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Speaker's Corner: Tarion’s model offers many benefits

Tarion Warranty Corp., like other organizations designated by statute to administer consumer protection, has the authority to operate with oversight but also with a measure of independence that benefits the delivery of services. The government conceptualized and implemented this decision on a proven model and created the delegated administrative authority model to provide for the effective delivery of services while removing the risk to taxpayers.

Opinion pieces such as Alan Shanoff’s March 30 commentary on Tarion’s regulatory model ignore the benefits of this organizational approach and the importance of independence.

Organizations such as Tarion independently finance risk and coverage while developing expertise, efficiency, and organization without using tax dollars. The organization is not a government agency and is neither staffed with public servants nor paid from tax dollars. It is a private, not-for-profit, non-share capital corporation with a mandate to administer the Ontario New Home Warranties Plan Act.

Over the years, the government and outside experts have reviewed this model, and all reports recommended continuation or expansion of it. They concluded that the independent delegated administrative authority model reduces costs for the government, improves regulatory outcomes and efficiencies, and increases industry engagement.

Over the last 10 years while I have been a member of the board, I have seen how the model allows for forward movement. Independence allows Tarion to act quickly on issues. This year, after receiving feedback at our last annual public meeting, Tarion’s chief executive officer and I met with the Licence Appeal Tribunal to explore ways to improve the appeal process.  We subsequently initiated an internal dispute resolution review to look at how Tarion could improve service delivery to homeowners. This year, we were also able to build consensus among stakeholders and developed a model to curb illegal and fraudulent building.

Tarion’s board of directors has changed its own composition to reflect balanced stakeholder representation and created a consumer advisory council to provide a consumer perspective on issues. This council includes new homeowners, condominium association presidents, real estate professionals, and industry standards regulators.

Tarion introduced a public consultation process five years ago that recognized the need to engage stakeholders during our policy development process. We continue to look for better ways to solicit input, and the addition of roundtable discussions with industry leaders, consumers, and employees has increased input on all of our policy proposals. Tarion also created an ombudsperson for homeowners who feel it has treated them unfairly. In addition, Tarion has implemented many of the ombudsperson’s recommendations such as improving the handling of mould and special seasonal warranty claims and ensuring informed consent when conciliations are cancelled. Tarion’s most recent public consultation began with the recommendation from the ombudsperson to clarify the rules on chargeability.

By being able to implement change quickly and effectively, Tarion is now a leader in aggregate warranty coverage in Canada. Over the last 10 years, Tarion has invested in online systems that make it easier for new homebuyers to interact with it; doubled warranty coverage to $300,000 from $150,000; expanded protection for consumers whose closing has been delayed (Ontario is the only province providing such coverage); increased licensing requirements for high-rise condominiums requiring builders to hire outside consultants to review and report at major stages of construction; strengthened the warranty and builder accountability for major structural defects; introduced warranty protection related to radon; made amendments to purchase agreements to expand disclosure of closing adjustment costs; and expanded details about a builder’s record in the Ontario builder directory.

Independence has allowed Tarion to efficiently manage its financial affairs at no risk to Ontario’s taxpayers. Over the last 10 years, Tarion paid out more than $100 million in claims and maintains a strong and stable reserve fund to protect new homebuyers’ deposits and their warranty in the event of a catastrophic event, something that has happened in other provinces. Tarion has done this without unduly increasing costs to homeowners.

Even though it is not a public listed entity, Tarion follows best practices in its accounting, reporting, and actuarial standards in accordance with international financial reporting standards. An external appointed actuary reviews Tarion’s warranty liabilities in accordance with accepted actuarial practice in Canada and a public accounting firm audits our financial statements. We do all of this to ensure we are more transparent and accountable to the public.

This model also provides the Ministry of Government and Consumer Services with oversight of Tarion through its accountability agreement. The government contributes to board composition and the nomination process and requires quarterly reports to the ministry, annual reports, audited financial statements, annual business plans, yearly regulatory plans, and annual public meetings.

Since 2007, Tarion, along with other delegated administrative authorities, has had to conduct annual consumer surveys. Conducted by Harris Decima, the most recent survey shows a consumer satisfaction rate of 83 per cent. With more than 90 per cent of warranty issues resolved without Tarion having to step in and more than 99 per cent of claims resolved when it does intervene, it is fairly clear that the model works.

