Like any new home warranty program, Tarion is constantly exposed to the risk of unforeseen catastrophic events. If such an event were to happen, Tarion would not be able to easily raise money to address claims as other corporations might by issuing debt, stocks, or quickly increasing fees. That is why Tarion obtained further protection through excess loss insurance, which would act as a just in case emergency fund for Tarion to continue to provide warranty protection and pay out claims. Reinsurance is a commonly used risk management tool in the insurance industry, and the added protection will only mean good news for consumers in the event of a catastrophic claim loss.
Tarion is a private, not-for-profit corporation that is funded entirely by registration, renewal, and enrolment fees paid by builders. Tarion does not receive any public funding through tax dollars.
Tarion pays out warranty claims based on their validity in accordance with the Ontario New Home Warranties Plan Act. The stable trend of claims paid each year reflects the effectiveness of Tarion’s underwriting process and the tendency on the part of builders to resolve issues before they result in warranty claims. The purpose of Tarion’s Guarantee Fund (as explained in "Why does Tarion have such a large Guarantee Fund?") is not just to cover annual warranty claims – it also supports the financial stability of the corporation and deposits from builders that are held as security to manage the risk of financial loss.
Tarion’s Guarantee Fund must be maintained at a level at which it can support current and future warranty claims, the financial stability of the corporation, and deposits from builders that are held as security. See below for a breakdown of what the Guarantee Fund supports and more information about each one of its components:
1. Current and future warranty claims ($239M)
Every new home and condominium unit enrolled in the warranty program is covered to a maximum of $300,000 in addition to deposit protections. At any given time, there are close to 400,000 homes under warranty, and over 100,000 that are yet to be completed but eligible for deposit protection. Since warranty coverage lasts for up to seven years, a significant period of time may elapse between the time a home is enrolled and a claim is paid. As a result, Tarion must ensure that it has enough money to cover future warranty claims. Every year, an independent actuary reviews the value of the warranty liabilities fund with this in mind. A healthy Guarantee Fund gives consumers the confidence that the warranty program is fully protected.
2. Financial stability of the corporation ($252M)
Acting in the best interests of consumers, Tarion adopts capital risk management framework and guidelines used by the property and casualty insurance industry in Canada. This helps to ensure that Tarion is able to improve its overall service, protect consumers when builders fail to meet their warranty obligations, and cover potential losses due to unforeseen catastrophic events.
3. Deposits from builders that are held as security ($55M)
To minimize the risk of financial loss from future warranty claims, Tarion receives security from builders in the form of cash, letters of credit, and other guarantees. Tarion holds onto these funds for a period of time, and uses them only if there are valid claims that a builder did not resolve. Tarion returns unused security to builders in accordance with its security release guidelines.
All of Tarion’s Board of Directors serve on the Board to promote Tarion’s mandate of consumer protection and builder industry regulation. Tarion Board members do not serve on behalf of a specific constituency; rather, they are tasked with bringing their experience to bear in support of the entire public mandate of the organization. Tarion’s director selection process considers candidates on merit and is based upon the balance of skills, background, experience and knowledge that can serve Tarion’s mandate. Tarion’s directors have a wide range of skills and experience in both the private and public sectors. For example, one director is CEO of a community foundation, one is a former city mayor, another is a lawyer and another is a consumer advocate in the energy sector. Others are executives with deep experience in banking, the investment industry and marketing. A number also have deep experience in the building industry sector. More information concerning the Tarion Board of Directors, and the governance committee structure can be found here.
Tarion’s social media platforms are intended principally to provide additional ways to reach the home-buying public. These platforms are generally open; however, Tarion retains the discretion to block access where content is considered offensive to an individual or an organization, rude in tone, or otherwise abusive. Tarion’s social media content policy can be found here.
Nail pops are covered in situations where they are excessive and appear to be a result of a defect in the drywall installation. As a general rule, the warranty does not cover nail pops if they result from normal shrinkage of building materials. Please refer to Section 9.6 of the Construction Performance Guidelines for more information. You can also watch our video, entitled "Nail Pops and Your New Home Warranty."
Effective January 1, 2015, the Ontario Building Code will be changed to allow wood frame buildings to be built up to six storeys high (an increase from four storeys).
Wood structures are held to the highest of safety standards and have been proven to be as safe as those made from concrete or steel. With safety in mind, the province is also introducing new requirements for wood frame buildings that include building stairwells with non-combustible materials and roofs that are combustion resistant.
