The Condo Guide - Regulating Builder & Vendor Practices
Since the Canadian government stepped in to regulate the housing market back in 2017 via the Fair Housing Act, there have been increasing mandates by the provincial government to protect buyer clients. Around the same time in 2017, the New Home Construction Licensing Act was established, which regulated licensing for builders and vendors in the province.
There have been hundreds of preconstruction developments since then, so it seems only natural that there would be regulations among them. However, it was not as such. There was no authoritative body responsible for enforcing these regulations. Only Tarion, the warranty provider for all New Construction builds, had followed up in the past when handling deficiencies and customer claims when buyers have purchased pre construction builds.
It was clear that consumers of the province have been unhappy, as last year in 2020, amidst the global pandemic, the Ontario Government passed the Rebuilding Consumer Confidence Act (2020). This act aims to reduce defects in new home warranty and protection claims, and better protects buyers from arising issues in the marketplace, especially in regards to newly built homes.
In addition to rebuilding consumer confidence, it was evident that consumers felt as if they didn’t have enough information. The Ontario’s Residential Condominium Buyers’ Guide (informally known as the Condo Guide) was developed in 1998 and updated every year since, has been available on the Condominium Authority of Ontario (CAO) website. However, it has not been utilized to its full potential in the marketplace. The Condo Guide provides all the information you would need to purchase a new build in Ontario, and provides specific details to a pre construction property. The Ontario Government realized the importance of providing this information, and as of January 1, 2021, section 72 (1) of the Condominium Act, 1998 (the Condo Act) will require that declarants provide the Condo Guide to buyers of residential pre-construction/new condo units.
Furthermore, on February 1st, 2021, the Ontario government established the Home Construction Regulatory Authority (HCRA) to enhance the professionalism of the new home building industry in Ontario and to increase consumer protection. But what does that exactly mean?
The HCRA is a separate regulatory authority, established to oversee new home builders and condo developers, and designated under the New Home Construction Licensing Act, 2017. The creation of the HCRA as a separate authority can directly address consumer concerns about potential conflicts of interest within Tarion, or the builder. This will help ensure that new home builders and developers are monitored and that owners of new homes feel well-informed, and confident of the quality of which their homes were built.
Now, when you purchase a pre construction property in Ontario, you will now not only be provided with The Condo Guide, but should also feel more informed about the process. In combination with Tarion and the HCRA, these new provincial regulations will provide more robust consumer protection for all Ontarians.
