Licence Appeal Tribunal File Number: 14789, 14798 and 14799 ONHWPA
In the matter of an Appeal from a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”) to deny a claim for Delayed Occupancy under section 14(3) of the Act
Between:
Shahrzad Mobasher Fard
Appellant
and
Tarion Warranty Corporation
Respondent
DECISION
VICE-CHAIR:
Avril A. Farlam
APPEARANCES:
For the Appellant:
Shahrzad Mobasher Fard, Self-represented
For the Respondent:
Catherine Longo, Counsel
HEARD: July 14, 2023
OVERVIEW
1Shahrzad Mobasher Fard (“appellant”) purchased three condominium units numbered 2312, 3512 and 4111 in a condominium building to be constructed on property known municipally as 488 University Avenue, Toronto (“units”) from Amexon Property Development Corporation (“vendor”) by taking assignments of agreements of purchase and sale (“APS”) signed in 2014 and 2015.
2In 2019 and 2020 the appellant agreed to purchase the units on the terms set out in the APS when she took assignments of the APS for unit 2312 from Mohammad Rizwan, for unit 3512 from Walid Ali Salem, and for unit 4111 from Munirali Saiyed.
3The appellant took occupancy of the units on October 18, 2019.
4In May, 2020, the appellant claimed compensation from Tarion Warranty Corporation (“Tarion”) out of the guarantee fund for delay in occupancy of all three units (“appellant’s claims”) under s. 14(3) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”).
5The appellant’s claims were denied by Tarion in three separate decision letters dated March 22, 2023 (“Decision”) under the Act.
6Tarion’s position is that occupancy of the units was given on their respective Firm Occupancy Dates and, as a result, the appellant is not entitled to delay compensation under s. 7 of the Addendum attached to each APS.
7The Tribunal’s May 30, 2023 Case Conference Report and Order ordered that all three appeals be heard at the same time.
ISSUES
8The issues to be decided in this hearing are:
Whether the appellant is entitled to receive payment out of the guarantee fund for a delay in occupancy of the units under s. 14(5.0.3) of the Act, and
If so, whether the appellant may claim her costs and compensation for the time she has expended in the pursuit of this appeal.
RESULT
9Having considered all of the evidence, and for the reasons that follow, the appellant is not entitled to receive payment out of the guarantee fund for a delay in occupancy of the units under s. 14(5.0.3) of the Act. No costs are awarded to the appellant.
ANALYSIS
The Delayed Occupancy Warranty
10The legislative basis for the delayed occupancy warranty (the “Warranty”) is found in the Act, O. Reg. 165/08 (the “Regulation”) and the Addendum to the APS.
The Act
11Section 13(1)(c) of the Act provides that every vendor of a home gives to the owner, among other things, such other warranties as are prescribed by the regulations. Section 14(5.0.3)(a) of the Act provides that, subject to the Regulation, a person who has entered into an APS to purchase a home from a vendor is entitled to receive payment out of the guarantee fund for a delay in occupancy of the new home as determined by the Regulation or under s. 14(5.0.3)(b) a delay in closing the agreement of purchase and sale, as determined by the Regulation.
The Regulation
12The Regulation incorporates the appropriate Addendum into the APS. Section 8(1)1. of the Regulation requires the vendor to ensure that the parties complete the appropriate Addendum when the transaction involves the purchase of a condominium home in a condominium project which is or will be registered under the Condominium Act, 1998.
The Addendum
13Here, because the units were sold with tentative occupancy dates, under s. 8(1)1.i. of the Regulation, the appropriate Addendum to be attached to each APS is the 2012 Condominium Form (Tentative Occupancy Date) with the heading “Statement of Critical Dates – Delayed Occupancy Warranty” (the “Addendum”). The Addendum was attached to all three APS and formed part of the APS as expressly stated in the Addendum.
14Section 8(2) of the Regulation sets out the Warranty for delayed occupancy. The vendor warrants to comply with s. 7 of the Addendum titled “Delayed Occupancy Compensation”. Section 7 of the Addendum includes a warranty to compensate the purchaser if occupancy is delayed beyond the Firm Occupancy Date, other than by mutual agreement or as a result of unavoidable delay.
