Tarion and the HCRA – The First Six Months
Author: Hannah Johnston, Summer Student Tarion Warranty Corporation (“Tarion”) was established in 1976 under the Ontario New Home Warranties Plan Act to administer the province’s home warranty program. Six months ago, Tarion’s structure and process were updated. The Home Construction Regulatory Authority (“HCRA”) launched on February 1, 2021. The HCRA is a separate regulator for new home builders and vendors, and Tarion will now focus solely on administering warranties and protections for the purchasers of new homes. Tarion transferred its authority over the registration and licencing of builders to the HCRA, under the New Home Construction Licencing Act. Builders and vendors in good standing with Tarion automatically had their Tarion registration numbers transferred to their HCRA licences. Recent Updates The changes that came into force on February 1, 2021 include a revised fee schedule, where a $145 plus HST “Regulatory Oversight Fee” will be charged by the HCRA along with the existing new home enrollment fees already charged by Tarion. Builders must also display their HCRA licence is more places than before and be licenced with the HCRA (instead of registered with Tarion) before enrolling any homes. Tarion continues to manage warranty claims, handle underwriting of vendors and builders, and conduct pre-possession risk-based inspections. The HCRA has taken over home buyer concerns about builder/vendor conduct and also manages the Ontario Builder Directory (“OBD”). Tarion remains involved at the beginning of the new-home process, and will still require that builders and vendors obtain a completed Qualification for Enrollment application before selling or beginning construction and will need to be issued the notice to proceed. One other notable difference is a change to the forms to be included with every Agreement of Purchase and Sale (“APS”) for a pre-construction or new home signed on or after February 1, 2021. Each APS must have the following:
- Residential condominium units (for standard and phased) must have the HCRA’s Information For Buyers of Pre-Construction Condominium Homes form attached at the front of each APS;
- all homes (freehold and condominium) must have the appropriate version of the new Addendum included; and
- all homes (freehold and condominium) must have the appropriate version of Tarion’s new Warranty Information Sheet attached to the Addendum.