Ontario’s auditor general has released a scathing report accusing the province’s home-building regulator and warranty provider of failing tens of thousands of new homebuyers by putting the interests of builders ahead of consumer protection.
Auditor general Bonnie Lysyk found the processes of Tarion Warranty Corp. were confusing and costly to homebuyers, and that the corporation failed to flag and sanction bad builders.
Lysyk also raised issue with how the not-for-profit organization compensated its senior management, by giving bonuses based on the agency’s profits.
In a special Tarion audit released Wednesday, Lysyk issued 32 recommendations to fix the agency’s “restrictive processes,” ranging from improvements to its customer call centre, to beefed up measures to deter the cancellation of pre-construction condos. There have been 460 developments cancelled in the last decade, according to the auditor.
“There’s been a lot of rules and regulations that favour the builder and the lack of government oversight has probably perpetuated those problems,” Lysyk said.
Calling for a builder code of conduct, she said Tarion had failed to rigorously ensure homebuilders “operated ethically and with integrity.”
“Some builders had their licences renewed even after they demonstrated problematic behaviour and, in some cases, failed to reimburse Tarion for costs incurred to resolve defects,” she said.
The report found that in 65 per cent of cases between 2014 and 2018, builders failed to fix problems that should have been covered by the warranty.