Licence Appeal Tribunal

DATE: 2010-07-23

FILE: 5793ONHWPA

CASE NAME: 5793 v. Tarion Warranty Corporation

An Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act – to Disallow a Claim

Applicants: 5793

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Respondent: Tarion Warranty Corporation

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Added Party: Thickson Building Corp. (Riverfield)

REASONS FOR DECISION AND ORDER

ADJUDICATOR: JANE WEARY, Vice-Chair

APPEARANCES:

For the Applicants: THE APPLICANT, representing himself and the female Applicant

For the Respondent: ELLIE CHOI, Counsel, representing Tarion Warranty Corporation

For the Added Party: JOE DI MEO, Agent, representing Thickson Building Corp. (Riverfield), the Added Party

Heard in Toronto: June 14, 15 and 18, 2010

REASONS FOR DECISION AND ORDER BACKGROUND

This is an appeal brought by the Applicants from a decision of Tarion Warranty Corporation (the “Respondent” or “Tarion”) set out in a Decision Letter dated November 17, 2009 (the “Decision Letter”), denying the Applicants’ first year warranty claims.

Tarion is the corporation that administers the Ontario New Home Warranties Plan Act (the “Act”). Through prescribed processes, Tarion investigates, conciliates, and, where necessary, provides compensation to a homeowner for breaches of the Act’s construction warranties by the builder.

The Applicants took possession of their new home from Thickson Building Corp. (Riverfield) (the “Added Party” or the “Builder”) in April 2008. While they complained of numerous warranty deficiencies, their appeal is limited to eight warranty claims denied by Tarion.

ISSUES

The Applicants claim that the following items should receive the warranty protection offered by the Act and dispute the reasons provided by Tarion for its decision to deny them such coverage as set out in its Decision Letter:

1. cracks in exterior door frames: (a) garage door (Item #13 Decision Letter) (b) front door (Item #20 Decision Letter)
2. staircase – side veneer cracking (Item #31 Decision Letter)
3. basement landing/stairs (Item #32 Decision Letter)
4. kitchen ceiling/master ensuite leak (Items #35 and #54 Decision Letter)
5. upper hallway east wall not straight (Item #44 Decision Letter)
6. basement window missing (Item #72 Decision Letter)
7. foyer transom window missing (Item #74 Decision Letter)
8. kitchen tiles uneven (Item #77 Decision Letter)

The issue for the Tribunal to determine is whether the evidence establishes that all, or any, of these claims are/is in fact warranted under the Act and, if so, to what damages are the Applicants therefore entitled.

EVIDENCE

The Applicant testified that he and his wife had submitted their first year claim in April 2009. Tarion responded with a conciliation inspection in October 2009. Its consequent Warranty Assessment Report (Exhibit #4, “Tarion Reports”) concluded that the items in dispute were not breaches of the Builder’s warranty obligations as set out in the Act.

One year earlier, in November 2008, Tarion had performed a 30-Day Claim inspection of the Applicants’ alleged breaches concluding that a significant number of items were warranted. Some, the Builder had repaired within the timeframe provided to it. In other instances, the warranted claims resulted in a Settlement Agreement whereby the Applicants were paid a specific sum of money - based on estimated repair costs for each warranted item - on the basis of waiving any further rights to make claims for the specified items (Exhibit #4, Settlement Agreement of March 6, 2009; see also Exhibit #10(a), Tab 5).

1. Cracks in door frames (Items #13 and #20)

The Applicant acknowledged that exterior frame/trim damage on both the exterior front door and garage doors had been part of his 30-Day Claim, as had the exterior paint on the garage doors (Items #146 and #164 on the 30-Day Claim Form).

He further acknowledged that both were warranted by Tarion. Since the Builder failed to correct these deficiencies within the repair period provided under the Act, the repair of these areas and primer and paint funding were included in the March 2009 Settlement Agreement (Items #55 and #58 – Exhibit #10(a), Tab 5).

It was the Applicant’s evidence that a short time after signing the Settlement Agreement and before receiving the settlement funds, he telephoned Tarion to advise that he had now noted cracking in both trim/frame areas. Mr. Conte, Tarion’s Field Claim Representative responsible for the Applicants’ home, advised the Applicant to include the additional concern on the Year-End Claim Form and cautioned that any work performed on the area in the interim might void future warranty coverage. Such advice was consistent with Articles 14.15 (concerning exterior railings) and 9.12 (concerning peeling wall coverings) of the Construction Performance Guidelines (“CPG”) published by Tarion for homeowner guidance, which warns against homeowner alterations or repairs as potentially voiding further warranty coverage.

Given such advice, the Applicants did not perform the repairs to either door frame areas as specified in the Settlement Agreement. They also included cracking damage to both door frames on their Year-End Claim Form, filed with Tarion one month later on April 16, 2009 (Items #13 and #20).

A new Field Claim Representative, Sedin Heric, attended to inspect Year-End claims in October 2009. Mr. Heric denied both claims based on his conclusion that these areas had already been subject to warranty remedy in the form of the Settlement Agreement, which included priming and painting, neither of which had occurred, resulting in a further protracted period of unprotected weathering, which he concluded had contributed to the cracks.

The Applicants allege that the additional cracking is caused by the originally warranted insufficient primer/paint workmanship of the Builder and should therefore be warranted. Photographs taken by the Applicant at the Year-End inspection demonstrate painted frame surfaces of both areas. The garage trim demonstrates nail dents as well as a vertical crack running some inches from the bottom of the frame; the exterior trim demonstrates some cracks of an inch or so from the bottom of the trim.

