Michael Steele / RESCON
The Ontario New home Warranty Plan and Tarion which administer the plan are being put under the microscope.
The provincial government wants to ensure that consumers are adequately protected when purchasing a new home by reviewing the new-home buyers program, having appointed the Honourable J. Douglas Cunningham, QC, to lead a public, independent review of both Tarion and the Ontario New Home Warranties Plan Act. The retired justice also will recommend improvements on accountability, transparency and governance. His review is to be complete by the end of June 2016.
This review is long overdue as much has changed in the construction and technology used to create new homes in more than four decades since the warranty plan was created.
To its credit, Tarion continues to adapt this 40-year-old document to enhance consumer protection by making recent improvements, such as enhancements to warranty coverage and improved enforcement against illegal building. This review will help build on these improvements in order to further protect owners of new homes across the province.
ESTABLISH A NEW BAR
Justice Cunningham has a unique opportunity to establish a new bar in consumer protection. However, for the results to be effective, his recommendations must be balanced and cost-effective, and his vision should not be restricted by current practices. In order for the review process to be effective, it must:
- Ensure that implementation of his recommendations does not increase the cost of housing, which for many is now unaffordable.
- Look at all options including taking away Tarion's monopoly and opening up the warranty of new homes to market competition.
- Ensure that with consumer protection also comes consumer obligations, rights and responsibilities.
- Ensure the recommendations can be implemented in an orderly progressive fashion with opportunity to test their effectiveness prior to full implementation.
RESCON welcomes the process, as it recognizes that a policy established some 40 years ago is no longer relevant to the realities of today. We just need to ensure that the end result doesn’t create another layer of bureaucracy that affects affordability. We’re already seeing a lot of first-time buyers, especially millennials, struggling to get their first taste of home ownership. The more costs put on their backs, the harder it will be for future generations to get onto the housing ladder.
Cunningham is well known in law circles as a skilled advocate, with a balanced approach to carrying out his responsibilities, having presided over hundreds of cases as a trial judge and also with a lot of experience in high-stakes mediation cases since retiring from law in 2012.
Last year, more than 49,000 new homes were enrolled by Tarion — 62 per cent of them were freehold/low-rise homes while 38 per cent were high-rise condominium units.
While there’s always room for improvement, the question that must be posed is "at what cost?”
Guess we’ll find out between now and next summer.
Michael Steele, B. Tech. (C.M.), is the Director of Technical Standards at RESCON. Reach him at firstname.lastname@example.org or @RESCONtech.