Court Confirms Homeowners Lose Warranty Rights Upon Sale of House
A panel of three Divisional Court Judges have affirmed that when a homeowner sells their home, they lose their standing to maintain a Tarion warranty claim under the Ontario New Home Warranties Plan Act (the “Act”).
Ms. Blair took possession of her new condominium townhome in February, 2010. Thereafter she made a complaint to Tarion about insufficient heating in the home. Ultimately, Tarion ordered that duct modification work was required in all nine townhouse units in the complex.
Ms. Blair installed a gas fireplace in her home without Tarion’s approval (to address the heating issue) and claimed compensation for the cost of her $17,000 fireplace. Her claim was denied and Ms. Blair appealed the decision to the License Appeal Tribunal.
During the appeal process, Ms. Blair disclosed that she had since sold her home and indicated that as part of the agreement of purchase and sale she and the purchaser had entered into a collateral agreement whereby Ms. Blair sought to continue her claim against Tarion.
Tarion successfully brought a motion to have the appeal dismissed for lack of standing and Ms. Blair appealed to the Divisional Court.
The Divisional Court reaffirmed the principles set out in one of its previous decisions which held that only current owners, and not former owners, are entitled to pursue a warranty claim under the Act. The Divisional Court also ruled that the Act prohibits owners from contracting out of the provisions of the Act, and therefore any purported assignment of the warranty from the current owners back to Ms. Blair was void.
The decision may be of particular interest to individuals who wish (or need) to sell their home while a warranty claim is still in the process of being adjudicated. The Divisional Court sets out a number of mechanisms that may be validly used by vendors and purchasers to account for yet to be adjudicated warranty claims.
Understood that the warranty stays with the house. However, what would happen, if, a Tarion member builder, and Tarion themselves did nothing to rectify Ontario Building Code violations, which negated the issuance of the Final Occupancy Permit, for over 48 months,to legally inhabit the home? Then, whilst waiting those four years, for mandated warranty coverage, the homeowner can’t secure mortgage required house insurance, because of those OBC violations, and, technically, has no legal right to inhabit their own home. At that point, the bank says no insurance, we will foreclose. Tarion knew of the impending foreclosure, yet still did nothing to remedy. Once the home was lost to foreclosure. Tarion took the position that since the homeowner no longer owns the home, you file is closed. Strange, but true… that’s exactly what happened to me.
Very solid case cited above ….and will someone give us the answer ???? those are the types of ” extenuating ” circumstances no one ever writes about !!! we know all about these circumstances that make the ” written ” law lose its power but it does not appear that these circumstances are even ” listened to, considered and weighed ” by the courts / LAT , let alone taken into consideration into the final verdict !!!! Stranger than fiction and cannot happen you say ??? go investigate , media ……
…warranty insurance claims can only be made when a builder fails to meet the minimum standards of the building code, which happens far too frequently. Many building code violations are also life safety issues, so if the main purpose of the legislation is homeowner protection, then this judgment missed the boat!
If a home was bought by a corporation and the Title shows the corporation as the owner, does the corporation receive the same warranty insurance coverage as an individual? If the corporation (and home) is then sold does it require a change to the Title?