Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2014-01-23

FILE:

7704/ONHWPA

CASE NAME:

7704 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-

Denmar Construction & Renovations Ltd.

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

Simon Dann, Member

APPEARANCES:

For the Applicants:

Self-Represented

For the Respondent:

Joseph D. Kennedy, Counsel

For the Added Party:

Denis Toulouse, Agent

Heard in North Bay:

January 16, 2014

REASONS FOR DECISION AND ORDER

This is an appeal by the Applicants (“the Applicants”) to the Licence Appeal Tribunal (the “Tribunal”) from a Decision Letter of Tarion Warranty Corporation (“Tarion”), regarding a new home purchased from Denmar Construction & Renovations Ltd., (the “Added Party/Denmar”), in which Tarion denied the Applicants' claims as follows:

Claims denied from the Tarion Decision Letter dated October 18, 2012:

1. Claim (5) Living room - depressions in the floor all over;

2. Claim (7) All bedrooms - Floors rising across bedrooms, to the point there are raises and dips throughout, flooring put over raised nails and plaster, now pushing through the carpeting in Master Bedroom and in the Mid-size bedroom.

Tarion denied these claims on the basis that while they were covered by the first year warranty, the claims were submitted after the expiry of the first year warranty and therefore they were not covered under the warranty.

Applicant’s Evidence

The Applicant said she purchased the house in September 2009 but because there was no occupancy permit the actual purchase date was postponed to October 19, 2009. She sent her 30 day form to Tarion on March 11, 2010, Tarion replied that it had been sent too late and should have been sent on January 19, 2010.

The Applicant sent in her first year-end form on March 11, 2010, but Tarion advised her it was too early and she should resend it between August 26 and September 27, 2010. The Applicant then sent the year-end form on September 21, 2010. She said the flooring defects were noted on both the 30 day form and the year-end form. The builder attempted to address the deficiencies but did not complete them and said he would return to complete the remaining ones later on.

The Applicant's second-year form was submitted on September 23, 2011, and it also noted defects in the floors. On March 20, 2012, Vincenzo Vaccaro, the Tarion representative came to inspect the floors and advised her the defects were a first-year issue but agreed there was a problem.

When the Applicant went to the municipality for a copy of the building permit she also spoke with Alain Bazinet, the chief building official for West Nipissing. Mr. Bazinet attended at a subsequent inspection of the flooring complaint and determined there was an Ontario Building Code ("OBC") violation.

Following the inspection, Mr. Bazinet issued an order to comply dated March 20, 2012 (Exhibit 3, Tab 12). It stated there were certain violations of the OBC and ordered the builder to comply with the OBC and correct the noted violations?.

The Applicant said it was her opinion there was a sub-floor issue and the floor was soft probably due to exposure to the elements during the construction phase. She said repairs have been done but also believes the depressions in the floor remain. She is attempting to sell the home but believes she will lose money because she has to disclose the problem and the work that has been done to try and fix the problem.

She obtained two estimates for the type of repair work required and would like the builder to do the repair or to be awarded the estimated amount to complete the repair work on her own.

The Applicant said the builder brought an engineer, William Bryant of Bry-Co Engineering Ltd., to inspect her complaint and to provide an opinion on the results of the repair. Mr. Bazinet also attended at that inspection.

The builder's engineer thought the repairs were sufficient and he issued a report with his opinion. The Applicant said she does not believe she can use the report as part of her disclosure to prospective buyers because it is the builders report.

She is aware of the last inspection done by Mr. Bazinet, on December 27, 2013, and that he reported everything was okay (Exhibit 6).

Through cross-examination the Tribunal heard the co-purchasers of the home were the Applicants’ parents and while being co-signers, they did not live in the home.

The Applicant said she moved into the home in October 2009, with her two children and she currently has the house advertised for private sale but has not received any offers.

When asked about using the engineering report which states the problems have been satisfactorily repaired, the Applicant acknowledged she has not asked the builder if she could use it. She was advised by her original lawyer that she could not use the report without the builder's permission. She has not shown the report to prospective buyers.

