TARION: Buyers Beware of Illegally Built Homes

By Tarion

Thinking of buying a new home?  Make sure you don’t fall prey to an unlicensed builder.

Illegal building is a concern in every community throughout the province and can have a profound impact on homeowners, the local economy and the local building industry.

In Ontario, builders or vendors of new homes must be licensed by Tarion.  Before that licence is issued, prospective builders must undergo technical, financial and business competency analyses.  Your home - likely the largest financial transaction you will ever make – should be built by someone who has the necessary skills and business capabilities.

So far in 2013, the work of Tarion’s investigators has led to 32 convictions and more than $139,000 in fines being levied by Provincial Offences Courts.

“Buyers of illegally built homes are often left living in substandard conditions, virtually abandoned by the builder and lacking vital information about the warranty protection to which they’re entitled,” says Tarion CEO Howard Bogach.

Many Tarion investigations reveal components of a home that haven’t been built to meet the minimum requirement of the Ontario Building Code.  Bogach recalls a recent conviction where the home was built with an undersized and improperly installed HVAC system that wasn’t capable of adequately heating the home.  The water it used to distribute the heat was plumbed through the same lines as the drinking water – raising health and safety concerns.  Tarion was able to work with the homeowners to provide the warranty coverage that should have been in place from day one and was able to make sure the home was safe and livable.

You might want to consider that if a builder has failed to become licensed to build and sell new homes or hasn’t enrolled a new home, they may be less likely to follow other laws and statutes like Ontario’s Workplace Safety and Insurance Act and the Occupational Health and Safety Act (OHSA).

Ontario’s custom-built home market is very strong and that means Tarion’s enforcement group deals with custom homes more often than any other type of illegally built home.  Illegal builders who skirt the law may be more tempted to sidestep Workplace Safety Insurance Board requirements, which could leave homeowners open to potential liability in civil proceedings.

Liability under the OHSA can also be a concern.  Builders who aren’t active in overseeing the day-to-day construction of a house can leave home buyers pulling double duty to ensure that work is completed.  A Richmond Hill homeowner was fined $20,000 by the Ministry of Labour for a health and safety violation that led to the death of a carpenter working on his home.

The OHSA requires one person be designated as the constructor – the party with the greatest degree of control over the construction project.  In this case the judge found that the homeowner was overseeing the construction and became the constructor.  Home buyers should always ensure that their builder is licensed, responsible for overseeing work on-site and meeting safety requirements.

Before entering into any type of purchase agreement, visit Tarion’s Licensed Builder Directory at www.tarion.com and ensure that your builder is licensed to build in Ontario.  Don’t be swayed by builders who claim that they have a special exemption or that you don’t need a Tarion warranty because they offer their own.  Being licensed and providing a Tarion Warranty isn’t optional – it’s the law!