Additionally, to ensure the safety and integrity of these homes, Tarion has made changes to Builder Bulletin 19, which provides guidance and direction with respect to Field and Design Review Reporting for condominium projects.
Our claims experience tells us that when correctly sized systems are installed properly, high velocity HVAC systems function very well. High velocity HVAC systems make up just a very small portion of overall heating related distribution claims, so from our claims experience, we do not see an inherent problem with these systems. The handful of cases that have come to Tarion are typically the result of installation issues, and less frequently, undersized units. In most of these cases, as with most new home defects, these issues are rectified by the builder.
Under the Ontario New Home Warranties Plan Act, the Licence Appeal Tribunal (LAT) is the prescribed avenue of appeal for homeowners who wish to challenge Tarion's warranty assessments. It is important to understand that LAT is an independent body, and that Tarion has no statutory authority to make changes to it.
Tarion endeavours, as much as possible, to find solutions to homeowner issues long before they reach LAT and may act as a facilitator to resolve claims. The majority of homeowner issues are resolved by the builder directly through Tarion's facilitation efforts.
At the 2014 Annual Public Meeting, Tarion's Chair responded to concerns raised by attendees by promising to discuss Tarion's use of LAT with the Board of Directors. Through Board discussions, Tarion has committed to opening a dialogue with LAT, to discuss the issues raised by our stakeholders.
Why doesn't Tarion create an arbitration forum for homeowners like the Builder Arbitration Forum for builders?
The Builder Arbitration Forum was created because builders did not have a way to challenge Tarion’s assessments. New home buyers, on the other hand, have always had the ability to challenge Tarion’s decisions through the Licence Appeal Tribunal, an independent, quasi-judicial, informal tribunal established by the provincial government.
The Licence Appeal Tribunal is the recognized avenue of appeal for homeowners, and provides many benefits: it is relatively inexpensive; the timeframes are short compared to court or even arbitration; it provides mediation services during the pre-hearing phase that often lead to early resolution; and it offers considerable assistance to homeowners who wish to present their own case.
An arbitration forum for homeowners along the lines of the Builder Arbitration Forum would not provide any further benefits. Rather, we believe that it would add confusion to the appeal process, add an additional layer of cost for homeowners, and lengthen the time for resolving warranty claims.
We believe the best way to serve our diverse groups of stakeholders is to connect with them and gather information about their thoughts and experiences with Tarion. To do so, we conduct regular surveys with homeowners, builders and Tarion employees. Each fall, we send surveys to all homeowners who took possession of their home in the previous year, asking them about their experiences with Tarion and their builder. That feedback is essential to helping us improve our customer service practices and helping builders with theirs. Every second year, we survey builders to learn about their experiences with Tarion and ways we can help them offer better service to their homeowners.
We also conduct a reputation appraisal that helps us gauge how we are interacting with and perceived by other industry and government stakeholders. These stakeholders include trade associations, civil servants, media, and industry professionals like home inspectors and real estate professionals. By soliciting feedback from as many of our stakeholders as possible, we feel we are in a better position to determine changes that can be made to our policies and processes in order for us to provide the best possible service. It also enables us to focus our education and outreach initiatives in a direction that will ultimately result in better educated consumers and a better home ownership experience.
Each year after Tarion’s Annual Public Meeting, a summary of the presentations and question and answer sessions is posted on Tarion.com. All Annual Public Meeting summaries are archived on the Annual Public Meeting page on Tarion.com. Questions will not be added or amended after they are posted online.
While every effort is made to create a meaningful summary of the points made by participants and Tarion’s responses, the summary is not intended to be a verbatim transcript of the meeting. Often, due to the nature of questions asked, there are a number of personal details or emotions that don’t directly impact the material details of the question or Tarion’s answer. Our goal is to capture the essence of the questions asked and portray them as correctly as possible.
We used to publish our Annual Report at the same time as our Annual Public Meeting. In response to feedback we received from stakeholders who wanted the opportunity to review the report before the meeting, we re-scheduled our 2015 Annual Public Meeting to a later date. In future years, we will continue to release our Annual Report well in advance of our Annual Public Meeting.
Yes. Tarion has an express policy which is acknowledged annually and prohibits accepting any form of benefit (including gifts) to the extent it could reasonably be construed as giving rise to a conflict of interest.
