The Twists and Turns of Illegal Building in Ontario

Buying a new home – especially if it’s your very first one – is a key milestone. It opens a new chapter in our lives and sets us on a new path. It’s exciting and thrilling. Yet, as with all new beginnings, it can also stir up anxieties, putting us on high alert when things aren’t going exactly as planned.

Such was the case with Saanvi (not her real name). After several delays on her closing date, the St. Catharine’s home buyer became suspicious that something wasn’t right. She didn’t know what it could be, so she called Tarion for help.

By reaching out, Saanvi learned that her builder was not registered with Tarion. In fact, his registration was revoked. Then she discovered that her new home – along with the other seven townhomes in the division – had not been enrolled in Ontario’s warranty program prior to construction.

Townhouses

All builders in Ontario must be registered with Tarion in order to build new homes. They also must enrol each new home into the warranty program.

All builders in Ontario must be registered with Tarion in order to build new homes. They also must enrol each new home into the warranty program. By failing to do both, Saanvi’s builder was not only breaking the law, but was also leaving his customers in the dark about their consumer protection rights.

This story does not end happily for the builder. Tarion has an Enforcement Team that investigates and prosecutes illegal builders in Ontario. The team notified the builder of his offense, which led him to try to re-register with Tarion. However, due to his numerous financial and after-sales customer service issues, Tarion no longer had the confidence in the builder’s capabilities to fulfill his warranty obligations. His application was refused.

“By refusing to register the builder, Tarion hopes to diminish the damage he can cause future new home buyers,” explained Tarion’s Director of Enforcement Dave Roberts. “It is essential for all new home buyers to check the Ontario Builder Directory to make sure you are working with a registered builder before you sign a contract.”

For the homeowners, the story ends on a better note. Since the townhouses had been completed before Saanvi and her new neighbours moved in, and since the warranty is based on the eligibility of the home and not the builder, the homes were placed under warranty for the full seven years. Tarion stepped in to work directly with the homeowners to address their warranty claims.

The builder, on the other hand, was prosecuted for illegally building the eight townhouses and in February 2016 was fined $50,000 plus victim fine surcharges in the St. Catharine’s Provincial Offences Court.

Lessons Learned

  1. Before purchasing newly constructed home, make sure your builder is registered by searching the Ontario Builder Directory.
  2. If you are aware of an illegally-built home, contact Tarion at 1-800-786-6497 (anonymous reports are welcome).

Do you have a story?

Did you experience an issue with your newly constructed home that Tarion helped resolve? If so, share it with us, so other homeowners have the information they need to protect their rights.