Tarion needs to require more standard-form agreements


Audrey Loeb Head Shot

Tarion Warranty Corp.’s recent efforts to provide more consumer information on the risks of pre-construction condominium purchases don’t go far enough, and the new home regulator should take an aggressive role in requiring more standard-form agreements, Toronto condominium lawyer Audrey Loeb tells The Globe and Mail.

As of Jan. 1, 2020, Tarion will require “any vendor selling pre-sale condominiums to include a two-page information sheet about the project that will assist buyers in appreciating the potential pitfalls in signing a contract to buy an unbuilt home from plans,” the Globe reports.

“The form will compel sellers to spell out early-termination conditions, any potential title restrictions on the proposed land, as well as expected completion dates and a disclosure about whether a building has obtained zoning approval,” the article continues.

Loeb, a partner with the Toronto office of Shibley Righton LLP, tells none of this will mean anything to the average condominium purchaser.

“Tarion created a late closing form to be attached to all agreements of purchase and sale for condominiums — it is 10 pages long. How does that help the consumer?” she says.

“It’s just more stuff for people to read,” Loeb tells the Globe. “The problems of cancellation are important to people, but it’s truly the tip of the iceberg of the issues that affect the buying public when it comes to condos.”

She tells the Globe that many agreements of purchase and sale together with the disclosure packages for condos are already 100-plus pages and are filled with “thickets of legalese that can lock buyers into such things as unspecified extra fees, options to extend the completion date” for years into the future, and contracts, which bind the future condominium corporation to unfair terms, many favouring the developer or associated companies.

The newspaper reports that so far this year, seven projects have been cancelled, representing more than 2,100 units.

“Cancellations are inevitable. … People should just understand the risks and be prepared to deal with that,” Tarion CEO Howard Bogach told the Globe.

“I am disturbed by the rights developers are allowed to retain and which can impact what a purchaser gets,” Loeb says. “I’ve been saying that Tarion has to take a more aggressive role in requiring more standard-form agreements” and the Government of Ontario needs to see the consumers’ side of things.

A report recently tabled by Ontario’s Auditor General Bonnie Lysyk says Tarion has failed thousands of new homebuyers by placing the interests of builders ahead of theirs, the CBC reports.

Lysyk found the agency, which also regulates the industry and is controlled by a board made up largely of developers, has until recently operated with very little oversight and was allowed to write its own rules.

“Lysyk found most of the public complaints about Tarion’s dispute resolution process were justified, and that the Ontario Home Builders Association ‘had disproportionate influence over Tarion’s decisions and operations,’” the article states.


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