Tarion is not funded by tax dollars. The Sunshine List includes public servants and not private sector employees.
In accordance with good governance principles, Tarion's Board of Directors and a dedicated committee of the Board annually reviews the salaries of senior executives. The Board retains outside consultants to review comparable organizations and provide advice on salary levels. Salary information for the company (including benefits) is set out in Tarion's published financial statements all in accordance with applicable accounting standards and requirements.
LAT is too adversarial a process. Why do homeowners have to hire lawyers etc. to dispute a Tarion decision?
LAT - or the Ontario Licence Appeal Tribunal - is an independent body created by the Ontario government to provide homeowners with an impartial appeals process.
Tarion doesn't control LAT or set the rules for it.
We work hard to find solutions to homeowner issues long before they reach LAT and may act as a facilitator to resolve claims. Most homeowner issues are resolved by the builder directly or through our facilitation efforts.
If all sides can't come to a resolution then LAT has a mandatory pre-hearing process that includes efforts at mediation by an independent chairperson.
If there's no resolution in one or more pre-hearings then the matter is heard as a fresh hearing by a different chairperson.
For us, a successful outcome is when we resolve issues before they get to LAT. On average there are about 50,000 new home possessions each year in Ontario. Over the same period the average number of cases that went to a LAT hearing is about 20 per year.
Tarion is not at this time contemplating adding the position of Compliance Officer although we could consider doing so.
Tarion has an Office of the Ombudsperson, which is an independent, impartial, and confidential department that promotes and protects fairness within Tarion.
The Office receives, seeks to resolve and investigates complaints to ensure that Tarion is fair in its operation. The Ombudsperson provides information and advice and makes referrals where appropriate. This role reports to Tarion's Board of Directors.
Tarion publishes a great deal of information that we hope will be useful for consumers. It's important that whatever information we provide is clear, easy to understand, and fair to the individuals or businesses being described. We always recommend that prospective home buyers check our website as one of a number of sources in making their home buying decisions.
Consumers can learn whether or not a builder is registered; that is, a legal builder. They can find out if a builder has had his licence refused or revoked, or a Notice of Proposal has been issued to revoke their licence. The directory also displays whether a builder has one or more chargeable conciliations against his/her name and the total dollars paid out in claims. If it's an umbrella corporation, consumers can learn other names under which the builder may be operating and the communities in which he/she builds. We can always do better, though, and we're looking at ways of sharing other information with consumers that will help them make informed decisions.
There may be cases where a claim has been paid, but it is not reflected on the Ontario Builder Directory. These exceptions are outlined on the directory and in Builder Bulletin 20. If a claim has been paid and is not reflected in the directory, it would be due to one of the exceptions.
Tarion continues to add more details to this site every year which we feel would be of benefit to Ontario’s new home buyers. However, its primary purpose is to identify those builders who are registered to build in Ontario. Home buyers are encouraged to check the directory to ensure they are working with a registered builder who is providing the statutory warranty.
As the registrar of new home builders in Ontario we expect builders to have the technical skills to ensure the homes they build meet or exceed the Ontario Building Code. We expect builders to have the financial strength to post securities to guarantee their work and expect them to behave with honesty and integrity.
A homeowner can, at any time, ask Tarion to conduct an investigation into their builder's performance by making a request through a Tarion representative. The investigation is conducted by our Deputy Registrar. The results of that investigation may, for example, lead to:
- The builder is limited in the number of homes he/she can construct;
- The security they are required to provide Tarion is increased or held for a longer period of time;
- A Tarion-approved customer service plan is put into place and audited by Tarion for compliance; and/or
- The builder's licence is revoked.
We are currently reviewing our reporting and investigation process to see if we can make improvements.
Why are so many condo buyers being forced to move into buildings that are years away from being finished?
This issue concerns us, too, since we hear from many condo buyers that they feel as if they're living in a construction zone. Condominiums typically take a long time, sometimes years, to complete. Often a condo will have many hundreds of units available and since construction starts at the ground floor, the units on lower floors are ready before the units on higher floors. This can lead to the homeowners moving in many months before the condominium common elements and upper units are complete.
Municipal building officials determine whether a particular floor of units is fit for occupancy. It's up to those municipal officials to decide whether homeowners can start moving in, which can happen long before the building "feels finished."
