Toronto – Tarion is seeking public feedback on proposed changes to Tarion’s deposit coverage framework to help combat illegal vending of new homes and ensure coverage for current and future new home purchasers.
Specifically, Tarion is consulting on the following proposed changes:
- Requiring purchasers of new freehold homes to provide notice and information to Tarion about their new home purchase within a specific period of time after entering into an agreement of purchase and sale with a vendor/builder to qualify for the maximum entitlement to deposit coverage.
- The notice to Tarion would include information about the purchaser, builder, and deposit paid.
- Introduce a variable compensation limit for freehold home deposit coverage depending upon whether the purchaser provides notice to Tarion that they have entered into a new home purchase agreement as would be required.
Purchasers that do not provide notice to Tarion would continue to be eligible for deposit coverage at the variable limit and, in all cases, consumers will continue to receive the full warranty coverage and protections of the construction warranty against defects in their new home.
Additionally, Tarion is seeking public input on changing how Tarion collects fees; namely to charge a portion of the enrolment fee to vendors/builders earlier before purchase agreements are signed to better cover the deposit protection risk.
Providing notice to Tarion of the new home purchase agreement will involve minimal effort for purchasers and would be online, free, and easy to do – and gives Tarion the ability to provide information about the warranty program directly to the purchaser. This change would be supported by a continued, large public awareness campaign to educate potential purchasers, realtors, legal professionals, and mortgage professionals.
It also gives Tarion the ability to verify that the builder has complied with licensing requirements, is authorized to sell, and take proactive actions to mitigate deposit and warranty claim losses and combat illegal vending with the Home Construction Regulatory Authority (HCRA).
These proposed changes are necessary to ensure that current home buyers and purchasers continue to benefit from deposit coverage for new freehold home purchasers. Without a change to the program, deposit coverage exposure for freehold homes fundamentally threatens the viability of the warranty program, impacting Tarion’s ability to provide deposit coverage and leaving consumers at risk.
You can find more details of the changes in the consultation discussion guide here.
Please review the consultation questions found in the consultation guide and submit any feedback on the proposed changes to submissions@tarion.com by November 25, 2024.
About Tarion
Tarion is an independent, not-for-profit, consumer protection organization designated by the provincial government to administer the Ontario New Home Warranties Plan Act (ONHWPA). Tarion provides education, warranty support and dispute resolution services to Ontario’s new home buyers and builders and has been providing consumer protection to Ontarians since 1976.
For media requests please contact:
Andrew Donnachie
media.inquiries@tarion.com