I am proud of the work that Tarion has done over the last decade while I have been on its board. While there is always room for improvement, changing a proven model could adversely affect Ontario’s taxpayers. We need to always look at resetting the table rather than kicking the legs out from under it. Looking forward, I believe Tarion will continue to make advancements as it has over the last decade and will create fairness and confidence in the new home buying experience with engagement and co-operation.                                             


Chris Spiteri is chairman of the board for Tarion Warranty Corp. and a lawyer practising in the areas of corporate commercial law and real estate.

  • Ray Smith
    In giving Tarion autonomy, the provincial government has found an excuse to avoid involvement. That means no help from the supposed overseer, the Ministry of Government and Consumer Services (in the latest iteration), who will by default claim they cannot get involved with the independent warranty corporation. Tarion created and appointed an ombudsperson within the corporation -- no conflict of interest there! Tarion lawyers have said that they will vehemently dispute a $500 claim. I'm sure they charge a lot more than that per hour, so there's where your mandatory warranty fees go, in part. And the Tarion performance surveys I have seen are worded so carefully as to make it almost impossible to actually put forth a negative opinion. The self-serving and biased article Mr. Spiteri wrote ignores the simple fact that Tarion does not serve the homeowner nearly as well as it serves the builder. A total revamp is needed, and the Ontario Ombudsman must have and retain oversight.
  • Earl Shuman
    Spiteri's a lawyer. Enough said.
  • Dan Browne
    Hi folks, let me get this straight. You all have issues with your newly built homes. Your builder won't help, nor will the warranty, you paid for, that promises to make it right, OBC confirming, free of defects, etc. Then you take your appeal to the LAT, who will pay to defend the builder, spend copious amounts of money to not fix things [when its probably cheaper to repair], in other words, you as consumers, paid for something NOT to happen. Why is Tarion not in your corner, why do they side with the builder, no matter what? Why do they rely on their counsel saying, "That as regulators of the new home warranty, the Ontario Building Code has no relevance to us".. I can think of only one other thing like that. You open a Bakery, a gentleman comes in and says, give me, say, $200.00 a week, and I guarantee I won't do anything". That sounds like criminal activity to me. Perhaps fraud? When one pays for a service, one expects service, not to be denied. Mr. Spiteri and others are culpable.
  • Daniel Emery
    Re Daniel Emery, Once the LAT has made a decision, it doesn't have any teeth to enforce remedies. So what is the point, really? No mention of my builders' lousy record, he is in good standing with Tarion. Why is that? Sec.14 ONHWP Act clearly states that compensatory relief is afforded to home owners in some cases. Builder builds my home with County documented OBC violations and defects, Warranty Corp. does nothing to rectify, taking 2 years to even show up to assess. Then creates another OBC violation during assessment. Mr. Bogach has been quoted "Tarion will backstop the warranty" One of 2 things Mr. Spiteri, Mr. Bogach, like you, relies too much on your PR Dept. OR he is a liar. Strong words to be sure. You are basically saying, sorry you lost your house because we wouldn't offer any mandated warranty help. Now I am entitled to nothing. Is that what you call a warranty? I paid for a service you didn't provide. Can I have $250K for the house I lost, due to your lack of "service".....
  • Gay Viecelli
    At Tarion's 2014 Annual Public Meeting on Apr. 30th, 2014, I conveyed some of my experience with TARION. At the end of my remarks from the floor, you, Mr. Spiteri, made a statement which I trusted ... that perhaps TARION should level the playing field for new home owners who do go to LAT. Given what is still happening, my trust was definitely misplaced. Your article says a lot more than you think. We definitely need Bill 60!!!
  • Daniel Emery
    Tarion legal dept. says, since you did not own the lands prior to new construction, you are entitled to any compensatory relief, via Sec.14, ONHWP Act.WRONG! The new home was built on the exact same lot that my original home was on. It was destroyed by a devastating fire loss. Bad enough to lose home and everything in it to a fire, but then to lose the one built to replace it, due to Tarion lack of action is deplorable. Here's straight on FACTS Mr. Spiteri: Fill your basement with 4-6 inches of standing water, leave it there for two years, watch the mold grow, and then beg and plead your warranty corp. for help to no avail. Tell Tarion you have no Final Occupancy Permit about 30 times over the course of two years, OBC violations are holding it in limbo, until remedied. Then, try to get mortgage required house ins, it cant be done. As CEO, I leave you accountable for letting me twist in the wind. Hey, once you leave Tarion, would you represent me to sue Tarion for the loss of my home?
  • Daniel Emery
