumer Services

Quick Facts

• The Honourable John Douglas Cunningham completed a comprehensive review of the Ontario New Home Warranties Plan Act and the Tarion Warranty Corporation to identify opportunities to improve consumer protection measures, meeting with over 200 individuals — homeowners and industry professionals — from across Ontario.
• The Tarion Warranty Corporation or Tarion oversees the warranty program for newly built homes in Ontario as well as regulating new homebuilders in the province.
• New homes built for resale or under contract with an owner must be enrolled in the home warranty program and builders and vendors must be registered with Tarion.
• In 2015, more than 57,000 new homes were enrolled in the warranty program — 40 per cent of which were condominium units.