Toronto’s condo construction boom

CBC News ran a story on October 13, 2014 entitled, “Fears that shoddy Toronto condos could become future slums“.  The piece outlines concerns that the Toronto condo construction boom of the last few years is resulting in numerous poorly constructed condo buildings that will require major repairs prematurely.Highrise

Having practiced construction law in Vancouver in the early-to-mid 2000s, I see a worrisome number of parallels between the development of the “leaky condo crisis” in BC beginning in the mid-to-late 1990s and what seems to be unfolding in Toronto. There are a lot of different theories about what gave rise to BC’s leaky condos but some of the more (I think) accepted factors amongst those “in the know” are: a building boom leading to rapid, “slap it together” construction, climate inappropriate designs, inadequate building code requirements, and a weak/flawed inspection regime. Of concern, these seem to be the same general problems now being identified in Toronto.

Only time will tell whether the current fears about Toronto’s condominium construction market are real or overstated but this is certainly not a potential problem that should be ignored or prematurely dismissed. For those interested, I would suggest that the 1998 report “The Renewal of Trust in Residential Construction” authored by the “Commission of Inquiry into the Quality of Condominium Construction in British Columbia” is an interesting read for some background.

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Two recent Court Decisions affirming that the Ontario New Home Warranty Plan is for the protection of new home buyers

The courts in Ontario have held, on a number of occasions, that the Ontario New Home Warranties Plan Act (“ONHWPA”) is legislation established to protect and provide additional remedies to buyers of new homes.  These Decisions have normally arisen in the context of disputes between homeowners on one side and their builder and Tarion on the other.  Two interesting Decisions recently came down from the Ontario Court of Appeal that have, albeit in a completely different context, affirmed that the ONHWPA is remedial, consumer protection legislation. The first of these Decisions is Tarion Warranty Corporation v. Boros, 2011 ONCA 374 (CanLII) (leave to appeal to the Supreme Court of Canada refused) and the second is Tarion Warranty Corporation v. Kozy, 2011 ONCA 795 (CanLII).  In both cases, the issue before the Court of Appeal was whether the homebuilders were “builders” under the ONHWPA such that they were caught by the registration (and other) requirements of the legislation.

From a residential builder’s perspective, these cases are primarily of significance because there is now clear and strong authority that the ONHWPA can’t be circumvented or avoided by simply leaving a small portion of construction out of the contract for the buyer to complete.

From a homeowner’s perspective, there are two noteworthy things about these cases:

  1. I believe that this is the first time the Ontario Court of Appeal has so clearly and unequivocally affirmed that the ONHWPA is remedial consumer protection legislation and that it is to be interpreted broadly and liberally as such; and
  2. Under the circumstances of these cases, it appears to have been Tarion, not new homeowners, arguing for this purposive, broad, and liberal interpretation of the ONHWPA.

It will be very interesting to see what the courts do with this purposive, broad, and liberal interpretation of the ONHWPA (and Tarion’s corresponding purpose and obligations) when a good case comes along within which to test and question how Tarion assesses and handles homeowners’ claims regarding deficiencies and “unauthorized substitutions”.  Having read many, many License Appeal Tribunal and court Decisions, I’ve yet to see one that gives a comprehensive and satisfactory treatment on this important aspect of the warranty.