Ontario new home buyers will see some reforms in the way homes are regulated and warrantied in late 2020, but the scope and many of the specifics of those changes have not been announced or put out for consultation.

In early December, the government announced it was doubling down on governance reform in the new home sector. It announced its intent to create a new regulator the Home Construction Regulatory Authority to take over licensing of new home builders and vendors in the fall of 2020. This would require builders to meet the licensing requirements to legally build new homes and gain access to having their warranty guaranteed by Tarion Warranty Corporation. It’s still refining the related legislation, for example through Bill 159, Rebuilding Consumer Confidence Act, 2019, currently being considered by the Ontario Legislature’s Standing Committee on Justice Policy.

Currently, Tarion must accept builders of new homes and receive their payments related to warranty protection in order to legally sell a new home in Ontario. Home Construction Regulatory Authority (HCRA), once all related laws related to its creation are proclaimed and new related regulations issued, will control licensing of builders of new homes.

Ontario Government and Consumer Services Minister Lisa Thompson announced that changes to regulation of the new home building sector were going to be “a complete overhaul”.

Recently Tarion’s CEO retired and its chair resigned. Its board is to be reduced from 16 to 12, no more than a third of which will represent homebuilders and vendors, and at least one board member will be required to have some knowledge of dispute resolution and consumer protection.
HCRA will have its own governance structure.

A recently released auditor general review noted Tarion’s warranty claims processes were difficult and senior management was rewarded for minimizing payouts to homeowners, and builders with poor warranty records nonetheless continued to be approved for the warranty backstop.

The government pledged to improve dispute resolution and provide more authority to scrutinize builder applications and inspect homes before the consumer takes occupancy. HCRA’s interim CEO Tim Hadwen has started consultations with builders, consumers and other industry representatives concerning authority operations. Ontario’s Ministry of Government and Consumer Services is drafting regulations for the related Acts.

Consumer groups have pushed for more durable, resilient housing that gets built as promised and in compliance with building codes and standards and have wanted more emphasis on inspection to ensure successful outcomes for home owners.

While Tarion and HCRA and other sector relevant authorities, like Technical Standards and Safety Authority, Electrical Safety Authority, and Real Estate Council of Ontario, report to Ministry of Government and Consumer Services, Ontario’s building code and the governance of municipal inspection is under the control of the Ministry of Municipal Affairs and Housing.

There are other concerns. Consumers are making “climate change ready” homes a higher priority. How can new buyers be assured of this, in a marketplace of false claims and “green washing.” The Consumers Council of Canada has recently published reports on how consumers understand home energy labels, and different options for disclosure of home energy ratings for existing houses

And while the responsibilities are shuffling, the government has not announced any specific changes to requirements of the warranty itself, to either diminish or improve the coverage or reform of the claims process to make it easier for new home owners.