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Ontario to replace Tarion with new regulator for home builders

Tracy MacCharles, the Ontario Minister for Youth and Children Services, is photographed in her Toronto office on April 20, 2016.

Fred Lum/The Globe and Mail

The Ontario government is taking steps to boost consumer confidence in the industry for newly-built homes in the province.

A new standalone regulator will provide better oversight of home builders, Minister of Government and Consumer Services Tracy MacCharles said.

The proposed changes to the Ontario New Home Warranties Plan Act and the Tarion Warranty Corp. were unveiled Tuesday by Ms. MacCharles, who plans to introduce a bill in the legislature this fall.

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She plans to move responsibility for setting warranty terms from Tarion to the government.

"I believe that separating these functions would allow each to focus their efforts on delivering their respective mandates," she said. "It would give consumers greater confidence in the new home warranty plan."

The minister is also asking for new deposit-protection measures that better reflect today's house prices and the deposits required. She's asking Tarion to look at the expansion of deposit protection with a target implementation date of Jan. 1, 2018.

Ms. MacCharles said she has heard tales of new-home buyers plagued with problems and incredibly distressed. As a result, she wants to make the dispute resolution process easier.

"I've heard of homeowners having to diagnose their own home's defects and to provide evidence."

Consumers should be able to show credible symptoms without having to prove causes, she said.

At the same time, developers will receive better guidance in resolving disputes.

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The changes come after a 2015 review of the system by John Douglas Cunningham, a former associate chief justice in the Ontario Superior Court. Justice Cunningham concluded that consumers and home builders both felt disadvantaged by the system. Ms. MacCharles said that these conflicting perceptions partly arose from the fact that Tarion was dealing with both home buyers and builders. Each groups felt the system was tilted in favour of the other.

For about 40 years, Tarion has overseen the warranty program for newly-built homes as well as regulating home builders. Tarion was given roles and responsibilities that often overlapped, including administering the warranty plan and the guarantee fund, setting some terms of the warranties and adjudicating disputes between homeowners and builders.

The home-building sector is an important driver of the province's economy and most buyers are satisfied with their purchase, Ms. MacCharles added. But she said Tarion has been too far removed from government and lacking in sufficient oversight. The size and complexity of the building industry has also changed since the Tarion program was conceived in 1976, the minister said.

She pointed to the fact that about 50 per cent of new homes built today are condominium units.

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