Illegal Home Building Puts Buyers at Risk

By Howard Bogach, CEO, Tarion Warranty Corporation

Originally published in the Toronto Sun on March 3, 2018.

Update (October 9, 2018): This page's content has been updated to include Tarion's new process for receiving compliance concerns.

If you’re entering into a contract, you want to know the person or company you’re dealing with is trustworthy and is going to fulfill their commitment. This applies to any business transaction but is especially important when the contract is for a new home – one of the biggest investments you’ll make in your life. 

Since March is Fraud Prevention Month, I thought it would be good time to talk about illegal building and how Tarion is taking action to protect consumers. 

So what is illegal building exactly? Almost all new home builders must be registered with Tarion and enrol the homes they build in the new home warranty program. If the builder fails to register or does not enrol the home, it means that they’re building illegally. 

Illegal building can put home buyers at risk because it could mean that their new home is being built by someone who does not have the financial or technical ability to complete the project. It could also mean that the home is poorly built and does not meet the province’s Building Code specifications.  It might even be a hazard to live in. 

But beyond the home itself, an illegal builder may not comply with workplace safety regulations and it could lead to unexpected liability issues for the buyer, especially if an on-site accident happens during construction. And finally, once the home is complete, a buyer may not understand their rights or responsibilities under the new home warranty. 

Tarion has been working with municipalities and organizations like the Ontario Home Builders’ Association and the Ontario Building Officials’ Association to raise awareness of illegal building and to implement measures to help prevent it. 

Prevention is just part of the solution, however. Effective January 1, 2018, fines have at least doubled under the Ontario New Home Warranties Plan Act. 

This means a corporation building illegally can now be fined up to $250,000, up from the previous $100,000 fine, while the maximum fine for an individual (which can include directors or officers of a corporation) has doubled to $50,000 and/or imprisonment of up to two years less a day. 

If we’re alerted to a possible illegal builder, we can investigate. So during Fraud Prevention Month – and any other time throughout the year – we ask everyone to help us identify illegal builders who can create financial havoc for homeowners and give registered builders a bad name.

If you suspect illegal building may be taking place, or have concerns related to builder conduct, please call Tarion's Compliance and Investigations team, toll-free, at 1-877-982-7466 ext. 3833. This number may also be used for inquiries regarding whether a specific home is enrolled and/or eligible for warranty coverage.

And if you’re in the market for a new home, I urge you to look up your potential builder in the Ontario Builder Directory on Tarion.com. 

If you don’t see your builder in the directory, give us a call. 

    

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