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Review of Builder Bulletin 28 – Tarion Requirements for Receipt and Release of Security

Thank you for sharing your invaluable feedback during the review of Builder Bulletin 28 (BB28): Tarion Requirements for Receipt and Release of Security. Your input is crucial to raising the level of consumer protection for buyers and owners of new homes in Ontario.

Tarion is in the process of analyzing and reviewing all feedback as part of our policy development. We will continue to keep homeowners and builders informed of any changes to this initiative.

Background

From 2016 to 2019, Tarion conducted a review of BB28 which included seeking public input to improve our policies to ensure they are more current, better targeted to risks, and easier to use and understand.

Key changes between the proposed models and the current BB28 policy included the following: 

  1. The policy has been separated out by product type, with a standalone policy for each of freehold, condo C/D, and low-rise products. This makes the documents easier to use and easier to change in the future. Future consideration could be given to further refining the policies to include separate consideration of contract/custom homes or of condo types C & D. 
  2. The policy has been framed expressly as a guideline as opposed to a set of prescriptive rules. This recognizes the reality that security adjustments may have to be customized in any given situation. 
  3. The risk assessment model has been entirely revised. The new model uses a matrix approach based on tenure (for freehold) or completed projects (for condo type C&D), and risk factors. The model has been reframed to use tenure or completed projects as the primary driver, with size, credit, claims history and equity as secondary factors. 

To view the proposed models, please see the links below:
•    BB28F: Proposed Freehold Model
•    BB28H: Proposed High Rise Model
•    BB28L: Proposed Low Rise Model

  

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