The Applicant was asked if she would use the report if the builder said she could, she replied "no" because in her opinion, it is the engineer approving his own work. The Applicant has not hired an engineering consultant of her own.

When asked what she wanted of the Tribunal, the Applicant replied she would like the floor repaired properly as she believes the problem remains. The evidence she is relying on is based on what she experiences when she walks across the floor and feels the softness in the floor.

Regarding the two estimates she obtained from independent contractors, who essentially carried out visual inspections, she acknowledged that neither had a copy of the Bry-Co report because she wanted them to have an unbiased opinion.

The Applicant also referred to a major structural defect inspection conducted by Bruce Martin, in September 2012, who she claimed cited two building code violations but no report document was provided in evidence.

Respondent’s Evidence

Alain Bazinet is the chief building official for the municipality of West Nipissing and has been in that position since 2005. As chief building official he enforces the OBC, issues permits, reviews plans, and also performs inspections. He issued the Order to Comply to the builder on March 21, 2012, and also prepared the Schedule A work list (Exhibit 3, Tab 12) which is part of the Order.

On March 19, 2013, Mr. Bazinet wrote to the builder acknowledging the repairs had been carried out. He advised the builder that he recognized the Bry-Co report dated March 11, 2013, which reported that the stiffening work carried out by the builder was more than adequate for the repair. Mr. Bazinet wrote to confirm the order to comply had been lifted.

It was Mr. Bazinet's opinion that there were now no outstanding orders to comply.

Vincenzo Vaccaro has been a Tarion warranty service representative since 2008. His work experience includes carpentry, residential framing, and high-rise concrete forming.

Mr. Vaccaro recognized the Tarion letter of March 17, 2010, in which Tarion had advised the Applicants that their 30 day form had been submitted late (Exhibt 3, Tab 3).

His warranty assessment report of March 21, 2012, (Exhbit 3, Tab 11) includes references to the Applicants’ claim items and the note that the claim item was submitted to Tarion after the expiry of the one-year warranty and therefore was not covered under warranty. He wrote that while the item did fall within the scope of statutory warranty coverage it had not been submitted on time.

Mr. Vaccaro testified the Bry-Co report addresses the complaint item and reports the problem had been fixed. He said that Mr. Bazinet's letter of March 19, 2013 confirmed the municipal building department's order to comply had been satisfied.

On cross-examination Mr. Vaccaro acknowledged Tarion had made an error with the September 25, 2009, possession date but was unable to answer whether he knew if Tarion was aware it was an incorrect date (the actual date of possession being October 19, 2009). The Applicant said she had received a letter from Tarion regarding the correct possession date but was unable to find it.

Added Party's Evidence

William John Bryant was presented as an expert engineer witness and his curriculum vitae was entered as Exhibit 7. He is the author of the Bry-Co engineering report (Exhibit 5, Tab 7).

Mr. Bryant testified that the stiffening system added to the floor system reduced floor deflection by an additional 60% over what the OBC accepts. He said the remedy went beyond anything that was needed and he agreed his report could be used by any other party to show there were no problems with the floor system.

Mr. Bryant suggested the Applicant's comment about softness or bounce in the floor could be due to the use of the upgraded or thicker underlay material she had purchased as an extra.

Denis Toulouse is the founder of Denmar. He said he has been in the construction industry since 1985 and uses internal trades for remedial work. He estimated his cost to resolve the issue with the floor was about $5000-$6000 plus an additional amount of about $1800 for the Bry-Co report.

Mr. Toulouse said the Applicants were free to use the Bry-Co report to show that there was no problem with the home.

SUBMISSIONS

In their closing submissions the Applicants first stated that Tarion had the wrong possession date and she has had her own out-of-pocket expenses to deal with in pursuing this appeal.

Mr. Kennedy, Tarion's counsel, then argued that the possession date is moot and no item was found to be currently warranted. As far as the Applicants’ claims were concerned, the repairs were approved by an expert engineer and the municipality issued a report that found there were no OBC violations.

