Regulation - LGIC
Tarion Seeks Input On Proposed Regulation Changes
Regulation Number(s):
R.R.O. 1990, Reg. 892
Instrument Type:
Regulation - LGIC
Bill or Act:
Ontario New Home Warranties Plan Act
Summary of Proposal:
Tarion is committed to building a more transparent, fair, and accountable new home warranty and protection program for all Ontarians.
Following consultation on proposed policies in the spring of 2021, Tarion is now consulting on regulatory changes to support improvements to the Customer Service Standard.
Following previous consultations on proposed policies to address the recommendations and other consumer protection initiatives in the spring and fall of 2021, Tarion is now consulting on regulatory changes to support improvements to the Customer Service Standard, an increase to the warranty compensation limit, and the creation of a Temporary Relocation Warranty.
Specifically, Tarion is consulting on proposed changes to Regulation 892 under the Ontario New Home Warranties Plan Act to:
- Extend the initial homeowner submission period by 10 days (i.e., now 40 days) and make the current grace period of 10 days at the end of the first year permanent.
- Create a mid-year submission at six months.
- Allow homeowners to add items to a running list of potential defects at any time during the first-year warranty period.
- Remove the 30-day timeline for a homeowner to request a conciliation and instead allow them to request a conciliation up to 120 days after the close of the first year for any items submitted during the first year.
- Remove the 30-day timeline for a homeowner to request a conciliation in year two of the warranty and instead allow them to request a conciliation up to 120 days after the close of the second year for any items submitted during the second year.
- Create a new requirement that Tarion must schedule a conciliation inspection within 15 days of the request being made and make changes to the current requirements for timelines of conducting the conciliation inspection and issuing the assessment report.
- Increase the warranty compensation limit available from Tarion relating to freehold homes (i.e., lot and dwelling) that do not benefit from additional Common Element protections from $300,000 (current) to $400,000 (proposed).
- Create a new Temporary Relocation Warranty of $150/day, to help cover costs associated with temporary accommodations if a repair renders the home uninhabitable.
Please consider the consultation questions listed below and submit any feedback on the proposed changes to submissions@tarion.com or to Ontario's Regulatory Registry by November 14, 2022.
Following consultation on proposed policies in the spring of 2021, Tarion is now consulting on regulatory changes to support improvements to the Customer Service Standard.
Following previous consultations on proposed policies to address the recommendations and other consumer protection initiatives in the spring and fall of 2021, Tarion is now consulting on regulatory changes to support improvements to the Customer Service Standard, an increase to the warranty compensation limit, and the creation of a Temporary Relocation Warranty.
Specifically, Tarion is consulting on proposed changes to Regulation 892 under the Ontario New Home Warranties Plan Act to:
- Extend the initial homeowner submission period by 10 days (i.e., now 40 days) and make the current grace period of 10 days at the end of the first year permanent.
- Create a mid-year submission at six months.
- Allow homeowners to add items to a running list of potential defects at any time during the first-year warranty period.
- Remove the 30-day timeline for a homeowner to request a conciliation and instead allow them to request a conciliation up to 120 days after the close of the first year for any items submitted during the first year.
- Remove the 30-day timeline for a homeowner to request a conciliation in year two of the warranty and instead allow them to request a conciliation up to 120 days after the close of the second year for any items submitted during the second year.
- Create a new requirement that Tarion must schedule a conciliation inspection within 15 days of the request being made and make changes to the current requirements for timelines of conducting the conciliation inspection and issuing the assessment report.
- Increase the warranty compensation limit available from Tarion relating to freehold homes (i.e., lot and dwelling) that do not benefit from additional Common Element protections from $300,000 (current) to $400,000 (proposed).
- Create a new Temporary Relocation Warranty of $150/day, to help cover costs associated with temporary accommodations if a repair renders the home uninhabitable.
Please consider the consultation questions listed below and submit any feedback on the proposed changes to submissions@tarion.com or to Ontario's Regulatory Registry by November 14, 2022.