The Applicant provided cost estimates for the crack damages from Colin Shaw Contracting Inc., dated June 13, 2010 – Exhibit #10(b). The Applicant was unable to comment on the contractor’s experience, skills or credentials. The estimate quoted replacement of the front door frames as a consequence of them being one manufactured piece, at a cost of $2,300.00. The cost quoted for removal and replacement of one garage door frame was $850.00.

Mr. Conte testified that he has worked for Tarion for over four years as a Field Claim Representative, and is responsible for inspecting consumer warranty claims against new home builders, attempting to conciliate disputes concerning such claims, and deciding when such claims are legitimate.

Prior to his employment with Tarion, he worked in construction for almost 20 years, during over twelve of which he owned his own general contracting company, building new homes and renovating others. As part of his training with Tarion, he completed a course in repair estimation and another course on the relevant provisions of the Ontario Building Code (“OBC”). He also holds a three year diploma in Construction Engineering Technology from George Brown College.

Mr. Conte advised that he conducted the 30-Day inspection, which involved over 100 claim items, and of which he determined a “high percentage” were warranted.

Of these warranted items, he recalled that the frame/trim on both the garage door area as well as the front door area, demonstrated inadequate finishing and nail holes and hammer dents. The resulting Settlement Agreement, signed by the Applicants, specified a sum of $534.66 for detailed work which was to be performed to these areas, including wood fill for areas of wood gaps/damage and primer and paint over top as both aesthetic and protective measures (Exhibit #10(a), Tab 5, Items #55 and #58). Mr. Conte noted that such would be spot work as the doors and frames/trim in both cases had been originally painted by the Builder. The primer and paint function is required to protect exterior wood work from the elements, and wear and tear caused by such exposure.

Given natural weathering/shrinkage, Mr. Conte testified that typically Tarion denies warranty coverage for such wear areas, as exterior wood chips and cracks by Year-End Claim inspections.

Mr. Conte denied any recollection of the Applicant having called post-signing of the Settlement Agreement, in order to claim additional cracks and concerns. He stated that had that occurred, the natural and usual response would be for Tarion to request the homeowner to provide estimates for the additional work required. He had no record of any such request or conversation. Mr. Conte further stated that, should a homeowner call in after a Settlement Agreement has been drafted, as the Applicant claimed he had, it is a simple matter to retract and amend the Settlement Agreement.

Finally, it was Mr. Conte’s position that wood cracks, as demonstrated in the Applicants’ photographic evidence, could easily be repaired in accordance with the settlement monies and processes already agreed to. Replacement of the trim or the framing, as requested by the Applicant, was not necessary.

Mr. Sedin Heric has been a Tarion Field Claim Representative for close to two years. His prior employment includes four years in residential home renovation/restoration and as a project designer in construction. He, too, has completed a George Brown College Diploma as an Architectural Technician, and a Tarion certification course in Part IX of the OBC, dealing with residential home construction as well as cost estimation.

Mr. Heric had been assigned to complete the Applicants’ Year-End warranty inspection. He provided photographs of the door frames taken by him at the time (October 2009)¹, some six months after the Settlement Agreement. Mr. Heric testified that the cracks he observed were “give or take” 1mm wide and 10cm long. He would not usually warrant such minimal sized cracks at a Year-End inspection, due to natural causes of weathering. He would, however, warrant the inadequate paint and nail holes, but had not done so here as these areas had been warranted previously, and formed part of the earlier Settlement Agreement payout to the homeowners.

In cross-examination, Mr. Heric did not agree that the cracking of the garage door trim, as demonstrated in his photograph, was of a different door than that demonstrated in the Applicants’ photograph evidence. Mr. Heric advised that his photographs were of areas pointed out as subject to claim by the homeowner at the time of the inspection.

The Builder’s representative, Joe Di Meo, has held the position of Construction Manager for the Builder for ten years. Before that, he had been in the construction business for five years as a builder of new homes with his father. He was responsible for overseeing the construction of this home and dealing with arising customer service issues.

Mr. Di Meo testified that he had been surprised when the door trim/frames had reappeared in the Applicants’ Year-End Claim in April 2009. The paint provided by the Builder had already been assessed as inadequate, and the nail holes and damage had been found warranted in November 2008, following the 30-Day Claim. Repairs undertaken by the Builder in response to that claim had taken longer than anticipated. Since these two areas were left to the end (as paint jobs were the last to be performed), they remained incomplete as of December 15, 2008, the expiry date of the 30-day repair period. Given that the Applicants refused to provide the Builder with an extension to the repair period, these two areas had been part of the consequent Settlement Agreement, which was signed in March 2009.

Mr. Di Meo noted that the Applicants had refused the Builder access to complete the repairs, following the Applicants being advised that any repairs not completed by the Builder would be subject to a monetary payout by Tarion.

While the Applicant consented to the Builder performing any repairs, which the Tribunal might determine warranted, the Builder also gave evidence that its repair costs for replacing the two door frames would be approximately $450.00.

2. Staircase – side veneer cracking (Item #31)

Numerous items of complaint on the homeowners’ 30-Day Form dealt with the condition of the stairs – all of which were warranted by Mr. Conte (see Exhibit #4, 30-Day Warranty Assessment Report, Items #57 – #64).

