Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2013-07-29

FILE:

7776/ONHWPA

CASE NAME:

7776 v. Tarion Warranty Corporation

An Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O. 31 – to Disallow a Claim

Applicants

Applicants

-and-

Tarion Warranty Corporation

Respondent

-and-

1466098 Ontario Limited

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

E. Alan Garbe, Vice-Chair

APPEARANCES:

For the Applicants:

Self-represented

For the Respondent:

Christopher Mas, Paralegal

For the Added Party:

Carlo Raponi, Agent

Heard in Toronto:

June 17, 2013

REASONS FOR DECISION AND ORDER

This is an appeal by the Applicants to the Licence Appeal Tribunal (the "Tribunal") from two Decision Letters of Tarion Warranty Corporation ("Tarion") dated November 13, 2012 and November 26, 2012 with respect to a new home purchased from, 1466098 Ontario Limited o/a Baycliffe Homes (the "Added Party"), in which Tarion denied (in part) the Applicants' claims

BACKGROUND

In their Year End Statutory Warranty Form, the Applicants submitted a list of 43 outstanding items with respect to the home which they purchased from the Added Party pursuant to an Agreement of Purchase and Sale dated December 10, 2010. Of this number of items 15 were withdrawn, 1 was warranted and 19 were not warranted under the Warranty Assessment Report dated September 19, 2012. The remaining items were not referenced in the Warranty Report.

The Applicants appealed the Decision Letter dated November 13, 2012, by notice of appeal dated November 28, 2012, which addressed the issue of cracks in the hardwood flooring in the corridor, living room/dining room, which is item 14 in the Warranty Assessment Report. The Applicants appealed the Decision Letter dated November 26, 2012, by notice of appeal dated December 10, 2012, with reference to items 6, 13, 22, 24, 1(h) and 5(a) in the Warranty Assessment Report. At the time of the hearing of the appeals, items 6, 22 and 1(h) were withdrawn, item 5(a) had been settled, which left items 14 and 24 (the 30' central vacuum hose, which does not reach the north east corner of the master bedroom to be addressed.

At the commencement of the hearing, the documents delivered by the Applicants ware entered as Exhibit 4 and the Respondent's Book of Documents was entered as Exhibit 5.

EVIDENCE

Mr. Patel gave evidence on behalf of the Applicants and stated that one board of the hardwood flooring in the living room had been replaced but that he had refused to allow the contractor, sent by the Added Party, to install the second board because he was using a screw driver and hammer to remove the board, which the Applicant felt were not appropriate tools for the job and wished to have the second board installed properly.

The Applicant stated that he subsequently discovered that there were more than two boards which were "cracked" and referred to a report dated October 3, 2012, of Vintage Hardwood Flooring, which refers to the floor having been installed in January of 2011 and the home owner taking possession in March of 2011. The report states that approximately 10 cracked boards were found in the family room, 10 in the hallway and 4 in the dinning room. In addition, the floor was in a "cupped state" which indicates that it picked up moisture from the time of installation. The report goes on to state that at the time of inspection the floor was within recommended relative humidity range and concluded that at some point the floor had picked up moisture and expanded.

The Applicants' documents show that this report was forwarded to various parties including the Added Party. The Applicant stated that at some point there had been a leaking pipe in the basement and he believed that this leak caused a build up of moisture in the basement which may have affected the floor.

The Applicant referred to an inspection report conducted on March 24, 2013, by an individual with his National Wood Flooring Association Certified Professional Certification, which report concurred with the report from Vintage Hardwood, but, in addition noted, that rosin paper was used as an underlay between the subfloor and the hardwood flooring. The Applicant stated that he believes that the underlayment may have absorbed moisture which may have affected the underside of the hardwood flooring which caused cupping.

The witness referred to an email from a flooring company which quoted a price of $5,900.00 to remove and replace the Applicants' floor. He also presented a quotation from a different flooring company which quoted the amount of $7,235.62 to replace the floor. Counsel for the Respondent objected to the introduction of these quotes as they had not been previously provided. They were marked as Exhibits 7A and 7B respectively for identification purpose only.

The witness stated that the cost of a vacuum hose of the required length (item 24) was $200.00.