    Mr. Spiteri must have spent a fair bit of time with the Tarion PR spin doctors, for what you say, isn't happening. I waited over 48 months for Ontario Building Code violations to be addressed. Builder said call Tarion, Tarion said speak with your builder. Pass the buck, no one did anything.. I stand corrected Tarion did come two years later, field rep created yet another OBC violation, told me to buy some bleach to wash the mold that was dripping done the walls, and then had the audacity to joke, "you could use the mushrooms growing out of your carpet for your spaghetti sauce". All those OBC violations negated the issuance of my Final Occupancy Permit, to legally inhabit my home, for over four years. Water, mold, no legal right to inhabit, I couldn't secure mortgage required house insurance, my bank foreclosed. House sat empty for two years until sold to unsuspecting couple. I'm now told, no ONHWP Sec 14 financial relief because you no longer own the house. Thanks for taking my life.
  • nicole lalonde
    TARION'S MODEL PROVIDES MORE THAN A FEW DRAWBACKS !!
    What is said here and what is done are quite different. Easy to say that Tarion “ doubled warranty coverage to $300,000 from $150,000 “ and easy to actually legalize the statement ; how many claims actually provide the compensation that is duly owed .... let alone the ceiling of $ 300,000 , even when due ....Laudable piece of “ exit “ material ..... Great job of keeping the cover on a boiling pot of snakes !
  • Barbara Captijn
    Tarion's Chair says he's "proud of his work" over 10 years on Tarion's board. He fails to mention of course he presided last year over the most angry consumer feedback session in Tarion's history at its Annual Public Meeting. Consumers gave him and his CEO over 1 3/4 hours of complaints about lack of consumer protection, bias toward builders, and heavy-handed use of the License Appeal Tribunal to dismiss claims. Also during his tenure (03/14) a group of Tarion's employees sent an unprecedented "whistleblower" letter to the Premier of Ontario asking for transparency and accountability at Tarion. Another advantage to running a government-granted monopoly with minimal oversight is if you don't like the feedback you get, just "say it ain't so".
  • Joost C
    A self congratulatory opinion by the Chairman of the Board.
    Given the fact that Tarion is a monopoly whose clients are obliged to buy its products , anybody could run that business with a degree of success. Looking at the figures I prefer to conclude that Tarion is in fact a highly profitable investment company dominated by builders, masquerading as a consumer protection organisation. Only a minimal amount per year is paid out in consumer claims! No pro active consumer protection initiatives! Not effective in stopping shoddy builders! No transparency ! Tarion needs competition and an independent compliance officer. New home buyers need better protection and more choice in warranty providers
  • Barbara Captijn
    Mr.Spiteri is trying awfully hard to push a square peg into a round hole. This should raise skepticism. He's trying to sell us the idea that a government-granted monopoly with minimal oversight is great; and that he's done a great job for 10 years on the board of a monopoly whose product the government forces us to buy. Monopolies are not known as good providers of services, because consumers have nowhere else to go, the monopoly has no incentive to improve, and the government simply prohibits all competition. If that isn't scary enough, the Tarion monopoly has little oversight. Red flags should be flying everywhere on this "model". Add to THIS Tarions' annual rev is approx. $33 million (mandatory fees), $34 million in investment income, they pay themselves $26 MILLION in SALARIES, while only $3.5 million in claims. This financial snapshot should also raise alarms. It seems he's selling turkeys on the benefits of Christmas. What happens to the turkeys, he doesn't have to care.
  • Ben Collings
    Yes Tarion has made some small improvements in the last tenyears. Why did it take ten years? Homes built in Canada need special attention taken with roof, foundation and insulation details. We had all three defects in our home and all of which were ignored by Tarion. Foundation cracks are not normal shrinkage. I will never have another new home built without a 100% inspection by an independent. Tarion failed the grade in 2003 and it sounds like not much has changed. Bill 60 is long over-due and so is a building code up-grade.
  • Gurpreet Singh
    Tarion is a monopoly with a “consumer protection” mandate, and has the responsibility to regulate and license builders. Tarion has the resources to provide mediation or other problem-solving options to consumers without recourse to a courtroom.
    Yet the LAT continues to be the appeal mechanism for Tarion’s decisions, with Tarion/builders winning 83-96% of the cases, at the taxpayer’s expense.
    Many homeowners cannot afford to retain the services of legal counsel and technical experts. However, Tarion always has funding to hire experts. What can be done to level the playing field? • How much does Tarion spend on lawyers (in-house and external) to fight consumers at the LAT? Are these amounts appropriate, given Tarion’s consumer protection mandate? • When a claim is denied and a consumer appeals to the LAT, Tarion uses mandatory fees paid by consumers to defend the builder. Given that it is the builder’s warranty, should the builder not be responsible for defending it? •
  • Don Maycock
    This post only allows 1000 characters, so it's impossible to convey the bureaucracy of Tarion in this space. Bill 60 is a start. Mr Spiteri has no idea at the consumer "grass roots" level what goes on. The Tarion process is "forced commerce" where the homeowner must pay for this insurance and has no ability to shop...it's simply tacked on to your bill at the lawyer's office.