Although the evidence established that the Builder’s subcontractor, Alpa Stairs and Railings Inc., did perform re-veneering sometime at the end of November 2008, and, despite the Applicant having signed off that the work was completed on December 12, 2008 (Exhibit #13(b)), numerous other items concerning the stairs remained outstanding at the completion of the builder repair period. These items were thus part of the Settlement Agreement, which specifies removing and replacing the oak trim at the stringer from the stair to the wall and providing two coats of stain and varnish for a total payout of $1,316.32.

The Applicants’ concerns were raised when, following signing the Settlement and Release in March 2009, they became aware that the side veneer was not properly glued down. The Applicant claimed that he immediately advised Mr. Conte of his new concern, before receiving the Settlement Agreement funds, and also provided Mr. Conte with the contractor quote he had received for the repair of the veneer at $850.00, which he also undertook to provide to the Tribunal². Again, it was his evidence that Mr. Conte told him to add the complaint to the Year-End Claim and confirmed that Mr. Conte warned him that work he undertook beforehand might compromise that claim.

The condition was apparent in the DVD video evidence filmed by the Applicant preceding the Tribunal Pre-Hearing in March of 2010. The Applicant testified that he had been present when the Builder’s contractor installed this replacement veneer in late 2008, and had questioned then why there was no smell of glue. The contractor informed him it was a new product. The Applicant claimed that the premature failure of the adhesive indicated the non-workmanlike quality of the product or labour, and was warrantable given the Builder’s warranty of one year post-repair.

While he acknowledged that varnishing the area, as specified in the Settlement Agreement, would assist in protecting the wood product from wear, the Applicant disputed such protection would have prevented the failure of the glue to adhere. Again, the Applicant had not done the repairs specified in the Settlement Agreement due to his belief that doing so would negate any future warranty coverage, which he believed the new evidence of detached veneer established.

In cross-examination, the Applicant maintained his position that, by the Spring of this year, he and his wife had told the Builder that access to the home would be allowed to its trades to photograph the new complaints for the purposes of the hearing process, but the Applicants would not allow further repairs, as the Tribunal process had commenced, nor would access to the home be provided to either the Builder or Mr. Di Meo, given past hostility between them.

Mr. Conte testified that there had been no claim of damage to the veneer at the time of his 30-Day inspection in the Fall of 2008. He had closely examined the stairs in every way, given the numerous complaints and consequent warranted conclusions, but at no time could he recollect any cracks or displacement in the veneer.

The Settlement Agreement funds allocated ($8,106.00) were calculated based on the Applicants’ own hardwood specialist estimate of $8,106.00, as well as Mr. Conte’s estimate of $7,900.00. The Settlement Agreement was generated based on allocations made for the number of warranted claims, which culminated in the final settlement amount. The hardwood/stair deficiencies were therefore all included, but no reference was made to any allegation of veneer lift or cracking at that time.

It was Mr. Conte’s position that the cracks in the veneer, as observed by Mr. Heric and demonstrated in his photos, could be spot repaired or spot replaced and did not require removal and replacement of the veneer. He speculated that the lifting of glue might be attributable to the Applicants’ failure to repair the warranted deficiencies as set out in the Settlement Agreement.

In cross-examination, Mr. Conte acknowledged that aesthetics claims are warrantable where workmanship is clearly deficient from a normal viewing perspective. He admitted that the veneer was readily visible and its stain should ideally properly match any staining of the treads. He also acknowledged that the veneer could not be re-glued in parts, but would need to be adhered as one entire piece at an approximate cost of $750.00.

This estimate is close to the original amount of $693.00 charged to the Builder by its subcontractor for replacing the veneer in November 2008 – Exhibit 13(b). The amount does not include varnish and staining, which the Applicant acknowledges is not being claimed, given that the Settlement Agreement specifically provided funds for that purpose.

Mr. Heric testified he concluded that the cracks in the veneer pointed out to him by the Applicant during the Year-End inspection in the Fall of 2009 were minor, and not apparent from a “normal viewing perspective”. At that time, some eighteen months post initial possession, there was no complaint of a failure of the veneer adhesive or any evidence of such. He only observed one or two such cracks at the bottom of the veneer stringer (see photographs at Exhibit #5, Tab 15 - pages 7, 8 and 9). He described these as “slight” and noted that the stair stringer remained unfinished, contrary to the Settlement Agreement. He advised that such cracking is not unusual where wood material is not properly finished. He concluded that the cracks could therefore be as easily attributable to the Applicant’s decision not to complete the repairs envisioned in the Settlement Agreement, thereby leaving the state of the wood veneer unfinished, and hence vulnerable to humidity, as to any Builder failure.

He therefore denied the Year-End Claim.

3. Basement landing/stairs (Item #32)

The Applicant testified that his original complaint on the 30-Day Claim of improper finishing to this item had been warranted. The appropriate Builder repairs were not performed by the repair deadline, and costs for the work required had been included in the Settlement Agreement of March 2009³. The complaint concerned a nosing which the Builder had replaced, but had done so poorly such that, viewed from the basement, there appeared to be gaps on either side. The Applicant relied on his video evidence, which demonstrated a rough and poorly finished construction of the nosing area on the basement landing.

The homeowner requested that the nosing be removed and replaced properly, after which the stain and varnish repairs provided in the Settlement Agreement could properly be undertaken. The Colin Shaw Contracting Inc. estimate for the cost of the replacement of the nosing was $250.00. The Builder’s response was that it could be done for $120.00 (Exhibit #13(a)).

