Beefed Up Protection - Oct 2, 2004

Warranty coverage rises to $150,000
Ottawa Citizen - Sheila Brady

Protection against faulty workmanship in Ontario's housing industry just got a lot better with a 50-percent increase in warranty coverage to a maximum of $150,000.

"The last time there was an increase in warranty coverage was in 1989 when protection doubled from $50,000 to $100,000," says Gregory Gee, president and CEO of Tarion, an agency charged with protecting consumers against faulty workmanship and financial problems in the new home industry.

"The increase is part of our overall modernization of the warranty program," says Gee, recruited from the insurance industry to overhaul the agency, often criticized as being outdated and weak.

"We also think it is very important to let consumers know they have adequate coverage," says Gee, who has introduced a new computer system, expanded call centres and unveiled a new image for the agency, formerly known as the Ontario New Home Warranty Program. Tarion has a double responsibility to ensure Ontario builders register all new houses, meet the Ontario Building Code and finish a house on time. Tarion also pays out claims when the builder is found at fault.

The maximum coverage of $150,000 exceeds the average claim of $3,000 in 2003 for unfinished or badly finished work and the highest claim was $16,000, says Gee. In total, Tarion paid $7.4 million in 2003 to home buyers and almost $10 million to condo buyers. The money comes from a fund generated by fees builders pay when starting a new home or condo.

Tarion has been hit with bigger claims, specifically in Eastern Ontario when a concrete supplier installed basements that started to crack and disintegrate because the mix was not correct. Two years ago, 100 homes north of Toronto built by 15 builders had faulty concrete basements and Tarion paid out $100,000 a house to lift the structure off the foundation, repair it and put it back on the foundation.

"You get these claims, but they are quite rare," says Gee. Increased warranty coverage, however, gives consumers peace of mind

"The coverage is an extra benefit of buying a new home - something you don't have when buying an older home," says Gee.

The agency has registered 1.2 million homes since being established in 1976.
visit www.tarion.com for information on your builder and coverage details.
© The Ottawa Citizen 2004