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Oct 2022

Tarion Industry Alert—Tarion Seeking Feedback on Regulatory Changes

Transparency, fairness and accountability through Regulation 892

By Brooklyn Lester and Slonee Malhotra

In an effort to build a more transparent, fair and accountable new home warranty and protection program, Tarion is consulting on regulatory changes proposing to support improvements to the Customer Services Standard, increase the warranty compensation limit, and create a Temporary Relocation Warranty.

Proposed Changes 

The proposed changes to Regulation 892 under the Ontario New Home Warranties Plan Act are as follows:

  • Extend the initial homeowner submission period by 10 days (now 40 days) and make the current grace period of 10 days at the end of the first year permanent;
  • Create a mid-year submission at six months;
  • Allow homeowners to add items to a running list of potential defects at any time during the first-year warranty period;
  • Remove the 30-day timeline for a homeowner to request a conciliation and instead allow them to request a conciliation up to 120 days after the close of the first year for any items submitted during the first year;
  • Remove the 30-day timeline for a homeowner to request a conciliation in year two of the warranty and instead allow them to request a conciliation up to 120 days after the close of the second year for any items submitted during the second year;
  • Create a new requirement that Tarion must schedule a conciliation inspection within 15 days of the request being made and make changes to the current requirements for timelines of conducting the conciliation inspection and issuing the assessment report;
  • Increase the warranty compensation limit available from Tarion relating to freehold homes (i.e., lot and dwelling) that do not benefit from additional Common Element protections from $300,000 (current) to $400,000 (proposed); and
  • Create a new Temporary Relocation Warranty of $150/day, to help cover costs associated with temporary accommodations if a repair renders the home uninhabitable.

The proposed changes would come into effect on July 1, 2023.

Participation 

Tarion is accepting feedback from the public and stakeholders between September 29 and November 14, 2022. Comments can be sent to Submissions@Tarion.com.

In addition to accepting submissions, Tarion is collecting input through virtual roundtables and meetings with homeowners.

Tarion is also accepting any comments on matters related to this modernization of the Tarion program, in addition to the specific recommendations proposed.

Questions for Submission

The follow questions have been presented to stakeholders for submissions:

Regarding the proposed changes to the Customer Service Standard

  1. Do you feel these proposed changes strike an appropriate balance between adding flexibility to the process while still maintaining the benefit of having certain milestones?
  2. Will adding a mid-year form address consumers who feel there is too long a gap between the current 30-day (plus grace) form and the year-end form?
  3. The proposal eliminates the 30-day window in which consumers had to request a conciliation inspection and now allow for consumers to ask for one at any time in the first year. However, this could result in overlapping inspections, and/or result in a consumer asking at the end of the year for an inspection on items noted in the first 40 days. Are these challenges manageable for homeowners/builders? Should the ability to request a conciliation inspection be more time limited to reduce the potential issues of overlapping timelines?
  4. Under the proposal it is possible that up to 3 conciliations inspections could be open at the same time in certain circumstances (for example, due to scheduling delays or challenges) – is this an acceptable risk to consumers and builders? Or should there be an express option to consolidate open conciliations where it may be efficient to do so?
  5. Under the proposal consumers will have a much greater ability to request conciliations, but the scheduling of the conciliation will follow the builder repair period. In some cases, the builder may indicate that they do not intend to repair one or more items. In such cases, should the homeowner be able to accelerate a conciliation, or should Tarion have the ability to abridge timelines?
  6. What changes would you like to see Tarion make to improve the information shared between the homeowner and the builder as part of the process?
  7. Are there other items Tarion should consider when implementing changes to the Customer Service Standard?
  8. Do you have any other feedback on the draft amendment to Regulation 892?

Regarding the creation of a new Temporary Relocation Warranty

  1. Is $150 per day an appropriate amount for a homeowner that needs to leave the home? If not, why?
  2. Based on warranty and claims data, Tarion has set the maximum cap at $15,000. Are there justifiable reasons that this should be raised/lowered?
  3. Should the amount of relocation compensation be tied to other factors? (i.e., individual vs family, or geography)
  4. How much of a benefit is having this process simple and easy to access, for example using a fixed amount of 150 times the numbers of days not in the home, vs having the process be specific and exact (requiring a review of receipts and validation of expenses for every claim)?
  5. What other types of impacts should Tarion consider when determining what is “uninhabitable?
  6. Is there any other feedback on the draft amendment to Regulation 892?

Regarding Increasing the Warranty compensation limit

  1. Do you think the proposal to provide $400,000 in coverage for construction warranty (repair) of new homes in Ontario is sufficient, insufficient, or excessive?
  2. Do you agree with the idea of treating condo units and freehold homes differently in this way?
  3. Are there other items Tarion should consider with increasing the warranty compensation limit?
  4. Is there any other feedback on the draft amendment to Regulation 892?


Tarion has committed itself to reform aimed at increasing consumer protection and improving the Ontario New Home Warranties Plan Act. Improvements to the Customer Services Standard, increasing the warranty compensation limit, and creating a Temporary Relocation Warranty are the first of these changes.

If you have any questions about how these changes might impact you, reach out to one of our real estate lawyers today!

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