Mr. Conte acknowledged that he had warranted the original nosing claim, as there had been insufficient varnish applied by the Builder initially. When he returned to inspect the resulting Builder repairs, he agreed that this area had not been repaired, and hence, it was included in the Settlement Agreement. In cross-examination, he explained that, as the nosing is also part of the landing, it was a warrantable item given that it is viewed from the finished area of the home.

Tarion denied the Applicants’ Year-End Claim of improper repair. This denial was based on Mr. Heric’s conclusion that the repairs performed to the area of the nosing, readily visible from the landing, were proper and sufficient. The complaint of the Applicants concerned the repair finishes to the basement perspective of the landing area. As an unfinished area of the home, the basement view is not a valid basis for determining whether a construction unit is so aesthetically displeasing so as to afford warranty protection. It was Mr. Heric’s evidence that this angle of the home is only covered by the Act’s warranty provisions where functionality is impacted.

The Builder did not give evidence on this item, other than its notations on the Colin Shaw Contracting Inc. estimate.

4. Kitchen ceiling/master ensuite leak (Items #35 and #54)

The Applicant advised that there had been issues with the kitchen ceiling since he and his wife had first taken possession. He claimed that the Builder had attended numerous times, perhaps a total of four separate visits, to re-plaster the ceiling prior to their Year-End in March 2009.

The Applicant believed that the repeated need for re-plastering and re-painting was caused by a leak in the master ensuite directly above the ceiling area in question. He complained that the Builder had never opened up the area to confirm this suspicion. He stated that the Applicants had not done so, for fear such would be used against him by Tarion to deny their claim.

The Applicants’ home inspector had reviewed this area in his March 2009 inspection, and took thermal imaging photographs, which demonstrated slightly elevated moisture areas (12% versus 8% of surrounding area), and of which he opined might suggest a “possible leak”. The inspector was not called as a witness and the Applicant admitted that he had refused to allow the Builder to cut a hole in order to determine whether there was any leak, as he did not want to have to pay for restoration, should no leak be found.

The Applicant further agreed that he had no independent witness to verify his allegation that the ceiling area in question was “mushy”, and acknowledged that his photos did not show any damage.

Mr. Conte’s evidence on this issue was that the complaint he had reviewed at the 30-Day inspection of November 2008, concerned the Applicants’ claim that the ceiling paint touch-up provided after the Builder repair, to two separate areas of the kitchen, did not match the original paint colour. At no time was he asked by the Applicants to touch the area(s), nor was he informed that there was a leak or possible issue of moisture. Their claim was deemed warranted, and, again, due to the painter not performing the necessary repair, was included in the settlement funds advanced to the Applicants pursuant to the Settlement Agreement⁴ (for paint touch-ups on both areas) at a cost of $241.13.

Mr. Heric’s inspection of the following October included the Applicants’ claim of a possible bathroom leak into the kitchen area. The Applicants had provided their inspector’s thermal image photograph of the area, which Mr. Heric believed was consistent with the location of drain pipes and could simply be indicative of normal plumbing. The Applicants told him that the last ceiling repair had occurred the previous summer. Mr. Heric noted no staining or discolouration, which would be a natural result of a leak occurring over a number of months (summer through to October). He denied the warranty claim, as there was no evidence of any leak.

Mr. Heric testified that, were there in fact a leak, then the ensuing months since last October would demonstrate some damage/discolouration, none of which had been presented by the Applicant, despite his reliance on DVD video and other photographic documents to support his allegations of Builder deficiencies.

Mr. Di Meo testified that he had not heard of any allegation of a leak until the Year-End Claim of April 2009. The Builder’s contractor who had attended the home the following August for general Year-End repairs reported no evidence of any possible leak damage.

Colin Shaw Contracting Inc. estimated that the opening and closing of the ceiling would cost $1,100.00. Depending on the extent of the leak, repair would cost in the realm of $2,500.00. The Builder believed that the whole repair could be dealt with for under $450.00.

5. Upper hallway east wall not straight (Item #44)

Although the claim was originally that the wall was not straight, the Applicant conceded that Mr. Heric took the appropriate measurements during his inspection of the claim in October 2009, which demonstrated the wall was in fact straight. The Applicants’ concern was thus amended to allege misalignment of the bathroom tiles on the other side of the wall. The Applicants relied on photographs of measurements that the male Applicant had taken, which purported to demonstrate a difference of 11 and 3/8” to 10 and 4/8”, measured along the inner wall (Exhibit #4, Tab 44, photograph 1). The thinner tile has an air vent. The Applicant stated that the result was a displeasing effect and an amateurish look.

The Applicant therefore requested that the tiles be re-laid. Colin Shaw Contracting Inc.’s estimated cost for the work required was $1,800.00. The Builder’s response was that its sub-contractor, M and A Flooring Ltd., would replace both the kitchen and the bathroom tile for a total of $1,585.00. The removal of the existing tiles and taxes would be extra.⁵

Article 12.16 of the CPG stipulates an “acceptable condition” as follows:

Resilient floor tiles shall be installed with tight joints to provide a generally uniform appearance throughout the room or defined area when viewed under normal lighting conditions from a normal viewing position.

The Applicant’s position is that this condition has not been met.

