A new home has always been one of life’s biggest purchases.
Today, with increasingly competitive housing markets and costs of construction on the rise, a new home commands an even larger proportion of a person’s household income. As prices increase, so too do expectations.
Meeting those expectations isn’t always easy – and everyone involved in the new home building industry has a role to play, including municipalities, government inspection entities, associations, builders, trades and, of course, Tarion.
Recently, the Ontario government announced changes to the New Home Warranty Program with the goal of enhancing consumer protection. Notably, a significant change involves the creation of a separate regulator to oversee the province’s more than 5,500 new home builders and vendors. We understand how consumers may benefit from this change and are committed to supporting the government in the implementation of this plan. In addition, Tarion will be enhancing the information available to new home buyers through the Ontario Builder Directory and supporting the government’s review of a multi-provider insurance model for new home warranties.
These changes are just the latest in the continuing evolution of consumer protection – a process that Tarion has been supporting, together with our industry and government partners, for 43 years. We’re proud of the progress that has been made to help ensure consumers receive quality built homes, backed by excellent customer service and a warranty they can rely on.
We continue to work to ensure that consumers can have confidence their builder will deliver on what they promise.
One ongoing challenge is that some homes in Ontario are sold by builders not registered with the New Home Warranty Program when they should be. Illegal building can put consumers at risk and can undermine confidence in the new home building industry as a whole. We work hard to address this problem. In 2018, based on leads from the public, Tarion’s Compliance and Investigations team conducted 74 investigations and obtained 108 convictions in provincial courts. Increased fines that took effect January 1 now allow the courts to levy harsher penalties, with individuals being subject to fines up to $50,000 and corporations up to $250,000. Over the past year, Tarion paid out $4 million in claims for illegally built homes.
However, prosecution is only one tool for combatting illegal building. We are in the process of adopting a broader compliance-based approach to builder conduct and illegal building issues, which is showing some early success in addressing homeowner concerns and enhancing consumer protection for purchasers.
But confidence involves more than coverage – it also means knowing that help is available when you need it. In 2018, Tarion paid claims on 805 homes, but this number is only a fraction of the number of homeowners that our staff worked with to resolve their concerns. In the majority of cases, warranty issues are resolved promptly by the builder or through Tarion’s various dispute resolution channels. Over the past year, we continued to implement improvements to help homeowners and builders work through the claims process and overcome any communication obstacles and disputes that come up along the way. We’re proud to say our early intervention and mediation services have been successful in facilitating positive outcomes, and we have expanded the number of staff trained to be able to provide these services. In the coming year, we will be looking at how we can engage more homeowners and builders with the goal of resolving issues earlier in the process.
2018 also saw the expansion of technology solutions to enhance our customer service in the future – for example, our virtual inspections pilot makes it possible for homeowners to use an app to show our Warranty Services staff potential warranty issues in their homes without requiring an onsite inspection. We’ve also implemented artificial intelligence tools to allow us to serve customers 24/7 and better predict the types of claims that may result in challenging situations.
With an average of 62,500 warranty forms submitted each year, Tarion is able to offer unique insights to help builders identify trends in homeowner-reported issues in the construction and finishing of homes. Leveraging warranty form data for the past five years, Tarion has piloted new provincial and builder-specific reports detailing the most commonly reported issues and how they were resolved through the warranty claims process. This quantitative and qualitative feedback gives builders the opportunity to flag and potentially remediate problem areas earlier in the construction process to increase customer satisfaction and reduce potential claims.
Data mining and artificial intelligence is allowing us to be more efficient, effective and accessible – but customer service still comes down to people helping people.
Every week, we receive glowing comments from both homeowners and builders who appreciate our staff’s expertise, patience and professionalism. This feedback confirms the positive impact staff have on homeowners and builders day in and day out, and it reinforces the important role that we play in the new home building industry. Our 2018 homeowner surveys confirmed that the improvements we’ve been making are increasing satisfaction – in fact, our Service Orientation Index (one of Tarion’s key performance indicators used to measure consumer satisfaction) was the highest it’s been since 2012.
Tarion continues to evolve and we remain committed to assisting the government in the implementation of its vision for the New Home Warranty Program. We would like to thank Tarion’s staff, management and Board of Directors not only for their hard work but for their enthusiasm in embracing change. Building confidence is about working with all our stakeholders in establishing trust and meeting – and exceeding – expectations throughout the home buying and ownership journey.
Howard Bogach, President & CEO
Paul Golini Jr., Chair of the Board