    I have dealt with the builder and Tarion on my most recent purchase and had it not been for the level of documentation and detail I made from the start, there is no way I would have been successful.

    Also, the Canadians for Properly Built Homes (CPBH) organization at www.canadiansforproperlybuilthomes.com provided suggestions and support such as meeting with my MPP (which I did) and requesting their intervention in my case. It resulted in a special meeting with the CEO of Tarion, a full re-inspection where I finally prevailed.

    No homeowner should have to go to these lengths!
  • Lorraine C.
    Mr. Spiteri - this is a self-serving article to make YOU feel better. You're proud of the work Tarion has done over the last decade. Really? Mr. Spiteri - you are going to bed at night with no worries. Not a thought about the 60,000 Ontario families that are in a mess because of bad home building - and Tarion not helping when it should. You are choosing to turn away from reality! It is truly shameful. In this day and age, all other businesses are made accountable. Why not Tarion? This is broken and needs to change. Ontario residents need to start speaking up. It is not our nature as Canadians, but, the time is now! Tarion - corporate greed - will continue in their selfish ways - until the people effected take a stand. Bill 60 is way overdue.
  • Lynne Gibbons
    Wow! Alan's article and response must have surely ruffled feathers to create this article full of blatant lies only a Tarion paid lawyer could enjoy. Non-profit, that is a joke! Tarion's profit is in the millions. Proven, proven to fail homeowners! Money goes into the boards pockets and Tarion completely ignores the legitimate problems this is what is proven! The builders hide behind Tarion and treat homeowners problems as if they do not exist! Tarion does not work and ignoring the homeowners issues will just continue the focus until changes are made! We will continue to fight Tarion for homeowners rights, Tarion has no accountability and that needs to change! We need Bill 60! Spiteri should be ashamed!
  • nicole lalonde
    TARION'S MODEL PROVIDES MORE THAN A FEW DRAWBACKS !!
    “ The government conceptualized and implemented this decision on a proven model and created the delegated administrative authority model to provide for the effective delivery of services while removing the risk to taxpayers. “ What does this mean Mr. Spiteri .... What is the PROVEN MODEL, where was it tested , how did it become “ proven “ and please PROVE that it removes the risk to taxpayers ....SHOW ME... go very slowly ...
  • John C.
    John G. The only industry I can think of that is filled with incompetence, yet sought after and lucrative/profitable is -GOVERNMENT!! MPs, MPPs, now we are learning of the Sentate in Canada...filled incompetence and a mindset of self-riteous entitlement. These people only say what you want to hear with cameras rolling, the rest of the time they hide. Never rock the boat, never make a stand, never get out of line. It's called self-preservation and job security. I've tried countless times with our Tarion involvement to get help...there is no help from these clowns. MPP actually threatened me with calling the OPP if I didn't stop thing to get him to do his job! U.S. government even worse, they don't try very hard to cover themselves. Lobbyists are the norm and control the world by controlling government. There is more to Tarion here, there is a reason they've been allowed to persist and spin out of control to this degree untouched and unconcerned by their actions.
  • Witold Ferenc
    Consumers and taxpayers deserve decent and timely service during the Tarion warranty administration process. The existing warranty through Tarion is not transparent and unfortunately is geared towards delaying and dismissing warranty claims. Tarion and the License Appeal Tribunal which has been designated to appeal Tarion's decision should be treating home buyers as the those they are trying to protect and not someone they are trying to defeat. We deserve and need better protection from dishonest builders.
  • John Grasty
    The widespread failure of builders to achieve very loose "minimum standards" of the building code is in itself pathetic. This conversation is nothing more than a distraction from the root cause. The current model is severely outdated and generously serves only the industry and the governments it financially supports. In this day and age the reality is that much higher quality standards should be guaranteed by legislation, and 100 per cent of the time. I can't think of another industry anywhere in the world that is so incompetent, but yet so profitable, which is obviously why there is no desire to change.
  • Karen Somerville
    Mr. Grasty has hit the nail on the head! Quality construction is imperative.