Mr. Kennedy acknowledged the Applicants did file a year-end form however no conciliation inspection report had been requested. Any major construction defects which may have been reported through another warranty assessment report are not under this Tribunal's jurisdiction as the decision was never appealed.

He further submitted that the Applicant's testimony regarding some softness in the floor was addressed by the expert testimony of Mr. Bryant who suggested the bounce could be due to the type of material used in the underlay.

Mr. Kennedy asked that the appeal be dismissed based on evidence presented at this hearing.

The Added Party submitted he had done everything he could to perform the identified repairs and he is satisfied the municipal request for the order to comply and the final work completed meet OBC requirements.

The applicable provisions of the Act are as follows:

Warranties

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

(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.

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 therefore, 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 issue before the Tribunal, as defined by the Tarion Decision Letter of October 18, 2012, appears to be only one: whether the Applicants’ complaint is warranted under section 13 of the Act and, if so, what is the appropriate remedy. However, based on the evidence provided through the hearing, the Tribunal is of the view that there is a secondary issue as well and, this is whether the remedy undertaken by the builder satisfactorily resolved the OBC violation.

ANALYSIS

The issue in this matter, based on the Tarion decision to deny the Applicants' claim because the warranty claim was not filed on time, is fairly simple and straight-forward.

Regarding the filing of the claims and dating, the Applicants submitted that there was an issue with an incorrect date of possession by Tarion and the Tribunal's understanding of their evidence submission is that their claim should have been accepted.

However, the facts found are:

1. the Applicants took possession of the home on October 19, 2009 and submitted their 30 day form on March 11, 2010 (Exhibit 3, Tab 2) - almost 5 months later;

a. therefore, the 30-day form is found to have been submitted late irrespective of the Applicants’ claim that Tarion had the incorrect possession date of September 2009; the fact is the 30-day form was submitted substantially beyond the required 30 days from possession;

2. the first year-end form is found to have been submitted on time and accepted for warranty coverage (Exhibit 3, Tab 5);

a. the Tarion letter of acceptance regarding the Applicants’ first year-end form advised the Applicants that if by February 1, 2011, there were unresolved first year items, they had between February 2, 2011, and March 3, 2011, "to request a Tarion inspection" of the home to assess the situation;

b. there is no evidence that the Applicants requested a Tarion inspection of first year items until after submitting the second year form (September 23, 2011 -Exhibit 3, Tab 6); therefore, Tarion is found to have properly concluded the first year warranty coverage items file;

3. the second year form is found to have been submitted on time (Exhibit 3, Tab 7) but it also listed items which Tarion identified as only being covered by the first year warranty coverage - therefore they were not eligible for the two year warranty coverage;

a. the Tarion letter of acceptance regarding the Applicants’ second year-end form advised the Applicants that if by January 30, 2012, there were unresolved second year items, they had between January 31, 2012, and February 29, 2012, "to request a Tarion inspection" of the home to assess the situation;

b. the Applicants are found to have requested a Tarion conciliation of the second year items on time (February 14, 2012 - Exhibit 3, Tab 8), and a conciliation inspection was scheduled for March 20, 2012;

c. the resulting inspection identified one warranted item as a breach of the two year building code warranty;

i. the builder was issued an order to comply and remedy the OBC violation;

ii. the Tribunal finds the evidence contained in Exhibits 5-Tabs 7, 8, and Exhibit 6, as well as the testimonies of Mr. Bazinet and Mr. Bryant confirm the repair work to remedy the OBC violation was satisfactorily carried out and the municipality lifted the order to comply as it considered the issue resolved.

Based on the evidence submitted, the Tribunal finds the two claims (denied by Tarion for reasons of not having been pursued through the first year warranty coverage period requirements) were not submitted on time and therefore are not eligible for warranty coverage.

The Tribunal also finds the evidence regarding the repair work completed to comply with the municipality's order has satisfactorily resolved the OBC violation. The Applicant provided no material evidence to show this was not the case.

ORDER

Therefore, and pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs Tarion to deny the Applicants’ claim for warranty.

LICENCE APPEAL TRIBUNAL

Simon Dann, Member

Released: January 23, 2014