Mr. Heric measured the walls during his Year-End inspection in October 2009. He concluded that the wall was within the tolerances allowed under the industry guidelines and legislation. He noted that the tiles are aligned slightly off-centre in the bathroom, which causes the illusion of the wall being angled. He concluded that this was an aesthetic issue only, and therefore, not warrantable.

6. Basement window missing (Item #72)

The Builder omitted construction of a basement window. At some point soon after they took possession, the Applicants and the Builder agreed that the Builder would provide side insert windows to the front door of the home. This agreement was never put into writing and there later arose a dispute as to the intention of the two parties in forming the agreement.

The Applicant’s evidence was that the intention was to compensate the homeowners for the brickwork distortion, which the Builder’s required basement window insertion would cause to the outer brickwork of the home. The Builder’s position was that the inserts were intended as compensation for the missing basement window.

In the Fall of 2008, during the 30-Day inspection, Mr. Conte concluded that the item was not warranted, noting the existence of the negotiated agreement between the parties.⁶

In 2009, during Mr. Heric’s Year-End inspection, the issue was again raised. Mr. Heric’s conclusion was that the window was never part of the Agreement of Purchase and Sale (“APS”), and, as a result, fell outside the Act’s warranties.

The evidence established that the window was indeed a part of the Schedule drawings and sketches provided with the APS⁷.

Mr. Heric agreed that he had mistakenly failed to note the reference to the window in the APS, but testified that he would not have warranted the claimed item in any event, given the written waiver on each sketch included with the APS, as well as the negotiated settlement between the parties on the issue referenced by Mr. Conte at the 30-Day inspection.

The Applicant conceded the waiver and also acknowledged that the fine print on Schedule FP provides the Builder the option to make modifications or revisions. He asserted, however, that the Builder had not met requirements under the OBC to notify the municipality providing the building permit of any such changes. He later conceded that there is no requirement of notification to the homeowner.

Mr. Di Meo testified that the Builder’s impression was always that the inserts, which it had installed on the Applicants’ front door at a cost to the builder of $665.00, was to make up for its failure to install the basement window. The insertion of a replacement was not wanted by the homeowners post-construction (although such could be done given that the framing for the window was in place), as the Applicants were concerned that such would compromise the exterior brickwork. Mr. Di Meo noted that, had the Applicant made it clear that he wanted a window installed, this could have been done at a cost of $73.00 for material.

The Applicant provided a written quote for the insertion of a basement window of $1,013.25⁸. The Builder’s evidence included a copy of a price list from its supplier, showing a price for the window material of $80.48.

7. Foyer transom window missing (Item #72)

This claim arises again from the documentation included in the APS. Sketches of the home initially provided by the Builder during purchase negotiations were later initialled by the parties and form part of their APS. These illustrate a transom window over the front doors. This same item is included on all elevations of the model home constructed by the Builder, and filed with the municipality. Nonetheless, the Applicants’ home does not have a window.

When the Applicant raised the fact of the omission with the Builder prior to possession, he was advised that the transom window was not part of the design construction for the 8’ ceiling elevation model he had chosen, but was only available on the 9’ ceiling model designs. He accepted this explanation, despite the fact that the “Extras Sheet”, as provided to the Applicants at the time of selecting their model elevation, did not mention the transom window was only part of the package when the 9’ ceiling is selected⁹. Some time later, however, the Applicant noticed a new 8’ ceiling design home being constructed by the Builder in the development, which included the transom window. After taking photos and making relevant inquiries to the Builder, the framing of that home was revised and the transom window removed.

With his suspicions aroused, the Applicant contacted the Municipality for copies of the design permits filed for his home. On each copy, the transom window was included. All Plans referenced elevations with 9’ ceilings and made no reference to any modification for elevations with 8’ ceilings. The Applicant testified that municipal building officials had advised him that amendments to the original design drawings must be submitted for approval by the city.

Despite the Builder telling him on numerous occasions it was not possible to add a transom window due to the 8’ ceiling, the Applicant’s contractor, Colin Shaw, had provided an estimate of cost at $14,750.00¹⁰, for the extensive work such an insert would require, involving amongst other things, raising the roof line.

The Applicant testified that the transom window was required as it would let the necessary light into the dark foyer area. The decorative glass in the inserts he had negotiated for with the Builder were required for privacy and protection, but had the unforeseen effect of further darkening the entranceway.

Since the Applicant had accepted the Builder’s reasons for the omitted transom window in the Fall of 2008, this was not an area investigated by Mr. Conte. Mr. Heric did consider the issue the following Fall, as it was part of the Applicants’ Year-End Claim. It was Mr. Heric’s conclusion that the waiver in the APS, confirming that all design drawings may be modified unilaterally by the Builder, covered the issue and there was no warranty breach. He therefore denied the claim.

Mr. Heric testified that design changes required for the insertion, as contemplated by the Applicant, would necessitate other violations of the OBC given that it would reduce the flashing and change the slope of the overhead porch roof. Mr. Heric did not agree that adding the transom window would have a significant impact on the amount of light entering the entranceway given its location under the porch roof, its dimension and the angle of the entranceway on the street.

Mr. Nick Damino is a realtor who acts as Sales Manager for the Builder. He worked on the particular development project involving the Applicants’ home. He had no recollection of any dealings with the Applicants in particular, but stated that the transom window is never specifically mentioned in sales documents such as the APS. The only time the transom window option is disclosed is on Extra Upgrade Sheets, published by the Builder¹¹, where 9’ ceiling models are selected by a purchaser. The Extra Upgrade Sheet provided by the witness did not, however, reference the transom window.

