Tarion has made regulatory changes related to the Rebuilding Consumer Confidence Act, 2020, based on feedback received during consultation in the fall of 2020 and has created new standard vendor and builder agreements.
Previously, Tarion granted registration to vendors and builders that allowed them to sell and build new homes. Registrations are granted subject to certain terms and conditions which are found in regulations (e.g. Regulation 894), set out in a term and condition letter, or are included in a contract between the vendor and builder and Tarion which is required to be signed as part of registration (and some terms and conditions are repeated across all of those formats).
In the new regulatory framework many of the requirements that vendors and builders must meet to sell, to offer to sell, to build or offer or agree to build homes rather than being set out in regulations are anticipated to be included in the vendor or builder agreement. As a result, new standard vendor and builder agreements have been developed.
The Vendor Agreement sets out the obligations of the Vendor – the person who will be entering into sales of homes (land and dwelling) or agreeing to build a home on a person’s land under a construction contract. The Vendor is primarily liable for performance of the deemed statutory warranties provided by the vendor to homebuyers under the New Home Warranties Plan Act.
The Builder Agreement sets out the obligations of the Builder – the person who will be building homes under a contract either with a licensed vendor or with a consumer landowner wanting to have a contract home built on their land.
Vendor and Builder Agreement
The Vendor and Builder Agreement sets out in one document the obligations of the Vendor and of the Builder. This can be used where the person signing the document is either: i) a vendor who proposes to offer to sell, agree to sell or sell one or more new homes and is also the person who proposes to build such homes; or ii) a contract home builder who proposes to enter into a construction contract with an owner to build a new home (and as such is also a vendor).