Real Estate

Proposed Tarion changes a good start: Samaroo

By Mia Clarke, AdvocateDaily.com Associate Editor

Creating a separate regulator for builders of new homes is a good idea, Toronto real estate lawyer Sarita Samaroo tells The Lawyer’s Daily.

But Samaroo, principal of SST Law Professional Corporation, has concerns with the idea of a multi-provider insurance system.

“If there are many providers outside of Tarion, how do we maintain that consistency of what the coverage currently is for purchasers? My personal view would have been to amend the existing warranty coverage so that it’s up to date with the current market status,” she tells the online legal publication.

In a press release, Bill Walker, the minister of government and consumer services, outlined the plan to revamp the Tarion Warranty Corporation. He said the system is “broken.”

“That is why I am pleased to announce that we are taking decisive action to put the people of Ontario first by transforming Tarion and strengthening consumer protection,” Walker said.

He also announced a new round of consultations to “explore whether to break Tarion’s monopoly by introducing multiple warranty providers — a system that is available in other provinces. Walker said he hopes to have a decision later this year,” reports the Toronto Star.

“It’s not clear yet,” Samaroo tells The Lawyer’s Daily, “but can the consumer choose that provider or are they at the mercy of the builder who then chooses the particular provider?”

She says if a multi-provider insurance model is implemented, “consumers will need to be cautioned on how those providers will be regulated,” reports the online publication.

Samaroo says the system needs more transparency — especially since clients often complain to her about fees being charged by builders.

“Oftentimes, for example, development levy surcharges are charged back to the client, but if you look at websites of municipalities, you’ll see the builder was charged a much lower rate in comparison to what they’re charging the purchaser. That’s often where disputes arise,” she says.

Samaroo says the government should consult with real estate lawyers to help identify issues that need to be addressed — like recision periods and cancelled pre-construction projects, for example.

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