Law Times

Law times • OctOber 29, 2012 Significant changes to new-home warranties introduced FOCUS H BY MARG. BRUINEMAN For Law Times administration of new-home war- ranties in Ontario. "The addendum changes will make it easier for homebuyers to view all purchase-price adjust- ments and more flexibility to change critical dates on the deliv- ery of their new home, omebuyers now have added protection with the introduction of sig- nificant changes to the protection in some circumstances if the builder doesn't finish the home on time. Aſter consultations and re- views, Tarion introduced two significant changes to its adden- dum forms in July. The forms are standard supplements to every new-home purchase agreement. The amendments provide for flex- ibility to change critical dates by mutual agreement. The rest of the addenda out- Schumacher, vice president and general counsel of the law depart- ment at Tarion Warranty Corp. "The changes to the major structural defect warranty pro- vide more clarity to the definition of a major structural defect and will help assure better builder ac- countability for their product." Tarion' homebuilders rights of buyers by administering the Ontario New Home Warran- ties Plan Act. The act outlines the warranty protection builders must provide to their customers. As the regulator and the orga- s role is to regulate and protect the " says Tim lines limitations on the nature of vendor early termination condi- tions; procedures for making a compensation claim for delay; and requirements to provide oc- cupancy permits on the date of closing or occupancy. The other change related to the addenda involves the dis- closure of purchase-price ad- justments in purchase agree- ments. A standard schedule in the addendum form requires disclosure of purchase-price ad- justments with the aim of better reflecting the bottom-line price. nization that registers homebuild- ers and vendors, Tarion enrolls new homes for warranty cover- age, investigates illegal building practices, and resolves warranty disputes. Tarion also works with the building industry to help edu- cate new-home buyers about their warranty rights and how they can maintain their protection. The intent is to force builders to defects in work and materials, is fit for habitation, is constructed according to the Ontario Building Code, and doesn't have any major structural problems. Buyers have s free from If the builder doesn't disclose a proposed adjustment, the buyer doesn't have to pay it. For Toronto lawyer and Tarion board member Bob Aaron, the changes were necessary. "Before the addendum, it was virtually impossible to figure out any time deadline in the builder agreements," says Aaron of Aaron & Aaron. "Each builder had its own terminology, so there were confusing timelines." The other set of changes Tarion introduced focused on the seven- year warranty for major struc- tural defects. Stakeholders had identified two areas that needed addressing: a lack of clarity about what the warranty covered and a concern that builders didn't have sufficient accountability. Aaron says the stakeholder 'Before the addendum, it was virtually impossible to figure out any time deadline in the builder agreements,' says Bob Aaron. consultations and reviews pin- pointed some areas of confusion and some overlaps. He points to elevator, heating, venting, and air-conditioning systems as ex- amples of where Tarion would overlap when it came to both builder warranties and annual maintenance contracts. "Under the prior MSD (major structural defect) scheme, there were circumstances in which builders could avoid responsibil- ity and indeed shiſt that responsi- bility to Tarion in connection with MSD claims which were revealed during years three to seven of the warranty, place laying out three separate tests for coverage: the structural failure test; the load-bearing function test; and the use test addressing a defect adversely af- fecting a "significant portion" of the home. Tarion also shiſted the li- A new definition is now in " says Schumacher. ability to the builders by making them accountable for their con- struction for seven years. It also intends to force builders to take more responsibility for construction practices and aſter- sales services. In addition, a coshare liabil- their ity arrangement is available for builders that don't want to take full responsibility. "The Tarion warranty program, PAGE 15 with minor exceptions, is the most comprehensive new-home war- ranty program in Canada," says Schumacher, who will speak at the Six-Minute Real Estate Lawyer seminar about the changes. LT POWERFUL GUIDANCE ON ALL ASPECTS OF COMMERCIAL LEASING be accountable for their product. The purpose of the new-home warranty is to ensure that buyers receive a home that' SHOPPING CENTRE LEASES, SECOND EDITION EDITOR-IN-CHIEF: HARVEY M. HABER, Q.C., LSM Shopping Centre Leases has been considered the definitive resource on the subject since 1976. The expanded second edition brings you powerful guidance today. PRACTICAL SOLUTIONS TO COMPLEX ISSUES Assessment values increase Continued from page 14 comparisons more difficult. "You don't see the same com- mon element in commercial/ industrial as in residential, Hughes. "It is more difficult to do and " says for most municipalities, the com- mercial/industrial is more im- portant because it gives more to the tax base. and industrial buildings, he adds, involve looking at what it would cost to build them or the income they would deliver. Back on the residential side, Assessments for commercial " AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.carswell.com some of MPAC's other findings include a higher average in- crease in residential properties at 18 per cent than waterfront areas that saw an average hike provincewide of 12 per cent over the four years. LT Carswell-28947_LT_June11_12.indd 1 www.lawtimesnews.com 12-05-31 3:12 PM Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. ORDER # 804477-65199 $202 $181.80 Hardcover approx. 1100 pages December 2008 978-0-88804-477-8 Take advantage of the expertise of Harvey Haber and 50 other top commercial leasing practitioners in Canada. This compendium of articles and precedents covers all aspects of commercial leasing including: Technology and telecommunications concerns Pandemic preparedness for building owners and managers Insurance for shopping centres Leasing aspects of the franchise relationship Transfers of lease, assigning, subletting, and change of control Operating costs and other additional rents in a commercial lease from a landlord's and tenant's perspective Agreements to lease, letters of intent, and term sheets Shopping Centre Leases, Second Edition includes numerous precedents to help you draft your own agreements and a Table of Cases to help you locate the decisions you need. SAVE 10%* * Offer valid until December 31, 2012. Not valid in conjunction with any other offer from Carswell. er valid until ecember 31, 2012. Not valid in conjunction with any other CANADA LAW BOOK®

• Cover