Analysis of Regulatory Impact:
Tarion's Customer Service Standard (CSS) is the key process for how claims are handled. Homeowners will benefit from enhanced consumer protection as these measures will help improve homeowners' ability to have warranted issues addressed, fewer timelines being missed by homeowners, and more opportunities for homeowners to seek assistance from Tarion. We anticipate the new processes will result in more opportunities for homeowners to access the warranty coverage and may improve overall coverage by increasing the number of items being covered under the warranty.
For the proposed changes to the CSS and related processes it is difficult to determine direct compliance costs for industry as this will vary depending on several different builder variables, including the size of builder, number of homes under the warranty process, number of forms submitted, IT systems used by the builders, and the builders own internal processes for managing the warranty process.
In general industry will need to make changes to tracking systems/business processes to accommodate the proposed changes as there may now be different timelines for homes and will need to train staff in the changes made to the CSS process.
However, there is no proposed increase to the enrolment fee or to the process by which homes are enrolled in the warranty program associated with this proposal. Additionally, as Tarion continues with the implementation of the CSS changes, there are technology solutions being considered which would compliment these changes that would streamline the builder-Tarion user experience and help to reduce the burden on builders.
The new Temporary Relocation Warranty will benefit homeowners by providing additional consumer protection, as this compensation would now be eligible under the warranty and homeowners may have these warranted items resolved sooner as this may incentivize builders to make repairs in a more efficient manner.
During previous consultations builders communicated that many of them already provide this type of compensation so direct impacts may be lessened, however there may be additional costs to builders to change their current systems for tracking or providing this compensation.
Additionally, there is no proposed increase to the enrolment fee or underwriting process associated with this proposal.
The Warranty Compensation Limit increase will benefit future freehold homeowners from enhanced consumer protection as an increased compensation limit would help them get more overall coverage.
For industry, enrolment fee impacts are anticipated to be zero or minimal and, due to the very low frequency of events where the limit is exceeded, we do not anticipate any blanket impact to Tarion's underwriting requirements on builders because of this policy change.
For the proposed changes to the CSS and related processes it is difficult to determine direct compliance costs for industry as this will vary depending on several different builder variables, including the size of builder, number of homes under the warranty process, number of forms submitted, IT systems used by the builders, and the builders own internal processes for managing the warranty process.
In general industry will need to make changes to tracking systems/business processes to accommodate the proposed changes as there may now be different timelines for homes and will need to train staff in the changes made to the CSS process.
However, there is no proposed increase to the enrolment fee or to the process by which homes are enrolled in the warranty program associated with this proposal. Additionally, as Tarion continues with the implementation of the CSS changes, there are technology solutions being considered which would compliment these changes that would streamline the builder-Tarion user experience and help to reduce the burden on builders.
The new Temporary Relocation Warranty will benefit homeowners by providing additional consumer protection, as this compensation would now be eligible under the warranty and homeowners may have these warranted items resolved sooner as this may incentivize builders to make repairs in a more efficient manner.
During previous consultations builders communicated that many of them already provide this type of compensation so direct impacts may be lessened, however there may be additional costs to builders to change their current systems for tracking or providing this compensation.
Additionally, there is no proposed increase to the enrolment fee or underwriting process associated with this proposal.
The Warranty Compensation Limit increase will benefit future freehold homeowners from enhanced consumer protection as an increased compensation limit would help them get more overall coverage.
For industry, enrolment fee impacts are anticipated to be zero or minimal and, due to the very low frequency of events where the limit is exceeded, we do not anticipate any blanket impact to Tarion's underwriting requirements on builders because of this policy change.
Further Information:
Discussion Guide
Draft Amending Regulation
Proposal Number:
22-MGCS017
Posting Date:
September 29, 2022
Comments Due Date:
November 14, 2022
Contact Address:
56 Wellesley St. W., 6th Floor
Toronto ON
M7A 1C1
Toronto ON
M7A 1C1