Early last month J.D. Power and Associates released its annual report on condo buyer satisfaction. On the surface it looked like a stinging indictment of GTA builders.
The survey, based on responses from 745 people who registered a newly built condo in 2008 found 40 per cent of them would have chosen another builder if given a second chance. About 68 per cent said their builder did not set realistic expectations for move-in dates. Nearly two-thirds experienced delays in completion; the average waiting time was seven months.
The result was that for the first time since 2006 (when Power started the survey) buyer satisfaction dropped.
“Between 2006 and 2008 buyers satisfaction rose by 6 per cent; this year it dropped by 2 per cent,” says Marc Thibault, real-estate practice leader for Canada at Power. “One of the biggest complaints was that their builder never got back to them after they had signed the deal.
“The other big one was that the number of problems that had to be corrected was up,” he adds. “In past the average on move-in was 13; this time it was 16 and the highest among the builders we surveyed was 22.
“You can understand how unhappy someone who bought a 600-square-foot suite was when they had to sit at home and wait for the builder to send people to correct the problems or to arrange to leave the key with someone while they were at work.”
The condos involved were under construction between late 2005 and late 2008. Granted this was boom times for builders. Competition for trades was fierce and the pace of construction frenzied. That might have contributed to builders having a lax attitude to after-sales service and might also account for shoddier than usual workmanship.
At least that is one of Mr. Thibault's theories.
All sounds great until you talk to the people in the industry.
First Tarion Warranty Corp., the provincial plan which protects home buyers from shoddy work and undue delays says its own monitoring suggests Power may be out in left field.
“We are just not finding any significant increase,” says Howard Bogach, Tarion president. “We have a survey in the works but it won't be completed until the end of the year and with that we will be digging deeper. But so far just by tracking our files we are not seeing any major swing in quality.”
Delays are another matter, however, and that may be the root of the problem. Earlier this year Tarion changed the rules for builders setting stricter standards on how many delays there could be, when builders must notify buyers about delays and set up penalties for those who exceeded those limits.
“There were a lot of delays during those years when these buildings were under way,” he admits. So why the increase in dissatisfaction?
“I think the general level of irritability among buyers went up this spring when the survey was taken,” he says.
Buyers beset by the problems the recession heaped on them, exasperated by the months of delays they faced before finally moving in and frustrated by the lack of communication from builders were just in a cranky mood and the survey was a great chance to vent, he suggests.
He also says 16 complaints about quality is nothing compared to complaints lodged by those who bought new detached homes. Complaints there rose by 29 per cent this year, according to J.D. Power and Mr. Bogash says Tarion's internal surveys say that may be on the low side.
“I saw one situation recently where a buyer had written us wanting about 1,400 things corrected,” he says. But even there it comes back to irritation and frustration, he adds.
“I talked with the inspector we sent and he said the owner had placed those yellow sticky notes next to every poorly filled nail hole in the entire house,” he says.
Stephen Dupuis, president of BILD, the industry trade association says (A) the survey only covered eight builders and as a result may not have much validity and (B) today's slower pace of construction and sales may correct the problem.
That tends to overlook what may really be at issue: Builder after-sales communication with buyers. The builder that has for the past four years topped J.D. Power's satisfaction survey is Tridel Corp. What sets Tridel apart from many of the others is that it has a crackerjack customer service division.
Buyers get a regular newsletter, e-mails and access to a web portal, all of which track progress with Tridel projects. Buyers can just log on to see what is happening and receive speedy responses to queries, says Danielle Feidler, vice president of customer care.
The companies that ranked two and three in the survey – Daniels Corp. and MintoUrban Communities – have similar units whose job is to stay in touch with buyers and keep them right up to date on progress. When delays occur they contact buyers and explain. They also do pre-move-in inspections and closely monitor work done by sub-trades.
“It is a lot less expensive to catch problems as they happen when the crews are there than to deal with them after move-in,” says Ms. Feidler.
Her view is that if the industry paid more attention to its buyers and less to selling out one project and moving on to the next condo, buyer satisfaction would rise speedily.