We have about 370,000 homes under warranty, with 40,000 to 50,000 new home possessions each year. Most of the time, builders deal directly with any problems and the homeowners are happy.
We get involved in the other cases, where the homeowner can be very angry and frustrated and sometimes, where relations have broken down with the builder. This is where we help the two sides find their way to a solution or Tarion addresses the matter on its own.
Even though we received an 85% customer satisfaction rating last year, we know some people are going to be unhappy with the outcome of their particular case.
We're continuing to work on better ways to address those situations.
The new home warranty is supplied by the builder; Tarion backstops that warranty. If an issue arises, the builder needs to have an opportunity to resolve that issue. There are 40,000 to 50,000 new homes built in Ontario each year. The vast majority of any problems that arise are fixed by the builders long before they get to us. When a claim is made, our customer service department starts by working with both the homeowners and builders to try to have issues resolved as quickly and effectively as possible. Tarion will only step in, hiring a contractor to make repairs, under extreme circumstances; such as a builder being unwilling or unable to act.
Why are you providing warranty protection to the Pan Am Game residences being built in Toronto? Won't the athletes be "previous occupants"?
The residential condos being built in connection with the Pan Am Games will have warranty coverage. Some of the buildings will be used temporarily by the athletes before they are finalized for the ultimate purchasers. Coverage for the residential condominiums is good news for consumers:
- Vendors will provide the statutory warranties that are also backstopped by Tarion. That benefits both home buyers and the condominium corporation.
- The buildings will be subject to Tarion's requirements for high rise residential construction which includes periodic inspections by third party experts during construction.
Providing warranty coverage to the Pan Am residences is consistent with Tarion's governing legislation. The Pan Am residences are not conversion projects. Before the dwellings are completed for the ultimate purchaser, they will be used temporarily so the athletes have a place to sleep. Then the units will be completed to the specifications of the purchaser/home buyer. Tarion considered the issues and concluded that this cannot be considered "previous occupation." As a result, the units will have statutory warranty coverage.
Tarion is only one of the players that regulate Ontario's new home building industry. Some of the other organizations include (but are not limited to) the Provincial Government, the municipalities, the Canadian Standards Association and the Electrical Safety Authority. Each organization takes on a different role when it comes to regulating the new home industry. For example, Tarion's responsibilities include licensing new home builders and backstopping the warranty. It is the role of the municipalities, through their building departments, to appoint building inspectors who inspect new home construction and determine compliance with the Ontario Building Code.
There are just a few situations in which a new home would not be eligible for warranty coverage, for example, when someone builds a house that he or she plans to personally live in. This can also happen when an individual hires someone to build a house, but the individual still exerts significant control over the process. That control might include selecting, signing contracts with or directly paying trades or suppliers. In the case of contract homes, buyers should be extremely cautious about signing agreements with suppliers and subcontractors to ensure they do not inadvertently sign away their right to warranty protection.
Tarion has broadened our educational outreach to include industry participants that have direct involvement with new homeowners.
In 2011 we worked with a leading home inspection organization, on behalf of the Ontario Association of Home Inspectors, to design the New Construction Inspection Training Program. This program educates home inspectors on the Pre-Delivery Inspection (PDI) process for new homes and goes through the most common 30-day list items. The Construction Performance Guidelines is used as the primary guide for this course. After completion, home inspectors will have increased knowledge to properly assess the condition of a newly constructed home.
Tarion also works with real estate agents as they play an important role in educating new home buyers. Tarion created a course for Ontario real estate agents that can be credited towards their ongoing professional development requirements. This course educates real estate agents on illegal building and the rights of new home buyers with respect to their new home warranty. Led by the Enforcement Department, this course is continuously updated to reflect new trends in our claims activities, as well as ongoing policy developments at Tarion.
Field Staff are those members of the Warranty Services team whose responsibilities include conducting conciliations and claim inspections that arise from consumer warranty claims.
All Field Staff have a minimum of five years of experience with Tarion, or related construction or customer service experience. All Field Staff are expected to have relevant knowledge of the Ontario Building Code, as well as the Tarion Construction Performance Guidelines. Field Staff are encouraged to seek additional internal or external expertise when assessing complex matters or matter outside their knowledge.