Under cross-examination, the Applicant acknowledged that he had signed for the Home Owner Information Package as indicated on a copy of the Warranty Certificate appearing at Tab 2 of Exhibit 5. The Applicant confirmed that he had completed the 30 Day Warranty Form, appearing at Tab 3 of Exhibit 5, and the One Year Warranty Form appearing at Tab 4 of Exhibit 5. The Applicant acknowledged there was no reference to the cracked hardwood floor boards in the 30 Day Warranty Form and that it was only in the One Year Warranty Form that there was reference to "hardwood panel cracked in corridor, living room/dinning room". Further, the Applicant acknowledged that it was only at the time of the warranty inspection, 5 months after the end of the one year warranty period, that the Applicant noted that there were more than 2 cracked boards.

Ken Murray gave evidence on behalf of the Respondent. He identified himself as a senior warranty representative with 10 years experience with Tarion. As part of his responsibilities, he conducts conciliations and negotiated settlements. The witness stated that prior to joining Tarion he ran a builder's service department for 14 years and that he was a licensed carpenter and certified in various other trades.

The witness referred to the One Year Warranty Form and stated that in this form the Applicants made no reference to boards "cupping" and did not indicate there were more than 2 boards that were cracked. The witness referred to the Warranty Assessment Report at Tab 5 of Exhibit 5, conducted on September 18, 2012, approximately 6 months after the expiration of the one year warranty period. With respect to those items which are the subject matter of this hearing, Mr. Murray stated that at the time of the inspection he was aware of only 2 cracked boards to be inspected although there were areas where other boards were marked with tape in the Applicant's home. He did not inspect these other boards.

With respect to the issue of the vacuum hose, the witness stated that there were a variety of lengths of vacuum hoses available and it is up to the homeowner, when he purchased the vacuum equipment, to ensure that he obtains a hose long enough to do the required areas.

Mr. Murray stated that in the report (Exhibit 6A) there is reference to the National Wood Floor Association's technical publications and stated that for Tarion's purposes they relied on the manufacturer's standards.

Mr. Murray stated that if the cupping were due to moisture in the house during the period of construction or immediately after construction, the cupping would have been evident within days of the homeowner taking possession and therefore one would expect it would have been noted on the 30 Day Warranty Form. The witness stated that it was doubtful that the rosin paper would have created a moisture issue on the underside of the hardwood floor.

On cross-examination Mr. Murray did acknowledge there had been a telephone conversation where the Applicant had indicated that there were 30 to 45 boards which had cupping.

Carlo Raponi testified on behalf of the Added Party. He stated he is the controller and customer service manager of the Added Party.

He stated that the Added Party had repaired one of the cracked boards and offered to replace the second board but the Applicant did not accept the repair of the second board. The replacement board was left with the Applicant for installation in any manner he saw fit.

The witness stated that during the period after the installation of the hardwood floor the house was not closed up as other trades were in and out of the home prior to the Applicants taking possession so moisture would not have been trapped in the home.

THE LAW

The applicable provisions of the Act are as follows:

Warranties

13. (1) 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.

Exclusions

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

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

(b) secondary damage caused by defects, such as property damage and personal injury;

(c) normal wear and tear;

(d) normal shrinkage of materials caused by drying after construction;

(e) damage caused by dampness or condensation due to failure by the owner to maintain adequate ventilation;

(f) damage resulting from improper maintenance;

(g) alterations, deletions or additions made by the owner;

(h) subsidence of the land around the building or along utility lines, other than subsidence beneath the footings of the building;

(i) damage resulting from an act of God;

(j) damage caused by insects and rodents, except where construction is in contravention of the Ontario Building Code;

(k) damage caused by municipal services or other utilities;

(l) surface defects in work and materials specified and accepted in writing by the owner at the date of possession.

Notice of decision under s. 14

16. (1) Where the Corporation makes a decision under section 14, it shall serve notice of the decision, together with written reasons therefor, on the person or owner affected.

Notice requiring hearing

(2) A notice under subsection (1) shall state that the person or owner served is entitled to a hearing by the Tribunal if the person or owner mails or delivers, within fifteen days after service of the notice under subsection (1), notice in writing requiring a hearing to the Corporation and the Tribunal.

Powers of Tribunal

(3) Where a person or owner gives notice in accordance with subsection (2), the Tribunal shall appoint a time for and hold the hearing and may by order direct the Corporation to take such action as the Tribunal considers the Corporation ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Corporation.

Parties

(4) The Corporation, the person or owner who has required the hearing and such other persons as the Tribunal may specify are parties to proceedings before the Tribunal under this section.

