What is the Conciliation Process?
Conciliation is a process where Tarion assesses the items on a warranty form and decides whether they are covered under the warranty set out in the Ontario New Home Warranties Plan Act. Conciliation may also be used to assess:
- Whether Tarion agrees with the way a repair was done or offered to be done by the builder prior to conciliation; and/or
- Whether Tarion agrees that a settlement offer by the builder prior to conciliation is reasonable.
This page provides a general overview of the conciliation process, which is outlined in full detail (including exceptions to this general overview) in Registrar Bulletin 1.
The Conciliation Inspection
A conciliation may include an in-person inspection at the home/common elements or a virtual inspection to which you are invited. The inspection is conducted by a Tarion Warranty Services Representative, who is an impartial decision maker.
During the conciliation inspection, the Tarion representative may ask questions, make observations, take photographs, or bring in a specialist to help with an investigation. All of this is to make sure Tarion has the information it needs to assess the items.
Builder Responsibilities
Your responsibilities before the conciliation inspection include the following:
- Continue to address and resolve warranty claim items;
- If items are in dispute, work with the homeowner/condominium corporation to reach a resolution; and,
- Provide Tarion with all documentation supporting your position on any non-warranted items, or any Exceptions to Chargeability outlined in Registrar Bulletin 4.
Your responsibilities during the conciliation inspection include the following:
- Explain why the condition of the item exists; and,
- Explain why the condition is not covered by the warranty or why it has not been resolved.
Conciliation Assessment Report
After Tarion completes its conciliation, we will send you and the homeowner/condominium corporation a copy of our Conciliation Assessment Report. The report will tell you whether the items we assessed are covered under the warranty and if so, need to be resolved by you.
If the report contains items that Tarion has determined are not covered by the warranty, you are not required to take any further action on those items.
If the report contains items that are covered by the warranty, you will have a final 30 days to resolve them in the case of freehold homes, or 90 days in the case of condominium common elements. If any of the warranted items remain outstanding at that time, Tarion will work with the homeowner or condominium corporation directly to resolve them and invoice you for the amount of the compensation or cost of work plus an administration fee of 15 per cent and applicable taxes.
Tarion may conduct a Claim Inspection at the home or common elements to determine if any of the warranted items remain outstanding. At the Claim Inspection, Tarion may consider:
- Whether Tarion agrees with the way a repair was done or offered to be done by the builder;
- Whether Tarion agrees that a settlement offer by the builder is reasonable; and/or
- What, if any, compensation or repair the owner is entitled to receive from the builder or Tarion.
Challenging a Tarion Conciliation Assessment
If you disagree with the findings of a Tarion assessment – specifically whether an item is warranted or a conciliation is chargeable – you may be able to dispute the findings at the Builder Arbitration Forum (BAF).
The BAF is a contractual arbitration process to deal with warranty related disputes between builders and Tarion in a way that is impartial, timely, affordable and final.
Conciliation Consequences
The condominium corporation is the owner of the common elements of a condominium project and is responsible for making common element warranty claims to you. Below is a general overview of the common elements warranty process, which is outlined in full detail in Registrar Bulletin 2.
Note: Vacant land condominiums and common element condominiums are not entitled to statutory warranty coverage.
What happens when Tarion decides that Conciliation is chargeable
When Tarion decides that a conciliation is chargeable, two things happen:
- You will pay Tarion a fee for having to conduct the inspection; and,
- Your company’s record on the Ontario Builder Directory (administered by the Home Construction Regulatory Authority) is updated to reflect that you have received a chargeable conciliation. The chargeable conciliation is a measure of your performance and stays on your record for 10 years.
Chargeable Conciliation Fees
Chargeable conciliation fees are $1000 plus applicable taxes for freehold homes and condominium units and $3000 plus applicable taxes for condominium common elements.
Exceptions to chargeability
Not all conciliations where Tarion finds warranted items are chargeable. A conciliation is “non-chargeable” if you can show that you could/would have complied with your customer service obligations but were unable to do so through no fault of your own.
The following are situations in which a conciliation could be determined to be non-chargeable:
| Exceptions | Description |
|---|---|
| Denied Access | You made reasonable efforts to address the warranted item but the homeowner unreasonably denied access to repair the warranted item(s). |
| Reasonable Repair Refused | You were committed to resolving the warranted item and proposed a reasonable repair. However, the homeowner disagreed with one or more aspects of your plan, such as timing, scope, or method. |
| Reasonable Cash Settlement Refused | You tried to the resolve the warranted item through a reasonable offer of monetary compensation which the homeowner did not accept. |
| Evidence of Prior Satisfaction | You decided to take no further action on an item based on documentation indicating that the homeowner was satisfied with a prior repair or resolution. |
| Re-introduced items or new issue | You did not have a reasonable opportunity to address the warranted item because: a) it was not described accurately enough by the homeowner (including with regard to your obligation to speak with the homeowner to clarify the issue); b) the item was removed from a homeowner’s list and later re-introduced; or c) in the course of repairing or replacing the item, a new and different defect arises, that you were unaware of, but agree to address at or before the conciliation. |
| Shortened or no builder repair period | You were not given reasonable time to address the warranted item either because Tarion decided to abridge the repair period through no fault of your own, or because Tarion failed to provide notice of the claim or conciliation to you. |
| Warranty Decision Overturned by the License Appeal Tribunal (LAT) |
The homeowner’s appeal to the Licence Appeal Tribunal resulted in a reversal of Tarion’s warranty decision.
If you believe that an exception applies to your situation, you must advise Tarion and provide evidence of the exception prior to conciliation. The specific evidence required to support an exception to chargeability is outlined in Registrar Bulletin 4. Please note that if Tarion determines that an exception applies and the conciliation is not chargeable, you are still responsible in almost all cases for resolving the warranted item(s). |