Determined to squelch illegal home building in Ontario and enhance consumer knowledge about the housing industry, three provincial organizations have banded together to form the Ontario Building Partnership.
Representatives from Tarion – which administers the Ontario New Home Warranties Plan Act and regulates new home builders – as well as from the Ontario Home Builders’ Association (OHBA) and the Ontario Building Officials’ Association (OBOA) held a press conference in Ottawa on Monday to highlight the issue of illegal home building and outline the new partnership.
Tarion’s Siloni Waraich explained that homeowners who contract with illegal builders can start out thinking they will save money but end up with a mess when things go wrong. “There are multiple defects in the home, and the builder is nowhere to be found. We’re seeing this more and more … (illegal builders) not building to standards.”
Since 2013, Tarion has opened 72 investigations involving 136 homes in the greater Ottawa area. It has laid 66 charges related to illegal building and obtained 47 convictions in Provincial Offences Court in that same time period.
Enrolment in Tarion a must
Under Ontario law, anyone who plans to build and/or sell a new home, including a condo, must be registered with Tarion and enrol the home in the organization’s program. Among other benefits to homeowners, registration with Tarion means a 7-year warranty, which can be transferred to a new owner if the home is sold.
To be granted registration, a builder has to meet certain conditions, including completing a technical evaluation based on the Ontario Building Code.
Penalties for breaking the law can be severe: fines of up to $250,000 for companies and $50,000 for individuals plus jail sentences of up to two years less a day.
Home buyers often don’t know about the requirement for Tarion registration, said Waraich. And if they ask an illegal builder about Tarion, they’ll typically get a reply like, “’I have my own warranty’ or ‘Tarion costs $15,000,’ which is not true.” In fact, the fee for enrolling a $450,000-$500,000 home with Tarion is less than $1,100 including HST.
To ensure a builder is registered, home buyers should visit the Ontario Builder Directory on Tarion’s website before signing a purchase agreement.
The risks of an illegally built home
While Waraich said that an illegally built home typically suffers from defects in finishes and that structural issues are rarer, Tarion does point to cases like a recent illegal building conviction where the home’s HVAC system was undersized and improperly installed. Not only did that mean that the house was inadequately heated, but the water for the heating system was plumbed through the same lines as the drinking water – a potential health and safety concern.
Tarion points out that a builder who skirts the registration system may also flout workplace safety and other regulations. That could leave the homeowner open to liability.
“The effort to save a few dollars at the front end could end up costing you in the long run,” said Joe Vaccaro, CEO of OHBA.
The partnership
While Tarion, OHBA and OBOA have traditionally worked together, the Ontario Building Partnership, formed last fall, aims to do more for Ontario home buyers and the building industry. That includes an increased emphasis on local consumer education and awareness, improving industry standards, and pushing for better protection of home buyers from illegal building.
The awareness part of the mandate includes a current “sweep” of Ottawa by Tarion to identify illegally built homes. Tarion asks that anyone who thinks they’ve purchased an illegal house to contact Tarion.
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