    It is important to note that Tarion also has the responsibility to regulate the builders. Yes, there are good builders in Ontario, but there are also poor/marginal builders. Why is Tarion not quickly addressing these poor/marginal builders that it approved? Why is Tarion not providing warranty to many homeowners who have become victims of shoddy construction? Why is Tarion not fully disclosing these builders' performance records on its web-site? In July 2013, a Toronto Star investigative report concluded that Tarion is keeping "secret" records about some builders' performance. Complaints about inaccuracy of Tarion's builder performance records on its web-site still come in - almost two years after the Star exposed this serious problem.

    Karen Somerville
    President, Canadians for Properly Built Homes
  • nicole lalonde
    TARION'S MODEL PROVIDES MORE THAN A FEW DRAWBACKS !!
    “ Tarion Warranty Corp ........has the authority to operate with oversight but also with a measure of independence that benefits the delivery of services. “
    What does this mean Mr. Spit....ieri .... fla fla language if I ever heard of it ....can someone explain this to me ; from our new homeowner experience..... the measure of independence might be applied when and where it is convenient for TARION ????... could you please indicate if any regulations oversee in which situations the application of such “ measures of independence “ are warranted and if not , then this equates to “ non accountability “ PERIOD.
  • Tarek E
    I read again and trying to wrap my head around the numbers, something is wrong with the math here!! I guess Mr. Spiteri meant 8.3% consumer satisfaction NOT 83% !! However, I agree that 99% of claims resolved when Tarion intervene, but only at the LAT and in favor of builders against homeowners. Mr. Spiteri, why you didn't mention in your letter that homeowners' success rates at the LAT was only 7% in 2014? As for doubling the coverage from 150000 to 300000, this benefits Tarion only so there is enough money to be spent on lawyers, expert witnesses that write reports against homeowners, and other hidden expenses. Mr. Spiteri, you forgot to mention how many millions of dollars Tarion spend every year on legal actions from fees that homeowners pay!!! If you are proud of what Tarion did in the past 10 years and if you think the letter that filled with lies is true, then why is Tarion frightened and not allowing the ombudsman to have oversight? Enough BULYING, Bill 60 is long overdue..
  • Antonina Ferenc
    Ontario needs Bill 60 badly to help Make Tarion Accountable!
  • Alan Greenberg
    Assuming about 350.000 homes under warranty, and using your consumer satisfaction rate of 83%, that's about 60,000 Ontario families saying that they are dissatisfied with Tarion. This is clearly not acceptable.

