Ontario’s new home warranty provider wants to crack down on unregistered builders in Hamilton’s hot housing market.
Housing prices are up eight per cent since 2010, according to a report by TD Economics, as more and more buyers choose new homes in Hamilton’s tight real estate market.
But Tarion, the corporation created by the province to protect Ontario’s new home buyers, is warning purchasers to watch out for bogus builders hoping to bilk consumers.
Last year Tarion laid 227 charges against unregistered builders province-wide, which led to 83 convictions and over $250,000 in fines. In March of this year, Ancaster-based Roger Singh, of Rocket Homes and Property Management, was convicted of being an unregistered builder and fined $25,000 by Tarion. Singh vowed to appeal the charges in an interview with Hamilton Community News earlier this year.
Top Tarion officials visited Hamilton July 23 for a media tour of an east Mountain housing development.
Howard Bogach, Tarion’s president and CEO, said numerous investigations into unregistered builders are currently pending across the province.
Vince Molinaro, Ontario Homebuilders Association first vice-president, said unregistered builders are affecting all segments of the industry, including multi-million dollar lakefront homes in Burlington.
“We see the same people going from house to house. These people know what they’re doing,” he said.
Tarion can provide home buyers with a list of red flags to avoid purchasing an unwarrantied home. Bogach said unscrupulous builders may tell buyers to skip the warranty because the builder will offer its own, or misinform buyers that a Tarion warranty will cost over $10,000 when in fact the fee ranges from $385 to $1,500. Builders may also fraudulently sell homes as “builder-occupied” units, exempting them from the Tarion regulations.
Anyone who suspects illegal building is taking place is asked to call Tarion’s anonymous tip line at 1-800-786-6497. Tarion’s website includes a directory of licensed builders and a list of builders who have had licences revoked. Licensed builders are also subjected to a written test on Ontario building code and other background checks.
“When a builder chooses to build and not be registered, the only person who’s compromised at the end of the day is the home buyer,” said Tarion board chair Christopher Spiteri.
It’s not known how many unregistered builders may be operating in Ontario. But Bogach compared the figure to the number of drivers speeding on Highway 401.
Siloni Waraich, Tarion’s director of stakeholder relations, said the firm has delivered a proposal to the province to amend provincial legislation that would make Tarion the gatekeeper to determine who is an owner-builder.
“They would all have to receive a legitimate pass from us saying ‘yes, they are building it for themselves and are planning on living in it’,” she explained.
Tarion would also be involved at the municipal building permit level, Waraich said.
“If that piece comes together, that’s huge,” said Spiteri.
The changes will require stakeholder meetings before any legislation is drafted by the province.
The July 23 media tour was hosted by Brandon Campbell, vice-president of Starward Homes, at a model home in the Country Ridge Estates development on Twenty Road East. Starward is building 67 of the subdivision’s 119 two-storey single detached homes and bungalows.