Real Estate

Proposed legislation to enhance consumer protection: Conant

By Kathy Rumleski, AdvocateDaily.com Contributor

The provincial government’s plans to amend home warranty legislation is welcome and necessary, says Toronto condominium lawyer Armand Conant.

“Getting balance back between consumers — individual owners and condo corporations — and developers is needed. Proposed changes to strengthen consumer protection when buying new homes, including condos, as well as reforms to the Condominium Act, 1998 are exciting because they’ll boost consumer confidence,” Conant tells AdvocateDaily.com.

The proposed Strengthening Protection for Ontario Consumers Act was announced in October and Phase I of the reforms to the Condominium Act came into force on Nov. 1, while the overall reforms to the Act are being implemented in phases, says Conant, a partner with Shibley Righton LLP.

As part of the reforms, a massive overhaul of the Tarion Warranty Corporation is underway, the Toronto Star reports.

The legislation strips Tarion of its role as regulator of new home builders and creates a new “administrative authority” that will regulate builders and vendors. It would also give the minister the power to appoint a minority of board members for the new authorities and choose the chairs.

Tarion will continue to administer warranty claims, says the article.

Tarion was created more than 40 years ago by the province to protect, among other things, the buyers of new homes, including condominiums, by ensuring builders abide by provincial legislation, explains Conant.

The Tarion board currently consists of developers and is funded in part by them so there’s a public perception that Tarion is stacked against the consumer, he says.

There were changes made to the process about 10 years ago, including the timeframe for resolving disputes.

Unfortunately, some developers would drag out construction deficiency claims, Conant says.

“Now when you submit your claim, there’s a timeline built in. If you haven’t resolved it in 18 months, you have the option to go to conciliation. That’s the system today.”

Conant says even after changes a decade ago, the public believes that developers win most of the warranty claims.

He says other problems include the absence of warranty coverage if the condominium building was a conversion and not a new build.

“As long as one square foot of that building was original, it would not have Tarion warranty. But that is changing,” says Conant.

Part of the reforms recently announced by the province come from recommendations made by Associate Chief Justice J. Douglas Cunningham, who was appointed in 2015 to conduct a review of Tarion and the Ontario New Home Warranties Plan Act.

Conant, as a member of the Canadian Condominium Institute, Toronto chapter, participated in meetings with Justice Cunningham as part of a working group. The group then presented a lengthy paper with numerous recommendations and suggestions, including the need to better define construction deficiencies, he says.

“There are too many grey areas and nuances. We need better clarity and certainty to help guide us when it comes to defining construction deficiencies,” he says.

While developers often take a hit in public opinion when it comes to warranty disputes, Conant says both sides have a role to play and must act responsibly.

“There are those who try to claim everything — even when they know they're not warrantable. There are many reputable developers who, although they will defend their position, usually act responsibly and a resolution is eventually reached. It is the other type of developers that have caused the public-perception issues. In addition, the shortage of skilled labour has led some developers to cut corners,” he says.

“There needs to be a better way to define deficiencies to reduce the number of disputes.”

Conant is also pleased that a faster-tracked warranty payment system is being addressed.

“Right now, it takes too long to get a dispute resolved.”

He also says the proposed reforms don’t just affect individual owners owed for problems inside their unit, they also affect condo corporations filing warranty claims for common element construction deficiencies.

Conant wants to be clear that nobody is trying to stop or slow down condominium development.

“We’ve seen a huge growth in condos in the last 15 years. There are 1.6 million Ontarians living in condos and there are more than 10,000 residential condo corporations,” he says.

“We need them built and we realize that developers must make a profit. We’re just trying to get the balance back a bit to where buyers can benefit from enhanced consumer protection from a construction warranty point of view.”

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