Tarion Survey

We recently posted a short survey asking respondents a number of questions about the Ontario New Home Warranty Plan and Tarion.  Because of the short notice of an upcoming meeting with the legislators who are reviewing these two instruments, the Survey had little time to attract great attention.  In the six days the survey ran we did however get 117 responses.   The summary of the survey was:

Survey statistics

177 Respondents

  • 98 Home Inspectors
  • 5 Home Owners
  • 14 Realtors

Home Inspectors that perform “Tarion” warranty Inspections:

CPI         13
PDI         34
1 Yr.       36
2 Yr.       16
7 Yr.       5

Conditions set for HI by Builders

11 Inspectors have had this happen during a PDI inspection

6 Required the inspector to wear personal protective equipment

  • All inspectors complied

4 Builders limited the time for the inspection

  • 1 PDI had to be re-scheduled
  • 2 PDI’s had to be shortened meaning the inspector could not cover all the points
  • 1 saw overall hostility to Inspector from the builder in the time required

1 Was required to use Builders reporting software (He was contracted to Builder)

Inspection Standard of Practice (SoP) used.

4 Inspectors admitted to not using any Standard to perform a Pre-Delivery Inspection (PDI).

36 Inspectors primarily used an Association or Franchise SoP for the PDI or Tarion Warranty Inspections.  Of these inspectors 7 also relied on the Construction Performance Guidelines (CPG) and four used the Ontario Building Code (OBC) as additional guidance.

14 Inspectors primarily used the CPG for the PDI or Tarion Warranty Inspections.  Of these inspectors 7 used the OBC as additional assistance and relied on an Association or Franchise SoP to guide what was being looked at with the remit of the prior two documents.

15 Inspectors primarily used the OBC for the PDI or Tarion Warranty Inspections.  Of these 7 relied on the CPG as additional guidance and only 4 of these referred to an Association or Franchise SoP to guide what was being looked at.

Inspectors comments as to how these documents operate in respect to the Inspection

  • The SoP defines what is inspected; the others are references for deficiency conditions when observed.
  • No perceived conflicts
  • They all address different aspects of the inspection.

Home Owners

Common Concerns

The common concerns of home owners with respect to the purchasing process of a new home were listed as the following:  (Bold Underlined concerns appeared multiple times)

  • Basement leaks
  • Poor building practices
  • Incomplete Items
  • Incomplete construction
  • Cracks in foundation
  • Warranty period not long enough
  • The builder fails to address legitimate items entered into warranty claims
  • Poor warranty coverage by Tarion
  • Structural issues like foundation cracks
  • Homeowners feel Tarion doesn’t force builder repairs
  • CPG guidelines too vague
  • Structural including foundation
  • What exactly is covered under Tarion
  • water penetration into the basement
  • being forced to close on house not finished
  • Incomplete construction
  • Water infiltration before finalizing landscaping

Common Complaints

Common complaints made by the home owners after the closing of a new home were:

  • Builders trivialize concerns. g. ‘it meets Code’; ‘that’s the way its supposed to work’
  • Builders promise to do repairs, but delayed past dates to force homeowners into conciliation
  • The cost of going to conciliation is a barrier to homeowners filing for conciliation
  • The homeowner paid for Tarion warranty protection, but gets penalized when Tarion is needed to be there to protect a homeowner. The system is perceived to be unfair and weighted to fail the homeowner.
  • Tarion is biased towards the builder
  • Windows and doors
  • Actionable issues have too large of a tolerance before action required
  • Builder rep not taking the time to properly review the home and its components
  • Water control around dwelling
  • Proper ventilation of attic
  • Variance from original design
  • Missing upgrades
  • Poor workmanship
  • Claim process – not clearly explained
  • Home operations and equipment not explained
  • use of low grade materials ( e.g., cheap windows, flooring underlayment )
  • Customer being bullied by builder
  • Cracks in foundation (more than house next door)
  • HVAC inefficient

Suggested Fixes

A number of fixes to the way Tarion and the ONHWPA operate came in from across the board (Inspectors, Home Owners and Realtors)   Many had the same solutions.

  • Tarion needs to work harder to be seen as impartial
  • Tarion should interact with homeowners via surveys to explore issues downplayed by builders
  • Tarion: work at defining expectations where homeowner in good faith trusts builder, but gets screwed when the conciliation opportunity is missed
  • Tarion to provide more guidance at activation of warranty
  • Tarion should have hold back on unfinished items and release when home-owner signs off on completion
  • CPG should exceed OBC where manufacturer’s installation recommendations do. (e.g. underlayment for shingles regardless of roof pitch, water management away from foundation – i.e. splash blocks not efficient)
  • Home inspection at PDI
  • Better monitoring by building officials
  • More proactive support by Tarion
  • Reduction of control of Tarion and OBC by Builders

Summary

The greatest concerns, in the buying process, for most homeowners appear to be around water infiltration, structural concerns, and the requirement to complete the PDI while the home is unfinished.  While some of these concerns are not wholly valid, the water management, based upon the OBC is not adequate in many high density sub-divisions and proves over time to be detrimental to new homes.  It is felt that the Warranty period is not long enough.  One respondent actually put that they could get a better warranty on a car, and that had hundreds of moving parts yet cost less than 1/10th the price of her home.

The majority of complaints post-closing appear to be around the use of low grade materials and the builders either failing to make repairs, in a timely manner or at all, and the customer service of the builders.  A number of complaints are around missing upgrades or items, and these seem to correspond to homes that had a PDI before completion.

The areas where people appear to want to see changes to fix the problems are in the areas of Tarion’s perceived bias towards the builders.   This appears to be based upon the heavy loading of the Tarion Board by members of the construction industry.  The lack of pro-active contact with warranty holders, the cost of conciliation and the CPG being reliant on what is seen to be a minimal building code also cropped up on multiple occasions.  Better monitoring of the construction process by inspectors was a common theme.

38% of Inspectors performed a PDI on behalf of their clients.  While this rose to 40% for the 1 year warranty period, it drops sharply to 18% for the 2 year warranty period and down to 6% for the 7 year warranty.  While there appeared to be a concern that the warranty period wasn’t long enough, the low total for homes inspected at this level shows that either the desire to go through the claims process had diminished, or most people had moved and the incoming purchasers did not bother with the warranty process.   Either way this appears to show a lack of confidence in the warranty program.

It also shows that there is a lack of willingness in home owners to consider having a Home Inspection to support them during the Warranty periods.  This will be the subject of a later survey to ascertain if the issue is with the lack of confidence in the Warranty program, the lack of confidence in Inspectors or something else.

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