By: ANITA MURRAY, Ottawa Citizen
Tarion is a private corporation that protects the rights of new home buyers and regulates builders by administering the Ontario New Home Warranties Plan Act, which outlines what is covered under warranty protection in the province. It’s outgoing chairman of the board is Ottawa lawyer Chris Spiteri, who feels the organization has come a long way in the 10 years he has been on the board. Yet he concedes there is still work to be done to maximize Tarion’s role. He reflects on his time with the corporation.
Q: What changes have you seen in your 10 years on the board?
A: I came to the board with piss and vinegar, thinking it was a builder organization. If I had to hold a flag up and say, ‘What’s the best thing I’ve seen happen?’ it’s the governance changes, seeing the board become equally balanced. We now have a consumer advisory council, as well as an ombudsman. Coverage has jumped to $300,000 from $150,000 while keeping enrolment fees stable. Delayed closing provisions are now spelled out in sales agreements. We’ve shifted focus completely so that rather than working under an insurer model where we had to protect the fund, we’ve moved to this different model where it’s preserving the relationship, it’s building confidence in the home buying experience, making builders more accountable so that they’re in there to avoid Tarion getting involved. So this was a whole cultural change.
Q: What still needs to be done?
A: We need to increase the customer service standard. We do a consumer survey every year and there is an 85-per-cent satisfaction rate among new home buyers. We need to make that 15 per cent (who are not satisfied) significantly smaller. We work so hard now at first intervention and building the relationship between the home buyer and the builder so that, if there’s a problem, most of the time we don’t have to get involved because the relationship is strong enough that the builder will fix it. The builders don’t really want us getting involved. They’d prefer to just fix it.
Q: Board membership is limited to 10 years. You spent six years as vice-chair before being elected chair for your final year. What did you set out to accomplish in that year?
A: I had to choose my priorities: one was condo conversions and the other was illegal building because I felt they were the most achievable within a year and could have the most impact. The condo conversion issue was taken off the table early on because the government chose to pull back a bit so I emphasized illegal building. I drove the creation of the illegal building model and was really hoping it would be done and ready to go through in the summer but it’s still being looked at. It’s meant to stop these guys who are going around building houses for people and telling them they don’t need warranties and their deposit isn’t protected.
Q: Some argue that buyers are forced to pay the enrolment fees and cannot opt out, nor is there any other warranty option.
A: Tarion charges the builders, not the buyers, because it’s the builder’s warranty, but of course, they pass it on to the buyer. The benefit of being independent is it allows Tarion the flexibility of being able to respond quickly and make decisions, like building up the reserve fund without having to be driven by a profit margin. We don’t have to compete against other warranty providers. And you could say, ‘Well, isn’t (competing) a good thing because in competing against other warranty providers aren’t you going to drive costs low?’ Sure, but because other warranty providers are competing, where are they going to get the business? It means they, more than anyone, have to get in bed with the builders because they need their clients. We don’t.
Q: There’s currently a private member’s bill before the Ontario legislature that would, among other things, require government oversight. How do you feel about this?
A: Tarion’s an easy target; it’s a warranty provider and some people aren’t happy, so it can be infectious in that regard. We do have outside oversight because we’re always subject to the minister’s oversight — we have to report to the minister quarterly and annually. (This bill) is an easy sell and this is one of the reasons that the independence is so important because we’re not an arm and extension of government, which means we’re not driven by political agenda. But you can’t have it both ways. This model that we kind of fall under is a really good one. It allows for efficiency, it allows for better representation of individuals, keeps the government’s nose out of doing things. I’m a big believer in competition, but in this case, as a consumer protection organization, I’m not sure that competition by any means is the right answer. There’s a political motivation because it’s good press; it’s a response to a small handful of people who are relentless. There may be an issue, which we’ve recognized, and now we have to increase the consumer service standard. Achieving that is a matter of resetting the table, not kicking the legs off the table.
Edited for length and style