    The very slow, incremental change that has been underway at Tarion for the past 40 years is inadequate. It's time for meaningful change: Bill 60, the Tarion Accountability and Oversight Act is urgently needed now!
    A lot of "LAWYER" talk but very little substance. Sounds like Mr. Spiteri is positioning for a political career.
  • Aleksandra Ferenc
    Mr. Spiteri fails to mention that Tarion is a government created monopoly which new homebuyers are forced to get. He fails to mention the benefits such as choice that consumers would get if Tarion were to operate in a free market system.
    Tarion also has the advantage unlike other insurance companies of passing the responsibility for warranty claims directly onto those who in most cases are willfully negligent. If the builder does not comply with the Ontario Building Code or meet the other warranty requirements then Tarion can require the builder to fix the problem or compensate the homeowner. Tarion is also the regulator of the industry and can simply take away the Builder’s license should they fail to comply.
    I speak with first-hand knowledge about the reality of how Tarion operates in Ontario. On the facebook page https://www.facebook.com/maketarionaccountable we chronicle much of what our family has experienced with Tarion.
  • Aleksandra Ferenc
    Tarion needs to become accountable!
  • Fred B
    Consumers need protection from this corporation. What is wrong with transparency and oversight by an independent agency like the Ombudsman or the auditor general? Look what happened with senate expense claims when a spotlight is shone on it? Look at what was uncovered at ORNGE!
    Support Bill 60.
  • Ed Whoft
    I question the %'s used in the article claiming that 90% of claims are resolved without the need of Tarion intervention.
    I'd like to see another % researched. How many claimants withdraw their complaint because it would be futile to continue with it.
    In my case I had shingles that lift during strong winds and a closet that is so cold that frost forms on the walls in the dead of winter.
    My Tarion rep advised that they do not go onto roofs, nor do they go into attics (Workman's Comp issues) He would have to examine the roof from the ground.
    I decided to withdraw my claim in order to receive a refund of my $282.50. An amount that is required when you request a conciliation inspection. I used the $282.50 toward repairs.
  • Fred B
    It has been my experience that whenever anyone fights a logical and sensible suggestion, they usually have something to hide. Think senate expenditures.

    What is wrong with having independent oversight? Support Bill 60!
  • Jeffrey Ferland
    An accountability agreement with the government sounds good but what does this agreement entail? to create a new home buyer ombudsperson who is paid by and accountable to the same corporation they are supposed to investigate.

    Tarion is the only delegated administrative authority in Ontario that can make their own by-laws. What does the accountability agreement say about this. It states Tarion will "provide the ministry with a minimum of 30 days to review draft materials prior to any public posting of the regulation."

    Where is the accountability here when our government cannot even exercise any control over the by-laws which we are bound by?

    Bill 60 will at least allow the Ombudsman of Ontario and the Auditor General to have oversight of Tarion. What is so wrong with this?

    Please ask your Liberal MPP to support Bill 60 so when you or someone else you care about needs this protection it is there.
  • Tarek E
    Agreed, definitely Mr. Spiteri talking about another company that doesn't even exist, Tarion is a corporation for builders against homeowners!!!
  • John C
    Impossible to read this letter filled with lies and drivel. Either Mr. Spiteri has a concussion or he simply doesn't understand the term 'consumer protection'. From my perspective, it does not mean crush and destroy innocent families whose only fault was the purchase of a new home in Ontario! 83% success rate...OMG, please! I encourage you to produce 1 family who even if they were fortunate to have any help from Tarion, were not worn out, financially exhausted or disillusioned thinking the 'warranty' had value. I assure you even that family would not be 'satisfied. So, you're proud to work for Tarion, huh? That speaks volumes to your character...shame on you! For your bi-weekly cheque you knowingly and contribute to the devastation of Ontario familes. If you're not part of the solution - YOU ARE THE PROBLEM! I've been in this 5 years with Tarion and there is nothing satisfactory about our 'Tarion' experience or our lifetime of debt of deficiencies, engineers/lawyers. ALL UNNECESSARY
  • Naz Obredor
    I wonder if you noted the comments on Mr. Shanoff's article? Where were the 83% of the satisfied consumer's posts? I think your numbers need to be made public and who paid Harris Decima Mr. Spiteri? I honestly want to ask you what company your are speaking about because nothing in this article resonates with me. Does it make sense for Tarion to fight homeowners at the LAT and spend more money in a one-sided court than to fix the actual defects? Your Tarion promised my Builder a non-chargeability before my Conciliation. Your Tarion did not provide the Builder with my complete 30 day Deficiency list. Your Tarion created a report with false statements to rule non warranted on my Decision Letter. Your Tarion did not fairly look at my evidence to support my claims. Your Tarion needs some competition in the warranty business. I certainly did not get what I paid for. How about a community meeting with all your satisfied and non satisfied homeowners. That would be a story worth reading.
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