7484 v. Tarion Warranty Corporation, 2013 CanLII 98368

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE: 2013-04-09

FILE: 7484/ONHWPA

CASE NAME: 7484 v. Tarion Warranty Corporation

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

The Applicants Applicants

• and -

Tarion Warranty Corporation Respondent

• and -

Reidco North Ltd. Added Party

DECISION AND ORDER

ADJUDICATOR: D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Applicants: Self-Represented

For the Respondent: Neil Abbott, Counsel

For the Added Party: Brian Campbell

Heard in Toronto: April 2, 2013

REASONS FOR DECISION AND ORDER

1The Applicants appeal from the decision of Tarion Warranty Corporation (“Tarion”) set out in a Decision Letter dated June 6, 2012 to deny their claim for warranty. The vendor of the home, Reidco North Ltd. (“Reidco”), has been added as a party to these proceedings and supports the position taken by Tarion. To succeed in this appeal, the Applicant must establish, on a balance of probabilities, that there are defects in the construction of their home and that those defects constitute a major structural defect as that term is used in the regulations.

2S. 13(1)(a) sets out the applicable statutory warranties:

13. (1) Every vendor of a home warrants to the owner,

(a) that the home is,

(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;

Term of warranty under subs.(1)

(4) A warranty under subsection (1) applies only in respect of claims made thereunder within one year after the warranty takes effect, or such longer time under such conditions as are prescribed.

3O/Reg. 892/90 (the “Regulation”) prescribes warranty periods of longer than a year. In particular, it establishes a period of seven years to make major structural defect claims and defines the nature of a major structural defect:

“major structural defect” means,

(b) in respect of a home that is enrolled after December 31, 1990 and that is not a post June 30, 2012 home, any defect in work or materials, including any defect that results in significant damage due to soil movement, major cracks in basement walls, collapse or serious distortion of joints or roof structure and chemical failure of materials, if the defect,

(i) results in failure of the load-bearing portion of any building or materially and adversely affects its load-bearing function, or

(ii) materially and adversely affects the use of such building for the purpose for which it was intended,

but does not include any defect attributable in whole or in part to a Year 2000 compliance problem, flood damage, dampness not arising from failure of a load-bearing portion of the building, damage to drains or services, damage to finishes, malicious damage or damage arising from acts of God, acts of the owners or their tenants, licensees or invitees, acts of civil or military authorities or acts of war, riot, insurrection or civil commotion; (“vice de construction important”)

“major structural defect claim period” means,

(a) the period beginning immediately after the date of possession and ending on the seventh anniversary of the date of possession, in the case of a warranty claim made under section 4.6

4A brief chronology of the facts will serve to highlight why the Applicants must advance their claim as a major structural defect. The Applicants took possession of their home on November 28, 2008. They made a number of claims during the first year warranty period, including “19.9 – Exterior - Check vent placement and roof tile due to recent leak in the loft – unaware source found or not found.” The First Year Claim Form was dated October 27, 2009 (Ex 4 Tab 1). As a results of the Applicants, filing the form Reidco was given a period of 120 days to carry out repairs before the Applicants were entitled to make a claim to Tarion for a conciliation inspection. Reidco either carried out the repairs or entered into a cash settlement with the Applicants within the 120 period. The Applicants signed a Mutual Release on March 22, 2010 stating that they “release Reidco North Ltd. V/B #37986 as full and final resolution of One Year Tarion Warranty Form listed item” (Ex 4 Tab 3). They did not request a conciliation inspection from Tarion so, according to s. 4.2 (7) of the Regulation, they are deemed to have withdrawn all of their first year claims.

5The Applicants continued to suffer from water leakage around a dormer into their loft and some bedrooms. There was mould and water damage. This type of defect is covered by a two year warranty so they filed two Second Year Warranty Claim Forms seeking repair of this and other deficiencies (Ex 4 Tab 7). Reidco attempted unsuccessfully to stop the leakage. Eventually Tarion found Reidco to be in breach of its warranty obligations and hired a contractor who was successful. Tarion then removed the mould and carried out a subsequent inspection to ensure that the mould contamination had been dealt with (Ex 4 Tab 18).

6During the repairs to the dormer in April 2011, one of the roofing contractors advised the Applicants that their attic may have insufficient ventilation. The Applicants notified Tarion of their concerns and were advised that, two and a half years having passed since the date of possession, the only remaining warranty coverage was for a major structural defect. They retained an engineering firm, exp, to inspect their home. The inspection was carried out on June 27, 2011, during the period when Tarion and Reidco were attempting repairs to the dormer, and the written preliminary review is dated October 11, 2011 (Ex 5 Pages 57 & 58).

7The exp report is interesting both on the basis of what it says and what it does not say. The review states that at issue were leaks from ice damming and through the dormer. It suspected mould problems in the top floors, the very problems that Tarion was in the process of fixing. It identifies a number of “potentially problematic issues” and finds that “a detailed review is warranted.” The Applicants did not proceed to a detailed review because of the high cost associated with it.