In general, Field Staff are expected to:
- have an understanding of, and be able to apply the statutory warranties;
- have an understanding of the Construction Performance Guidelines and be able to apply the document as well as the testing methodologies outlined within it;
- have an understanding of general construction principles and knowledge of the applicable elements of the Ontario Building Code;
- draw upon third party expertise where necessary to assess or diagnose complex issues;
- have a basic understanding of scoping and estimating principles in order to price repairs, as well as be able to draw upon specialized internal estimating expertise where required; and
- conduct themselves professionally in accordance with Tarion customer service principles.
Our Field Staff come from a variety of backgrounds including municipal building inspection, construction, insurance adjusting and general customer service.
In addition to the skills they bring to Tarion from their various backgrounds, all Field Staff are trained internally with respect to the Ontario New Home Warranties Plan Act, the Construction Performance Guidelines, the conduct of a conciliation, as well as customer service training.
Since 2011, Warranty Services has also adopted knowledge of the OBC House Part 9 as a core competency for Field Staff in order to raise the minimum common level of construction related knowledge.
It is important to remember that Field Staff are not expected to be experts in all matters that may arise in the course of managing a warranty claim. It is expected that in the course of the any given claim file Field Staff may be required to seek the assistance of internal or external expertise. For example, Field Staff are encouraged to consult with an internal OBC staff expert who is available to assist with complex building code or building science issues; or may retain engineers to assist with defect diagnosis and development of repair methodologies for complex structural issues.
It is illegal for a builder to enter into an Agreement of Purchase and Sale or construction contract with a purchaser if the builder is not registered with Tarion. It is also illegal to begin construction of a home or condominium without first enrolling it with Tarion. Offenders will be charged by Tarion under the Ontario New Home Warranties Plan Act.
Illegal building affects everyone in the new home industry. Consumers may not find out about the warranty coverage they are entitled to, illegal builders may use sub-standard trades, and homes may not even meet Ontario Building Code standards.
Tarion’s enforcement department is dedicated to investigating and prosecuting illegal building activities in Ontario. In 2012 the work of Tarion’s enforcement team led to 69 convictions for illegal building. We continue to make strides in the prevention and detection of illegal building.
On January 1, 2011, it became mandatory for municipalities to share building permit information with Tarion’s Enforcement Department. This makes it easier for Tarion to identify illegal building activities at the outset of a project.
The Enforcement Department has also recently implemented new intelligence analysis software to help increase the accuracy and speed of detecting illegal building activities. Along with an intelligence analyst, the software improves the speed and accuracy of detecting illegal building activities by identifying high-risk builders and builders who have had their licences revoked by Tarion.
We are reaching out to the real estate industry to educate them about illegal building. We’ve developed a course that can be credited toward their continuing education requirements that educates real estate agents about illegal building and also about homeowners rights with respect to warranty coverage.
We host media roundtables and information sessions to talk about the warranty, homeowner protection and illegal building. We also issue press releases when someone is convicted of illegal building. Not only does it alert consumers to what is happening in their communities, but it also increases awareness of the issue, which often leads to an increase in tips related to illegal building activities.
We’re sharing information with other levels of government and agencies with an interest in underground activities. If a builder is not licensed with Tarion, they may also be engaging in other activities associated with the underground economy, such as hiring untrained or unskilled workers, evading taxes and not adhering to health and safety regulations.
If you have any information about illegal building activities in the province, please call Tarion's anonymous tip-line at 1-800-786-6497. All information received is kept confidential. Tarion does not subscribe to call display.
A "chargeable conciliation" is a conciliation in which Tarion determines that: (i) one or more items reported by the homeowner are warranted under the Ontario New Home Warranties Plan Act and the builder failed to repair or resolve the item(s) during the applicable repair periods, and (ii) no exception to chargeability as outlined in Builder Bulletin 20 applies.
Note: There are circumstances where an item may have been found to be warranted, but the conciliation is not chargeable to the builder. Examples include where the builder is denied access to the home or the homeowner refuses a repair or settlement offer that Tarion considers to be reasonable.
If you and your builder cannot agree on whether a claim item listed on your statutory warranty form is covered by the statutory warranty, you may request a conciliation by Tarion during the applicable conciliation request period.
A conciliation is a process in which Tarion assesses: (i) whether a disputed item is warranted, (i.e. covered by a statutory warranty); and/or (ii) whether Tarion agrees with the way a repair was done or was offered to be done by the builder; and/or (iii) whether Tarion agrees that a settlement offer by the builder is reasonable in the circumstances.
