Phase 1 Regulations (Support the Overhaul of Ontario's New Home Warranty and Protection Program), Ontario New Home Warranties Plan Act
O. Reg. 627/20
Regulation - LGIC
Bill or Act:
Ontario New Home Warranties Plan Act
Summary of Decision:
The Ontario government took steps to strengthen consumer protection by transforming Tarion and the Ontario new home warranty and protection program and designating the Home Construction Regulatory Authority (HCRA) as the new regulator of new home builders and vendors. The HCRA will provide more effective regulation of builders and vendors of new homes and increased protection for consumers.
A new regulation has been made under the Ontario New Home Warranties Plan Act (ONHWPA). The regulation will support the overhaul of Tarion, the launch of the HCRA and the implementation of changes made to ONHWPA by the Rebuilding Consumer Confidence Act, 2020. The changes, including the new regulation, came into effect February 1, 2021.
Analysis of Regulatory Impact:
The regulation requires all builders and vendors of new homes, including those not licensed under NHCLA, to indemnify Tarion for costs in relation to payouts from the guarantee fund. There are no new costs for licensed builders or vendors that build or sell homes legally.
This change may create new costs for builders and vendors of new homes that fail to get a license from the HCRA (i.e., illegal builders). The NHCLA requires that builders and vendors of new homes be licensed.
September 18, 2020
Summary of Proposal:
The Ontario government is committed to overhauling Ontario's new home warranty and protection program. On February 20, 2019, the government announced plans to establish a separate regulator for new home builders and vendors. The Home Construction Regulatory Authority (HCRA) - incorporated in April 2018 as a not-for-profit corporation - is expected to begin regulating builders and vendors if designated under the New Home Construction Licensing Act, 2017 (NHCLA). Tarion Warranty Corporation (Tarion) will continue to administer the warranties and protections for new homes in Ontario under the Ontario New Homes Warranties Plan Act (ONHWPA). These changes are expected to take place on February 1, 2021, at which time the HCRA would begin its regulatory operations.
In order to provide a successful transition and improve upon existing operations, the Ministry of Government and Consumer Services is proposing the following changes to the ONHWPA regulations:
• Information sharing requirements between Tarion, the proposed new regulatory authority under NHCLA, and the Minister of Government and Consumer Services
• Regulations to support the warranty and protections program
• Indemnification requirements for builders and vendors
• Transition matters
56 Wellesley St. W., 6th Floor, Toronto ON, M7A 1C1
February 1, 2021