Mr. Damino testified that not one of the model homes with 8’ ceilings constructed included a transom window, despite the fact that the majority of the homes in the project were 8’ ceiling elevations. As well, all of the 9’ ceiling models in the development included the transom window. Further, not one other purchaser had ever complained that the transom window, as appears on the sketch designs, was not part of their 8’ ceiling home.

Mr. Di Meo testified that the Builder initially intended for the development to consist of 9’ ceiling designed homes, however, after some time, it became apparent that these were not selling and so the decision was taken to offer 8’ ceiling homes at a cheaper price. One of the effects of this modification was removal of the transom window.

As early as the 30-Day Claim, problems had arisen between the Applicants and the Builder. The Builder heard that the Applicants were attempting to involve other purchasers with a petition against the Builder. It attempted to placate the Applicants, but, soon after, the issue of the transom window arose. The Builder advised the Applicants of a number of potential structural problems should amendments be attempted in order to install the transom window, including the fact that there was no beam to support the front door area and the porch roof slope could not accommodate such an addition. Nonetheless, the Applicants’ position remained that, according to the APS, they were entitled to the window, and they therefore were insisting on it.

In cross-examination, Mr. Di Meo advised that no amendments had been submitted to the Municipality for the 8’ ceiling model, as the relevant changes to the architectural and structural design were minor, and thus, such notification was not required.

He further commented on the fact that the neighbouring home originally included framing for a transom window, arose as an error with a new framing crew and poor communication between the framer and door/window people who were at cross-purposes for a time period.

8. Kitchen tiles rough (Item #77)

The Applicant claimed that between 10 and 20 uneven floor tiles in the kitchen had been subject to a Builder repair before the 30-Day Claim. He advised that this repair had been improper in that only these various tiles had been removed. In his opinion, the better form of repair would have been to re-tile the entire floor, as the spot repair performed could lead to premature cracking.

The Applicant relied on CPG Article 12.30, which provides, in part, that:

Ceramic/porcelain tile, marble or stone flooring shall be installed to prevent it from cracking or coming loose from the substrate.

He did acknowledge that, as of the Year-End inspection, there was no evidence of any grout cracking or tile loosening, although he believed that there was some cracking now and the floor felt squishy. He provided no photographs of any cracks in the kitchen floor since the Year-End inspection.

Mr. Heric’s evidence was that he viewed no evidence of any damage or failure during his inspection in the Fall of 2009. At that time, over one year had passed since the tiles had been replaced, and he was unable to find any of the common shrinkage cracks. He denied the claim.

THE LAW

Section 13(1) of the Act prescribes:

Every vendor of a home warrants to the owner,

(a) that the home,

(i) is constructed in a workmanlike manner and is free from defects in material,

(ii) is fit for habitation, and

(iii) is constructed in accordance with the Ontario Building Code;

(b) that the home is free of major structural defects as defined by the regulations; and

(c) such other warranties as are prescribed by the regulations.

Section 13 (2) of the Act prescribes:

A warranty under subsection (1) does not apply in respect of,

(a) defects in materials, design and work supplied by the owner;

(c) normal wear and tear;

(f) damage resulting from improper maintenance

Section 14 (3) prescribes:

Subject to the regulations, an owner of a home is entitled to receive payment out of the guarantee fund for damages resulting from a breach of warranty if,

(b) the person has a cause of action against the vendor or the builder, as the case may be, for damages resulting from the breach of warranty.

Section 14 (7) prescribes:

The Corporation may perform or arrange for the performance of any work in lieu of or in mitigation of damages claimed under this section.

DECISION AND ANALYSIS

The onus of proof rests on the Applicants to satisfy the Tribunal, on a balance of probabilities, that the Builder has breached one of the warranties set out in the Act and that they have suffered damages as a result of that breach.

1. Door cracks

The evidence establishes that the cracks of which the Applicants complain are likely a result of the lack of adequate protective finish applied to the areas by the Builder, and are therefore warrantable defects. The evidence also establishes to the Tribunal’s satisfaction that the Applicants have been compensated for this inadequacy by a monetary amount in the Settlement Agreement, which they entered into with Tarion in March 2009.

Contradictions in the evidence between the Applicant and Mr. Conte as to communications between the two concerning what the Applicants perceived to be additional damages are resolved in favour of the Applicant. The Tribunal has no reason to doubt the Applicant’s sincerity and believes it more reasonable for him to retain a clear memory of such an occurrence than Mr. Conte. Mr. Conte is no less credible, but he is also responsible for numerous homeowner warranty claims, and thus less likely to recall a specific incident.

However, the advice, allegedly provided by Mr. Conte, was that any work performed by the Applicants could affect future warranty coverage. This is correct and appropriate advice in keeping with the legislative provision of section 13(2) (a) and (f). The effect of that subsection is to predicate a homeowner’s valid warranty claims on his providing the home with proper maintenance and non-defective work, design and materials.

After having received funds to correct the Builder’s identified deficiency in improper stain and varnish protection to the doors, the Applicant opted to maintain the deficiency by not performing the corrective action. Exterior doors, as is the case, will naturally weather and wear if not so protected. The Applicant made the choice to risk this further wear over risking his providing some form of defective repair work. This was an unfortunate choice but can not be laid at the fault of the Builder; nor can it be added to the Builder’s original warranty failure. Rather, it has taken the role of the causation of the current additional damage claimed.