A conciliation may include an inspection at your home (if items that require repair are involved) or a desk assessment (if items can be assessed based on a paper record) and may also include a review of the purchase agreement, the completed Pre-Delivery Inspection Form and other relevant documents.
If you do not request a conciliation within the applicable conciliation request period, all items listed on your statutory warranty form will be deemed to be withdrawn and Tarion will not be able to assist you with them.
Every builder is required by law to provide limited warranty coverage to new home buyers. It is important that purchasers take the time to understand the details of their warranty and how to use it.
Tarion is responsible for ensuring that builders repair or resolve items that are covered by the statutory warranty based on a minimum customer service standard. We can help resolve disputes about what is and is not covered, but homeowners must follow a statutory warranty process to request our involvement.
Your new house should have been enrolled by your builder when construction began. New homeowners are given information about their warranty when they take possession of their home. Homeowners can manage their warranty online through MyHome.
If you have not yet registered your new home with Tarion, please call us at 1-877-982-7466.
When a homeowner signs a purchase agreement for a new home or condominium and pays a deposit to the builder, Tarion protects that deposit in the event that the sale is not completed due to any of the following:
- the builder goes bankrupt;
- the builder fundamentally breaches the purchase agreement; or
- the purchaser is otherwise legally entitled to rescind the agreement before closing.
Deposits paid for condominium units are protected up to a maximum of $20,000 with any excess deposit amounts being protected by the trust provisions of the Condominium Act.
Deposits paid for all other new homes are protected up to a maximum of $40,000, if the purchase agreement was signed on or after February 1, 2003.
Payments made for upgrades and extras may not be protected by Tarion. For example, many purchase agreements expressly state that payments for upgrades and extras will not be refunded under any circumstance. In addition, Tarion does not protect any payments made to reserve or hold a home or a condominium unit before the purchase agreement is signed. You can find more information here.
Builders in Ontario are deemed to provide statutory warranty coverage as outlined in the Ontario New Home Warranties Plan Act.
The coverage inclues:
- Protection for deposits;
- Protection against financial loss for contract homes;
- Compensation for delays in closing or occupancy; and
- One, Two, and Seven Year warranties for certain construction deficiencies.
New home owners benefit from One Year Warranty Protection and Two Year Warranty Protection against defects in work and materials, and Seven Year Warranty Protection against major structural defects (MSD).
Warranty coverage begins on the date of possession of a home or condominium unit, and remains in effect until the end of the warranty period, even if the home is sold before the warranty expires.
For condominiums, warranty coverage also includes the shared areas of the building, referred to as the common elements.
Coverage for common elements begins on the day the condominium corporation is registered. However, there is no warranty coverage for common elements condominiums or the common elements of vacant land condominiums.
You can find more information here.
Tarion is the Regulator of the home building industry. As such, Tarion is responsible for licensing all new home builders in the province and ensuring they have the technical competence, customer service capabilities and financial capacity required to build new homes. We also look at how past conduct reflects on the builder’s honesty and integrity. Builder licensing occurs annually and it involves the establishment of individual terms and conditions of registration in accordance with the Ontario New Home Warranties Plan Act.
If a builder is unwilling or unable to honour his/her warranty obligations, a number of penalties may result. The terms and conditions of their registration may be changed such that:
- The builder is limited in the number of homes he/she can construct;
- The security they are required to provide Tarion is increased or held for a longer period of time;
- A Tarion-approved customer service plan is put into place and audited by Tarion for compliance; and/or
- The builder’s licence is revoked.
Tarion is governed by a Board of Directors. The Board has 16 members and includes:
- 8 members selected by a Nominations Committee from a list of candidates provided by the Ontario Home Builders' Associations;
- 8 non-builders, of which 5 are appointed by the Minister of Consumer and Government Services and 3 are selected by the Nominations Committee from candidates sought out from the general public by a search firm. These candidates are from a wide variety of backgrounds and disciplines and typically have knowledge and experience in consumer matters, finance and government.
Tarion, like any corporation, benefits from directors who have knowledge and experience relating to key stakeholder interests, inlcuding new home buyers, the housing industry, the financial community, and government. Directors by law have a fiduciary duty to the corporation they represent, and must act in the best interests of Tarion as a whole and not in their own personal interest or in the interests of one particular stakeholder group to the preference of others.