ISSUES

The Respondent takes the position that as the Applicant failed to identify any boards as showing signs of "cupping", the Applicant is precluded now from raising that as a matter for warranty as it has been raised after the expiration of the one year warranty period.

Further, it is the Respondent's position that as the Applicant did not advise Tarion prior to the expiration of the one year period that there were more than 2 boards, the Applicant is precluded from now claiming for a greater number of possibly damaged boards.

The Applicant has stated that he only learned about cupping as a result of the Vintage Hardwood Flooring Inspection Report, dated October 3, 2012.

The issues therefore are:

1. Are the Applicants precluded from making a warranty claim with respect to those boards which show sign of "cupping"?

2. Are the Applicants precluded from making a warranty claim for more than two boards?

3. Is the matter of the location of the outlet for the built-in vacuum system a responsibility of the Added Party or is it the Applicants' responsibility to obtain the correct length of hose?

APPLICATION OF LAW TO FACTS

The Tribunal finds that the Respondent's argument that the Applicants are prohibited from raising the issue of boards that show signs of cupping because they did not raise the matter within the one year warranty period to be overly technical and inconsistent with this consumer protection legislation. There are numerous situations where technical or quasi technical terms are used within the industry with which a lay person would be unfamiliar. To deny the consumer the right to bring forward a warranty claim solely by reason of the use of the wrong or different terminology is unacceptable.

With respect to the issue of the number of boards for which the Applicants were making a claim, it is noted that in the One Year Warranty Form the Applicants stated in item 14, "hardwood panel cracked in the corridor in the livingroom/diningroom", which suggests that although the singular is used, there are boards in at least 2 and possibly 3 locations which are "cracked". There is nothing in the material prior to the Warranty Assessment Report that suggests the actual number of boards for which the Applicants are making a complaint. The Warranty Assessment Report, in addressing this item, states

"the homeowner stated that the builder had replaced the one cracked board but he would not allow the piece in the hallway to be changed because he did not like the way it was being done. The builder left the homeowner a replacement board for the homeowner to replace later. The homeowner stated this was acceptable. The homeowner stated he had found new cracked boards that were not part of the original complaint and the builder is working with him to resolve this. There is no defect in workmanship that amounts to a breach of the One Year Workmanship Warranty"

There is no evidence as to why the Added Party replaced the two boards or that had the Added Party not replaced the two boards, it would have been a warranted claim.

It is unclear when the telephone conversation took place in which the Applicant advised Mr. Murray that there were between 30 and 45 damaged boards. The Tribunal does note that in the Notice of Appeal to the Decision Letter of November 13, 2012, the Applicant states

"at the time of filing the One Year Warranty Form, 2 hardwood panels were found cracked. By the time they were being replaced, a couple more were found cracked. After a few weeks many more hardwood panels were found cracked day by day."

This statement supports the Respondent's position that the only issue reported in the One Year Warranty Form was the 2 cracked hardwood boards. Further, this statement indicates that after the one year period additional boards appeared to have cracked and, indeed, more boards continued to show signs of cracking or cupping as the Applicants said in their appeal "day by day".

The only conclusion that can be drawn by the Tribunal with respect this issue is that after occupying the home for 12 months the Applicants had found only 2 cracked boards.

The evidence is that had the cracking or the cupping been caused by humidity in the home between the date of installation of the hardwood floor in January and the taking of possession of the home by the Applicants in March, the problem would probably have become apparent within a month of the Applicants taking possession and certainly before the end of the one year warranty period. The fact that additional boards were not noted by the Applicants until after the expiration of the one year warranty period can only lead to the conclusion that problems with the additional boards arose more than 12 months after the Applicants took possession of the home.

It is noted that the Applicants were meticulous in recording problems with the home, both in the 30 Day and the One Year Warranty Forms and it is doubtful that they would have missed the cracking or cupping in other boards once they had noticed the problems in the boards for which a claim was made.

With respect to the issue of the vacuum hose, the Tribunal finds that this is matter for the homeowners to address as it is the homeowners' responsibility to install the vacuum cleaner equipment which includes acquiring a hose of the appropriate length. The exclusion in subsection 13(2)(a) of the Act applies to this claim.

In conclusion, the Applicants have failed to satisfy the Tribunal on the balance of probabilities, that they have claims which are subject to warranty by the Respondent.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs Tarion to deny the claims in full.

LICENCE APPEAL TRIBUNAL

E. Alan Garbe Vice-Chair

Released: July 29, 2013