The Applicants’ estimate for repair from Colin Shaw Contracting Inc. does not establish that replacement is necessary to correct the problems. Repair, as originally envisioned by Tarion, is found by this Tribunal to be appropriate and more reasonable based on the testimony of Mr. Heric, who most recently viewed the alleged damage and concluded it was repairable. The Applicants should be content in knowing that they have received appropriate funds to correct the problems on both doors.

2. Side veneer

The Tribunal accepts the Applicants’ evidence that this issue revolves around the Applicants’ allegation that the glue has failed, although only applied by the Builder at a repair performed in the Fall of 2008. Unfortunately, this was not the claim as identified at the Year-End. Nor was any allegation of glue failure relied on during Mr. Heric’s Year-End inspection, who denied the warranty deficiency in fact claimed of further veneer cracks. In evidence, the Applicant conceded that the Settlement Agreement payout included stain and varnish, which would be the appropriate maintenance to correct any crack deficiency. The Applicant’s real concern was a newly identified inadequate adherence of the side veneer, which he claimed was under the protection of the Act at the time of Mr. Heric’s Year-End inspection in the Fall of 2009, due to the effect of the Builder’s one year warranty for such repair.

The facts establish, however, that the one year Builder repair warranty had expired before the issue was identified by the Applicants. While the video evidence presented by the Applicant clearly demonstrated some significant loosening of the veneer, the Applicant admitted that this was filmed in March 2010, some sixteen months post its installation. The Applicant further acknowledged that the glue issue was only pointed out to him by Colin Shaw Contracting Inc. at some date after the inspection by Mr. Heric, itself a whole year after the Builder’s installation of the veneer in 2008.

The Tribunal’s jurisdiction is predicated on the warranty coverage made available in the Act. By virtue of subsection 13(4), those warranties are limited to one year post possession. Given the time period when the glue deficiency was made apparent, the Applicants’ effort for remedial compensation under this legislation is not available. This claim too is therefore denied.

3. Basement Landing

The Tribunal accepts the Applicants’ position on this item of claim. It finds from the evidence that the nosing installed by the Builder was done poorly and is unacceptable. Mr. Heric’s justification for denying the warranty – that the nosing is only noticed when viewed from the unfinished basement – is rejected. The warranties establish standards required of builders in providing new home construction and do not distinguish between finished and unfinished areas of the home. This area of the staircase is not an area where aesthetics become irrelevant because it is an area not normally viewed. This was made clear by Mr. Conte’s initial warranting of the nosing at the 30-Day Claim inspection.

The Tribunal has reviewed the unreported decision of Vice-Chair Israel of this Tribunal in 2008 of 4185-ONHWPA, relied upon by the Respondent. In this instance on the facts of this case, the Tribunal concludes that the nosing provided to the Applicant was not installed in a workmanlike manner.

The only repair cost evidence provided by the homeowner was that of Colin Shaw Contracting Inc. for $250.00. The Builder’s response was that it could be done for $120.00. Given the clear antagonism between the Builder and the Applicants, the Tribunal concludes that a monetary payment is the preferred way to provide the warranty remedy and further concludes that the repair can likely be performed for $200.00.

4. Kitchen ceiling/master ensuite leak

Despite the Applicants’ claim that the Builder had performed numerous kitchen ceiling repairs, the evidence at the time of Mr. Conte’s initial inspection, six months following possession, was simply that the Builder had once attended for ceiling paint touch-ups. These were found to have been inadequate and the Applicants were provided with settlement funds to complete the painting.

Mr. Heric’s conclusion the following year, that there was no evidence of any leakage in the ceiling is accepted by the Tribunal. The Tribunal is also persuaded by his evidence that, were there indeed any leakage, as alleged, evidence of such would certainly be apparent now, over two years post-possession. Nor does the Applicants’ evidence establish any improper abnormal moisture in the ceiling areas. The evidence of the thermal imaging photographs is as consistent with the conclusion of normal pipe activity in the upper bathroom area as it is of any abnormal activity. Despite the photographs tendered by the Applicant, no observation is apparent, from either these photographs or any independent witness, that there is moisture on the area.

It is further noteworthy that the Applicant himself was not willing to take the chance that there was no leakage, when he denied the Builder’s offer to engage in destructive testing to verify the allegation because he was unwilling to pay the costs in the event that no abnormality was found.

This claim is denied.

5. Wall not straight/Bathroom tiles

The Tribunal finds that the bathroom tiles are close to one inch off alignment in the area of the room where the floor vent is situated between the door entrance and the sink cabinetry.

There is no allegation that the tiles are not properly installed nor is there any indication that functionality is impaired. Therefore, the issue for the Tribunal to determine is whether the misalignment is so significant as to result in an aesthetically disturbing situation, which would be unpleasing to the normal viewer in normal viewing circumstances. A review of all the evidence leads the Tribunal to conclude that this is not the case.

It was clear that even the Applicant did not view the tiles as off-centre or deficiently installed until the misalignment option was brought forward by the second Tarion Field Claim Representative, Mr. Heric, who found the visual effect so minimal as to not warrant his taking measurements.

Given the fact that the Applicants were not even aware there was any misalignment until such was drawn to their attention, the Tribunal cannot conclude that the aesthetic is so unappealing as to contravene the CPG or otherwise lead to warranty coverage.

This item of claim is therefore denied.