All appointees and nominees are assessed based on a competency framework/skills matrix, which ensures that the Board has appropriate levels of consumer representation, knowledge of the new home building industry, financial literacy and other skill requirements identified by the Board. Tarion's Board strives to represent all stakeholder interests and conducts its duties in a fair, effective, and responsible manner. Board resolutions are for the most part made by simple majority. However, in accordance with good governance, the Board strives for broad consensus in its decisions. In the extremely unlikely event of a tie vote, good governance principles, and Tarion's by-law so states, the motion would be deemed not carried.
More information about the structure and policies of Tarion's Board of Directors can be found here.
Tarion is an independent non-profit corporation, not a government organization. The Ontario government, through the Ministry of Consumer Services, has empowered Tarion to regulate Ontario’s residential building industry by administering and enforcing the Ontario New Home Warranties Plan Act.
Tarion is financed entirely by builder registrations, renewals and home enrolment fees. It doesn’t receive any government funding. All fees received are paid into the Guarantee Fund, and are then used to pay out warranty claims and to fund the administration of the program.
Builders and/or vendors pay the warranty enrolment fee to Tarion before construction. Some builders and vendors will include the warranty enrolment fee in the purchase price of the home, while others show it as a separate item on the Statement of Adjustments.
The warranty enrolment fee is based on a scale relating to the sale price of the home or condominium unit. Refer to the warranty enrolment fee table to find out the warranty enrolment fee on a home or condominium unit.
Over 2011 and 2012 Warranty Services has reviewed on average about 16,000 deficiency items per year. The vast majority of warranty service requests are resolved directly between the homeowners and the builder.
Click here for answers to the questions we received from homeowners in advance of the 2015 Tarion Annual Public Meeting. We have endeavoured to answer questions that were based on general policies and/or processes. Homeowners that sent in questions specific to their own homes have already been contacted directly.
New home buyers in Ontario are entitled to limited warranty coverage of up to $300,000 over a seven year term which is provided by the builder and backed by Tarion. There is also separate coverage of up to $2.5 million for the common elements of a condominium (such as a lobby or garage).
Tarion’s role is to backstop the warranty provided by new home builders. If something goes wrong that can’t or won’t be resolved by the builder we step in to either help the two sides find a solution or, in some cases, to fix the problem ourselves.
Builders must enrol every new home with Tarion at a cost that is based on the selling price of the home. The warranty remains with the home for seven years, even if it is sold during this period. While the vast majority of builders are able to resolve any deficiencies or other issues that arise to the satisfaction of new home buyers, Tarion stands behind newly constructed homes and is there to help if a dispute about coverage does arise.
We do this by administering the new home warranty and ensuring that builders observe specific customer service standards. We also provide a process for making claims that involves working with the purchaser, the builder and other parties such as the local municipality if needed. In situations where a builder is unwilling or unable to address an issue that falls under the statutory warranty coverage, we will work directly with the homeowner to resolve the matter.
If a builder or homeowner disagrees with one of our decisions, they may appeal through various channels. Purchasers may appeal our decisions through the province’s Licence Appeal Tribunal, or if they feel that they have been treated unfairly by us, they may contact the Tarion New Home Buyer Ombudsperson. Builders who disagree with a Tarion warranty decision may appeal it through our Builder Arbitration Forum.
For nearly 40 years, Tarion has provided new home warranty protection to more than 2 million Ontario homes. We serve new home buyers and new home owners by ensuring that one of their life’s biggest investments is protected. Almost every new home in the province is covered by a new home warranty. This warranty protection is provided by Ontario’s builders and lasts up to seven years. It is backstopped by Tarion. More than 365,000 homes are currently enrolled in the warranty program. Every year about 50,000 new homes are enrolled.
Tarion serves Ontario’s public interest by enhancing fairness and building confidence in the new home buying experience.
With more than 220 employees, Tarion works hard every day to serve the public interest by, first and foremost, protecting consumers and their new home purchases. We investigate homeowner warranty claims; resolve warranty disputes between homeowners and builders; provide deposit and delayed closing protection for new home buyers; and prosecute illegal builders. We regulate new home builders and ensure they meet a province-wide standard of technical competence and financial capacity. We also manage the Guarantee Fund, an important financial reserve designed to help shield Ontario consumers from possible catastrophic building events. All of this enhances fairness and confidence in Ontario’s new home building industry.