7Basing it on the exp preliminary review, the Applicants advanced a major structural defect claim dated December 9, 2011 and faxed to Tarion on December 19, 2011. The claim cites four grounds:

1. Roof – Insufficient ventilation to roof/attic space – Building code violation – Documented

2. Roof – Wrongly placed ventilation to back of house

3. Attic – Lack of space between insulation and roof

4. Attic – Request assessment of possible mould in attic insulation and peak of house where insulation preventing airflow to peak of house – possible “sweating” in attic and attic peak/space

8The configuration of the attic has created a number of problems for the Applicants. There are three accessible lower attic spaces. There is then an inaccessible attic space in the peak of the house. The Applicants assert that poor ventilation must be causing mould problems in that upper attic. That mould, in the Applicant’s view, is causing the roof trusses to deteriorate such that their roof is likely to fail before the useful life of the house. In their view, this constitutes a major structural defect. Tarion’s Senior Warranty Services Representative, Karin Gaupholm, on the other hand, testified that during her inspection she found no evidence of any mould growth. In her evidence, she stated that if mould were actively growing in the upper attic, there would be signs of it in the form of bubbling or discoloration on the inside of the house, and there are no such signs. A crucial element for mould growth is water. There was no sign of water damage on the ceiling of the loft. She is forced to conclude that there is adequate ventilation and no mould in the upper attic.

9Because mould had been an issue with respect to the leaks around the dormer, Tarion retained the services of an expert in mould remediation, Michael Chymycz of Gemco Engineering & Environmental Services. The Tribunal heard evidence concerning Mr. Chymycz’s qualifications and experience and qualified him to give expert testimony regarding indoor air and mould assessments. He visited the Applicant’s home on three occasions, June 27, 2011, October 27, 2011 and April 18, 2012 (Ex 4 Tabs 19, 23 & 30 respectively).

10On Mr. Chymycz’s first visit to the Applicants’ home, he was there to inspect water damage and mould contamination arising from the leaking dormer. He recommended:

…all visible water damaged and/or mould contaminated baseboard, drywall, insulation and vapour barrier (where installed) be removed and properly disposed of from along the base of the South wall within the loft as well as from the Bulkhead at the South wall within the Girls [sic] Second floor South bedroom. Upon removal and disposal of these materials, a further inspection for potential mould contamination in newly exposed areas may be required.

11In a report dated November 1, 2011, Mr. Chymycz sets out his findings following the remedial work he recommended. He states:

Based on the visual, instrumental and laboratory analysis performed, an indoor mould contamination issue was not identified within any Assessed areas and were noted to be indicative of an IICRC Condition 1 environment defined as “(normal ecology) – may have settled spores, fungal fragments or traces of actual growth whose identity, location and quantity is reflective of normal fungal ecology for an indoor environment.”

We hereby confirm that the remediation has passed the PRV testing and the Assessed areas are safe to occupy/reoccupy and/or the property can safely have rebuild work commence (if applicable).

12The two reports above relate to the loft and bedrooms on the upper levels. The Applicant who testified advised the Tribunal that the repairs in this area have been effective and there has been no recurrence of leaking or mould growth in these areas.

13Mr. Chymycz re-attended on April 18, 2012, with Ms Gaupholm, specifically to test for possible mould in the attic arising out of the Applicants’ concerns set out in the Major Structural Defect Form. He tested all of the accessible attic areas and found one area of approximately 6 square inches (as opposed to 6 inches square) where there was suspected mould growth. The growth was around a vent pipe and he surmised that there had previously been some leakage around the pipe that had provided the moisture necessary for mould growth. He found no evidence that the leak still persisted. He stated that current Construction Association guidelines categorize this minor level of mould contamination as one that does not require professional intervention to remove. He accepted Ms Gaupholm’s approach to spray the area with a fungicide, she suggested Concrobium, an over the counter fungicide, and then apply a mould resistant sealant. He differed from her approach slightly by stating that he would probably wire brush the mould area after a first application of Concrobium and then apply it a second time. In his view this work could be easily undertaken by the homeowner for little cost.

14In Mr. Chymycz’s view, the level of contamination did not render the home uninhabitable. It was in an unconditioned attic space where any spores would vent to the outside and would not “communicate” with the living space. He concluded in a follow up report dated August 2, 2012 (Ex 4 Tab 33):

Based on laboratory analysis results of the spore trap samples collected from within the North Attic space as well as the interior living space of the residence, an aerosolized mould contamination issue was not identified within the conditioned indoor living space or within the unconditioned North Attic space.

It is recommended that the identified area of contaminated sheathing/roof decking be cleaned and decontaminated, however, based on Canadian Construction Association guidelines, the cleaning and/or removal does not have to be performed by a professional mould remediation specialist.

At the time of the Assessment the small area of contamination identified within the North Attic space was not noted to be affecting indoor air quality in the livable space within the residence. Based on the visual, instrumental and laboratory analysis performed, the residence is safe to occupy.

15The difficulty the Applicants face in the current matter is that their concerns are prospective. They believe that their home may suffer at some future point from either mould contamination or structural failure. There is no evidence before the Tribunal by which it can conclude that any load-bearing element of their home is about to fail or has been materially affected to such an extent that is in danger of failure. While the Applicants’ concerns may be deeply and sincerely held, there is no objective analysis, evidence or expert opinion to support them. The exp preliminary review identifies areas of potential concern, only. Without the recommended follow up, it does not assist the Tribunal in determining any material issue. While the Tribunal may sympathize with the Applicants and bemoan the cost of expert inspections and reports, that does not change the fact that the Applicants carried the onus of establishing that their complaints fell within the definition of “major structural defect” and they have led no evidence in that regard.

16The evidence is overwhelming that there is no mould contamination issue within the living space of the home. Exp examined the area either just before or during remediation efforts. Gemco tested the air in October 2011 and again April 2012 and found no issues. There is no evidence to suggest that there is a defect which materially affects the use of the building as a family home – its intended purpose.

ORDER

13For the foregoing reasons, the Tribunal directs Tarion to deny the Applicants’ claim for warranty.