Normally, there are very strict timelines regarding the filing of warranty claims with Tarion. However, due to the current pandemic, the Ontario government has passed several new laws and regulations that suspend certain timelines.
In the Agreement of Purchase and Sale for a new home, the builder must provide a Statement of Critical Dates with the estimated closing dates for the completion of the home. Typically, if the final critical closing date is not met, then the builder could be subject to pay delay costs to the homeowner.
However, the emergency orders and new health and safety standards have resulted in construction delays. The pandemic has also caused disruptions in the manufacturing and distribution of building materials (particularly lumber), hardware, appliances and equipment required for new home construction. There may be additional shortages in building materials, hardware, appliances and equipment in the future. In light of these shortages and delays, Tarion has provided a mechanism for builders to advise homeowners of delays in the completion of their home.
Extension of Critical Dates
The builder may unilaterally extend the critical dates and avoid the delay penalties from Tarion if the following steps are followed.
To extend the critical dates, the builder must send two notices to the homeowner. The first notice must be sent before the critical date listed in the Agreement of Purchase and Sale, or within 20 days of reasonably learning that there will be a delay. The builder must reasonable estimate the construction (direct impact) and remobilization delays caused by the pandemic. However, if the delay is due to the COVID-19 pandemic, the notice can specify that the estimate delay is unknown when the first notice is sent.
The second notice is to be sent once the builder is able to calculate the reasonable estimate of the construction (direct impact) and remobilization delays caused by the pandemic. The second notice will specify the total length of the delay and the new critical dates.
It is important to be clear whether the notices constitute a first or second notice. Builders should send out regular updates on the status of the homes, but should distinguish between informal updates and formal notices. The formal notices may only be sent once, so it is important to properly and accurately estimate the delays before sending the second notice.
A builder cannot extend the critical dates if the pandemic did not affect the construction of the home.
In the alternative, the builder and homeowner may enter into a mutual agreement that complies with section 4 of the Tarion Addendum to extend the critical dates.
The extension of closing dates are governed by the Agreement of Purchase and Sale, and must be negotiated directly between the builder and homeowner (and/or their lawyers). The procedure outlined above only extends the critical dates for completion of construction.
A homeowner is not required to partake in a pre-delivery inspection right now, though it is still recommended that they do so. Builders can complete the pre-delivery inspection, take photographs and give the inspection report to the homeowner. When the homeowner gets possession of the unit/home, they can add to the pre-delivery inspection report if required and return the inspection report to the builder.
Repair Periods and Warranty Work
Between March 16 and August 27, 2020, homeowners were not currently required to allow access to a builder to do warranty work. Such refusal was not considered denied access. As a result, the builder repair periods were suspended during that time.
As of August 27, 2020, the repair periods have resumed for all outstanding warranty items.
Warranty Forms and Conciliations
The requirement to file the various warranty forms (30-day form, Year-End, Second-Year, Major Structural Defects, delayed closing, performance audits, financial loss and deposit claims) within the prescribed period was suspended from March 16, 2020 to September 11, 2020. The warranty period itself was not suspended, just the deadline to file the form. Homeowners with warranty claim submissions or requests for conciliation due between March 16 and September 11, 2020 have until September 11, 2020 to submit warranty forms or requests for conciliation. Postponed conciliations and inspections will be rescheduled by Tarion at the earliest possible date.
Since March 16, 2020, all conciliation fees have been waived and will continue to be waived until the end of the year.
All forms due after September 11, 2020 should be submitted on-time according to their due date.
Tarion started scheduling in-person inspections as of July 13, 2020. Prior to the inspection, the Tarion inspector, homeowner and anyone else that may be present in the home at the time of the inspection will be asked to complete a pre-screening health questionnaire. If a homeowner is not comfortable providing access to the home for the inspection while the Emergency Order is still in place, Tarion will work with them to determine possible options, including virtual inspections, desk assessments or postponing to a future date.
First, to minimize in-person interactions, the Warranty Services Representative assigned to the file will be conducting a ‘Table Talk call’ or Common Element Meeting with the owner and builder prior to the in-person inspection/meeting to discuss the warranty, report writing process, next steps, and appeal rights.
Depending on the warrantable item(s) at issue, Tarion may schedule a virtual inspection instead of an in-person inspection.