Tarion faces government criticism
November 07, 2019
Ontario Auditor General Bonnie Lysyk has leveled a blistering criticism at Tarion, Ontario’s new home warranty provider, claiming the agency places the interest of home builders ahead of new homebuyers.
Tarion’s warranty service is mandatory for new homebuyers, and the cost is typically built into the price of a new home.
In a report released in late October, Lysyk said most of the public complaints about Tarion's dispute resolution process were justified, and that the Ontario Home Builders’ Association (OHBA) "had disproportionate influence over Tarion's decisions and operations."
Under Tarion's own rules, half of its 16-member board of directors must be nominated by the OHBA, which must also approve any regulatory changes.
"We found that this relationship between the Tarion Board and the OHBA created an imbalance over the years that favoured the interests of builders at the expense of homebuyers," the auditor wrote.
"Some Board decisions, such as the implementation of the 30-day submission window, made it difficult for homeowners to access Tarion's services when they needed them most, resulting in the denial of thousands of claims."
A review of 40 random cases where homeowners were denied help after missing the complaint window found 13 involved such major issues as cracked foundation, water leaks, inadequate insulation and even a building code violation—the minimum standard for safety in a home.
In 2018, Tarion received 70,000 requests for assistance from homeowners. Most were resolved directly with the builder but Tarion intervened in about 1,600 cases and, in the end, paid out $17.4 million in compensation or repairs on about 800 new homes, according to a report in the Toronto Star.