ONTARIO AUDITOR: HOME WARRANTY AGENCY FAILING HOMEBUYERS
Oct 30, 2019
By Bob Komsic
The corporation that is supposed to ensure builders honour warranties on new homes is placing the interests of Ontario builders ahead of homebuyers.
So says provincial auditor general Bonnie Lysyk in a just released report in which she points out Tarion has until only recently operated with little oversight and was allowed to make its own rules.
Tarion is supposed to ensure builders honour warranties on new home which is mandatory with the cost typically included in the sale price.
Lysyk found most public complaints about Tarion’s dispute resolution process were justified and that the Ontario Home Builders Association had ”disproportionate influence over Tarion’s decisions and operations.”
Under Tarion’s rules, half its 16-member board of directors must be nominated by the OHBA, which must also approve any regulatory changes.
While it’s a not-for-profit operation, the auditor general found senior management was rewarded for increasing profits and minimizing payouts to homeowners.
”These incentives might be better suited to a profit-making insurance company than a not-for-profit delegated authority with the mandate to help new homebuyers,” Lysyk wrote in her report.
Tarion and the province have agreed to implement all of her 32 recommendations.
The government’s described Tarion as ”broken,” and has already made a number of changes including stripping Tarion of its regulatory powers and handing those responsibililties to a new agency to reduce conflicts of interest.