How We Serve the Public Interest:
Tasked with administering the Ontario New Home Warranties Plan Act (ONHWP Act), Tarion has a mandate to:
- First and foremost, protect consumers when builders fail to fulfill their warranty obligations;
- Educate new home buyers and new home owners about their warranty rights and responsibilities;
- Fairly and impartially resolve disputes between homeowners and builders over warranty coverage;
- Be an effective steward of the Guarantee Fund and build confidence in the sustainability of the warranty program;
- Ensure new home builders and vendors abide by the ONHWP Act;
- License new home builders and vendors;
- Investigate and prosecute illegal building practices; and
- Set standards and raise accountability in education, construction performance and customer service.
Our mandate to serve the public interest guides us every day.
Occasionally new home owners face incidental costs as a result of authorized repairs to one or more warranted items in their new home or condominium.
For example, a homeowner may need to hire a professional to move a piano or dishwasher so that warranted repairs to the floor can be completed. In such cases, Tarion may consider providing additional compensation for the incidental costs associated with moving and/or replacing items during the course of a warranted repair being done by or on behalf of Tarion.
Ontario's new home warranty does not require payment of incidental costs. This Allowance is a customer service gesture by Tarion. It helps contribute towards a homeowner's expenses, but is not meant to provide full compensation for any and all incidental costs incurred.
WHICH INCIDENTAL COSTS WILL TARION CONSIDER?
Tarion will consider paying incidental costs that meet all of the following conditions:
- The cost is necessary and is a direct result of remedial warranty work done by or on behalf of Tarion
- The homeowner has provided true copies of receipts or quotes; and
- The cost cannot be recovered from another source, such as home insurance.
WHAT IS THE MAXIMUM AMOUNT TARION WILL PAY?
The maximum aggregate amount that Tarion will pay for incidental costs is $1000 per home.
HOW DO YOU APPLY TO HAVE YOUR INCIDENTAL EXPENSES REIMBURSED?
When you are likely to incur incidental costs as a result of an authorized and warranted repair, you should inform the Warranty Services Representative at Tarion handling your file.
Tarion will look into the matter and then determine whether Tarion will reimburse you for those costs, up to a maximum of $1,000. Tarion will inform you of its decision in writing.
If Tarion agrees to pay for an incidental cost, you will be offered a cash settlement. If you agree to the cash settlement, those funds will be sent to you.
For more information about reimbursement of incidental costs, contact 1-877-982-7466.
The Ontario New Home Warranties Plan Act provides warranty protection to new home buyers in Ontario, covering, for example, defects in workmanship, water penetration and major structural defects as well as delayed closing and deposit protection.
We recognize that homeowners are occasionally faced with unexpected expenses because their home is uninhabitable during the repair or remediation of a warranted item. These expenses may include, for example, temporary accommodation, food, travelling and storage.
If Tarion has arranged for a repair or remediation of a warranted item and determines that the homeowner will incur expenses because the home cannot be lived in during the repair, the homeowner may be entitled to receive some additional assistance from Tarion in the form of a Temporary Relocation Allowance.
This Allowance provides up to $150 for each day that the home cannot be lived in.
Tarion does not require receipts or other proof of expenses. The start date and finish date of when the home was uninhabitable is determined by Tarion.
Ontario's new home warranty does not require payment of relocation costs. This Allowance is a customer service gesture by Tarion. It helps contribute towards a homeowner's expenses, but is not meant to provide full compensation for any and all expenses incurred.
WHAT MAKES A HOME UNINHABITABLE?
Tarion may determine a home is uninhabitable if an essential part of it cannot be used by the home's occupant(s) in the way one would reasonably expect. For example, a home may be uninhabitable if the warranted item or the repair or remediation of that item:
makes the kitchen unusable;
makes all toilets and/or all bathtubs/showers unusable;
makes the staircase to the upper floor unusable or unsafe;
adversely affects the structural integrity of the home; or
involves remediation of mould or another harmful substance.
HOW DO YOU APPLY FOR THE ALLOWANCE?
If you have made a warranty claim and you believe the required repair or remediation will render your home uninhabitable, you can request a Temporary Relocation Allowance. Tarion will then assess your request and notify you in writing as to whether or not you are eligible for this Allowance.
If you are eligible, Tarion will also inform you in writing of the exact time period for which the Temporary Relocation Allowance will be paid.
For more information about the Temporary Relocation Allowance, contact 1-877-982-7466.