TARION: FRIEND OR FOE? Have you ever suffered an automobile accident and awakened to find yourself in court opposite your own insurer opposing you? Your own insurance company siding with the person who caused the accident, trying to get him off the hook? Probably not, or youd have changed insurance companies. But you cant change insurance companies if youve purchased a new home and discover defects in it. Youre stuck with Tarion Warranty Corporation, the delegated administrative authority of the Ontario government which has been entrusted with protecting new home buyers. But who is Tarion protecting? Many new home buyers have found out Tarion was not there to protect them when they needed it. You wouldnt expect your new home insurer to side with the builder who built defects into your new home. But that is exactly what has happened to many new home purchasers. As new home buyers, we are obligated to pay a mandatory fee for a new home warranty, passed on to us by Tarions licensed builders. Tarion says they guarantee new homes against builder defects, and protect new home buyers. But consumers have voiced concern for many years to Tarion, the Ministry of Consumer Services, and Premiers McGuinty/Wynne, that theyve been left to repair costly defects on their own, and exhausted their patience and financial resources trying to get compensation from Tarion at the License Appeal Tribunal, or LAT. In these cases, consumers find themselves fighting not just one adversary, but two - Tarion and the builder of their home. With in-house lawyers, and access to technical and legal experts, Tarion has the deck of cards stacked in its favour. If Tarion takes the its not warranted route, and is successful fighting the homeowner at the LAT, the builder (added by Tarion as a co-defendant), is off the hook, and will have no mention of the defect on his Tarion record. The homeowner is then left to repair the defect at his own expense. Is this protecting new home buyers, or new home builders? Tarion appears to many consumers to be a large, affluent corporation largely run by lawyers whose goal is to win cases. Thats what lawyers do, win cases for their clients. But whos the client of Tarion, the homeowner or the builder? And whatever happened to justice, fairness, consumer protection, and shared goals in delivering homes free of defects? The current adversarial system is crushingly expensive for homeowners who cannot afford legal and technical experts, and often have to resort to self-representation. This unfortunately stacks the cards further against the homeowner, since statistics show self-represented plaintiffs invariably fail. The LAT is a highly legalistic forum, heavy on rules and procedures made by lawyers, for lawyers. Many consumers who have gone through it refer to it as a meat-grinder. For builders with in-house legal counsel, the LAT is just another cost of doing business, and a tax-deductible one at that. A win for Tarion at the LAT is often a win for builders as well; both parties often align their interests to get homeowner claims dismissed. If Tarion wins, there is no compensation paid out to the homeowner, and the builder gets off the hook for the defect, and walks away with no record of the defect on the Tarion Builder Directory. The homeowner pays for his court costs, his time away from work, and has to repair the defect on his own. Or, he can proceed to yet another Ontario court, but this is cost prohibitive for many Ontarians. Many have even tragically lost their homes when banks refuse to renew their mortgages, given the homes depreciation due to the defects. The adversarial system is not a way to resolve new home defects. This is not a level playing field for consumers. Many homeowners believed in Tarions promise to protect new home buyers, and found out the hard way this is not much more than a clever marketing slogan. Tarion is a formidable legal adversary with plenty of time, and financial, legal, and technical resources to fight homeowners. Builders know they can shield themselves from accountability too, by hiding behind Tarions not warrantable arguments. So wheres the deterrent for shoddy builders to stop building defects into new homes? If you discover a concealed defect after two years, or if it doesnt fit into Tarions definitions, or if Tarion disagrees with your experts assessment of the problem and repair costs, they can refuse your claim. But you didnt build the home, their licensed builder did! So why is Tarion sitting on the opposite side of the courtroom, fighting you? Isnt this a blame-the-victim strategy? Who can hire the craftiest lawyers, who can use the most bullying/delaying tactics to their advantage, thats how the system seems to work. The most vulnerable party, the homeowner, often gets left with the problem. How much justice can you afford? That will often determine if you get compensation from Tarion. The system is in desperate need of reform to protect the interests of the consumer, and make Tarion accountable to homeowners, not builders. What has been done by the Ontario government to level the playing field for consumers? A glacier melting would have shown more progress. Despite investigative reports in the The Toronto Star in July 2013, despite MPPs of all parties calling for transparency, accountability and reform, despite petitions, Bills, and Motions tabled in the Legislature, the stonewalling of consumers continues. The governing Liberals seem to to tip-toe around the idea of consumer reforms to Tarion. Are they reluctant to run afoul of the interests and privileges of the building industry, this job-creating, political donation powerhouse? Anyone who researches financial contributions from the building industry to political parties will find the amounts of contributions staggering. This may speak volumes about why consumer reforms to Tarion are still in legislative limbo. Is Tarion accountable to any government body? The answer seems to be no. Under current legislation, the Ombudsman of Ontario cannot investigate Tarion, the Auditor General cant either, and Premier Wynne refuses to meet with consumer groups voicing their concerns. Moreover, the Ministry of Consumer Services, despite head-nodding in the direction of consumers, seems largely content with the status quo, getting Tarions report card from Tarion itself. What is Tarions response to consumers? Well, we cant insure everything, says Tarions C.E.O., Mr. Bogach. But Tarion is not just another insurance company. Their warranty is mandatory under Ontario law, they have a monopoly position in the marketplace, they have a public trust function to administer consumer protection legislation, and they are the sole licensor of new home builders. Further, they have an obligation of disclosure to the public of builder records. With their in-house legal department, unlimited access to technical experts, Tarion is a virtual black box as MPP Marchese has described it, enjoying minimal oversight, and reaping the lions share of wins against homeowners at the LAT. Many homeowners feel they would have been better off without the Tarion warranty, which has left them with court costs and has not solved problems. Many have suggested breaking up Tarions monopoly, opening the new home insurance field to other insurers, or splitting off the licensing authority from the warranty-providing function to remedy conflict of interest issues. All good ideas, promptly brushed aside. Tarions monopoly power, without meaningful oversight, continues to spell hardship for new home and condo buyers. Many consumers believe Tarion, with its builder-heavy board of directors, is biased toward protecting the interests and privileges of builders and developers. Many have concluded there is no political will to change this, and that the Ontario government is either asleep, or complicit. In the meantime, the fox is still in charge of guarding the chicken coop. He reports all is well with the chickens. In fact some of them have been very tasty indeed. B.Captijn, M.A. - Small business owner, Tarion warranty holder, and concerned taxpayer. ------------------------------------------------- Short bio: Barbara Captijn is a small business owner in Toronto, a former advertising and public relations executive, a former teacher and linguist, with a current interest in consumer protection issues. ---------------------------------------------------
Posted on: Tue, 04 Mar 2014 23:33:40 +0000
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