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Transforming Tarion

Backgrounder

Transforming Tarion

Ministry of Government and Consumer Services

Ontario's Government is working for the people by transforming Tarion Warranty Corporation to strengthen consumer protection and make lives easier for Ontarians.

Strengthening Tarion's Governance and Oversight

  • Legislative amendments will be introduced and, if passed, will require Tarion to publicly disclose executive and board compensation and move to a more balanced skills-based board composition.
  • These changes demonstrate progress in enhancing Tarion governance, oversight and transparency and give consumers greater confidence in the organization.

Separate Regulator for New Home Builders

  • Transformation plans include establishing a separate regulator for new home builders and vendors through the separation of Tarion's warranty administration and builder and vendor regulation functions.
  • This separation of functions will provide more effective protection for consumers and regulation of builders and vendors. It also addresses concerns about the conflict of interest with Tarion performing both functions.
  • Tarion has been asked to work with the Home Construction Regulatory Authority to build a new administrative authority to act as the independent regulator of new home builders and vendors.
  • The Home Construction Regulatory Authority is a not-for-profit corporation with the intended mandate to become the new builder/vendor regulator of newly built homes.
  • The corporation's first directors will be primarily focused on developing the necessary governance and operational infrastructure to administer a strengthened regulatory framework similar to other modern administrative authorities.  
  • Tarion is expected to continue to seamlessly provide services to new home owners, builders and vendors during the transformation. This service delivery includes ensuring timely resolution for warranty claims made by owners of newly built homes but operating under greater government oversight.

Multi-Provider Insurance Model Analysis 

  • An analysis of a multi-provider insurance model for new home warranties in Ontario will be conducted to explore the feasibility of implementing this in Ontario.
  • The analysis will include consultations with stakeholders in early 2019, including the insurance and new home building sectors, consumer groups, Tarion and our ministry partners.
  • The multi-provider insurance model was a key recommendation for government consideration that came out of the independent public review of the Ontario New Home Warranties Plan Act and Tarion completed by the Honourable Justice Douglas Cunningham. This proposal has also been recommended by the public and some key stakeholders.
  • Ontario's Government for the people anticipates making a decision that is in the best interest of Ontarians later this year.

Better Informing Consumers Buying Pre-Construction Condominiums

  • Ontario's Government for the people has requested that Tarion work with the Condominium Authority of Ontario on new initiatives that will better inform consumers of the potential risks associated with buying pre-construction condominiums.
  • The Minister has requested that Tarion initiate the following consumer protection enhancements within the next six months:
    • Updating the Ontario Builder Directory to include information about developers with a history of condominium project cancellations
    • Developing options to require developers to post information about their condominium development projects on their websites (e.g., information about outstanding approvals or other matters that could cause a project to get cancelled)
    • Working with the Condominium Authority of Ontario to educate prospective buyers about the condominium purchase process
    • Improving information collection on new home construction projects.
  • Tarion has also been requested to make changes to its addenda to agreements of purchase and sale for condominium buyers within the next 12 months to enhance disclosures for consumers about the risks of purchasing pre-construction condominiums. This would include matters that could cause a project to get cancelled, such as outstanding approvals, project financing or restrictive covenants on title.

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