6. Basement window missing

Despite the evidence of an oral agreement between the parties as to their intentions of dealing with this item outside of the warranty protection offered by the Act, there is no evidence of any written agreement whereby the Applicants released the Builder from its warranty obligations established under the legislation. As a result, the warranty, if it is found to exist, remains a protection available to the homeowners.

Here the evidence demonstrated that the basement window was a part of the APS by virtue of the design drawings initialled by both parties during the contract negotiations. It was not provided. The waiver, which Mr. Heric chose to rely upon to deny the Applicants’ warranty, provides that these plans may be altered “…as necessitated by architectural controls and the construction process”. No evidence was led of either the controls or the process playing a part in the reasoning for the omission of the basement window.

The Tribunal concludes that the provision of the basement window was therefore warranted. In accordance with the evidence as to the cost of installing such a window other than by the Builder, the Applicants will be provided with compensation of $1,013.25.

7. Transom window

The Building Code Act, 1992, S.O. 1992, c.23 (the “BCA”) does require a home to be constructed in accordance with the municipal building permit, itself predicated on the filing of the architectural plans – see section 8 of the BCA. However, there is a recognition in the BCA that the plans’ design may be altered and/or modified during the construction process based on a myriad of practical and/or consumer choice factors. The BCA only requires re-filed amendments to the plans, where such changes are “material” – see section 8(12) of the BCA. What is “material” is not a defined concept.

The evidence of the Added Party in this proceeding was that the modification of the construction from 9’ ceilings to 8’ ceilings was not a “material” change. The homeowner provided no evidence to the contrary. Thus, despite the fact that the transom window as it appears on the municipal plans was not provided, the Tribunal is unable to conclude that the Added Party thereby has breached the OBC.

There is the added evidence presented by the Builder that it is not possible to modify the changed construction - as proffered by Colin Shaw - to reflect the original Plans filed, due to potential violations of the OBC that such alterations would likely cause in other respects. While this does raise the possibility that the change to the 8’ ceiling was indeed “material”, the Tribunal is unable to conclude that is so as a fact.

The situation of the transom window is unlike the situation with the basement window. There was evidence led by both the Builder and its realtor that the amendment of the construction design, whereby consumers were offered 8’ ceilings (as selected and chosen by these Applicants), required the removal of the transom window feature. Thus the waiver Mr. Heric relied upon to deny the claim is applicable in this instance.

Finally, there was no evidence that the doors at the front of the home were in any sense defective or deficient or otherwise in violation of a warranty. Their functionality is apparently sound. Therefore, even if there were a technical contravention of the OBC in terms of the Builder’s requirement to construct in accordance with the plans filed, the Tribunal is not able to conclude that there has been a violation of the OBC, which contravenes any construction standard or otherwise negatively affects the quality or integrity of the consumers’ home.

Relevant here, is the notation made by this Tribunal in (4796-ONHWPA-Claim) (Re) [2008] O.L.A.T.D. No. 403:

The Act is consumer protection legislation and, as such, must be liberally construed. However, its warranties are specifically enumerated in section 13. They are intended to provide new home purchasers with protection against incompetent and unscrupulous builders. They require workmanship, which is free from defects, in homes that are fit for habitation and built within the requirements of the Ontario Building Code (OBC). The Act does not aim to encompass contractual rights and obligations between the parties to a construction agreement arising from marketing or sales representations. Unfortunately homeowners often have the misconception that the Act will offer them protection from all disappointments they suffer in their new home. This is not the case.

If the Tribunal is incorrect in concluding that there has not been a breach of warranty, it still concludes that the Applicants are not entitled to damages on this item of their claim. The facts establish that the home is built identically to other similar model elevations in the development, that whether or not a transom window exists does not impact on the attractiveness of the home in order for re-sale, and that the ability of the transom window to provide any additional light into the living space is minimal. For all these reasons, the Tribunal concludes that there has been no damage suffered by the Applicants in the omission of the window, and therefore, their claim is denied on that basis as well.

8. Kitchen tiles

The evidence establishes that there is currently no evidence of any deficiency on the installation of the kitchen tiles. The Applicants’ concern is for what might occur in the future and is speculative. This Tribunal has often stated that unsubstantiated future and uncertain situations are not within the purview of this Tribunal.¹²

This claim is also denied.

ORDER

Accordingly, pursuant to the authority vested in it under section 16(3) of the Act, the Tribunal directs Tarion to pay to the Applicants the sum of $1,213.25, for damage compensation concerning Items #32 and #72 from the Decision Letter. In all other respects, the Tribunal directs Tarion to deny the Applicants’ claim.

LICENCE APPEAL TRIBUNAL

Jane Weary, Vice-Chair

RELEASED: July 23, 2010

Footnotes

1. 1Exhibit #5, Tab 15
2. 2No such documentation was in fact provided. The only written estimate made available by the Applicants was the Colin Shaw Contracting Inc. quote of June 13, 2010, Exhibit #10(b) – which estimates the repair cost at $1,050.00.
3. 3Approximately $239 - Exhibit #10(a), Tab 5
4. 4Exhibit #10(a), Tab 5, #23 and #24
5. 5Exhibit #13(b)
6. 6Exhibit #10(a), Tab 2
7. 7Exhibit #5, Tab 1 - Schedule “FP”
8. 8Exhibit #8(b)
9. 9Exhibit #4
10. 10Exhibit #10(b)
11. 11Exhibit #6
12. 12See [2006] O.L.A.T.D. No. 313