15The Addendum provides, in paragraph 2 on page 1, that changing an Occupancy date requires proper written notice. It provides that a Tentative Occupancy Date may be extended one or more times by the vendor giving 90 days written notice to the purchaser. According to the Addendum, occupancy may occur within a range of possible dates, subject to the Outside Occupancy Date, provided that a minimum of 90 days notice is given to the purchaser.
16The Addendum provides, in s. 14, pages 8-9, that notices may be given personally, sent by email, fax, courier or registered mail to the appellant and to the vendor, that notice will be deemed to be given and received on the date of delivery or transmission if given personally or sent by email or fax (or the next Business Day if the date of delivery or transmission is not a Business Day), on the second Business Day if sent by courier, or on the fifth Business Day following the date of sending if sent by registered mail. The Addendum provides for a party to send written notice of their change of address, fax number or email address to the other party.
17Failure of the vendor to give subsequent 90 days written notice converts the Tentative Occupancy Date to the Firm Occupancy Date in accordance with the following:
18Section 1, page three, of the Addendum describes how the Tentative Occupancy Dates and the Firm Occupancy dates are set:
(c) Subsequent Tentative Occupancy Dates: The Vendor may extend the First Tentative Occupancy Date, on one or more occasions, by setting a subsequent Tentative Occupancy Date. The Vendor shall give written notice of any subsequent Tentative Occupancy Date to the Purchaser at least 90 days before the existing Tentative Occupancy Date (which in this Addendum may include the First Tentative Occupancy Date) or else the existing Tentative Occupancy Date shall for all purposes be the Firm Occupancy Date. A subsequent Tentative Occupancy Date can be any Business Day on or before the Outside Occupancy Date.
(d) Final Tentative Occupancy Date: by no later than 30 days after the Roof Assembly Date, the Vendor shall by written notice to the Purchaser set either (i) a Final Tentative Occupancy Date; or (ii) a Firm Occupancy Date. If the Vendor does not do so, the existing Tentative Occupancy Date shall for all purposes be the Firm Occupancy Date. The Vendor shall give written notice of the Final Tentative Occupancy Date or Firm Occupancy Date, as the case may be, to the Purchaser at least 90 days before the existing Tentative Occupancy Date, or else the existing Tentative Occupancy Date shall for all purposes be the Firm Occupancy Date. The Final Tentative Occupancy Date or Firm Occupancy Date, as the case may be, can be any Business Day on or before the Outside Occupancy Date. For new APS signed after the Roof Assembly Date, the Vendor shall insert in the Statement of Critical dates of the APS either: a Final Tentative Occupancy Date; or a Firm Occupancy Date.
19Section 7, page six, of the Addendum sets out the Warranty as follows:
(a) The Vendor warrants to the Purchaser that, if Occupancy is delayed beyond the Firm Occupancy Date (other than by mutual agreement or as a result of Unavoidable Delay as permitted under s. 4 and 5) then the Vendor shall compensate the Purchaser up to a total amount of $7,500.00…” for living expenses of $150.00 and other expenses incurred by the Purchaser due to the delay.
Right of Appeal to the Tribunal
20When Tarion makes a Decision, the claimant may appeal the Decision to the Licence Appeal Tribunal (the “Tribunal”).
21After holding a hearing under s. 14(19) of the Act, the Tribunal may order Tarion to take the action that the Tribunal considers Tarion ought to take in accordance with the Act and the Regulation, and may substitute its opinion for that of Tarion. The Tribunal owes no deference to Tarion’s Decision.
22Although the Act is consumer protection legislation and should be given a liberal interpretation, the onus is on the appellant to prove on a balance of probabilities the elements of the Warranty have been met.
Facts Not in Dispute
23Here the facts are not in dispute. The parties submitted agreed statements of fact and joint books of documents for each unit. The relevant facts are as follows.
24All APS were signed by the vendor and purchaser in 2014 and 2015. The Addendum is attached and forms part of each APS. The assignment agreements expressly provide that the appellant assumed the purchaser’s position when she took assignments in 2019 and 2020. Each of the three separate Addendum provides:
(i) the First Tentative Occupancy Date is November 1, 2017
(ii) the Outside Occupancy Date is April 29, 2022
(iii) changing an Occupancy Date requires 90 days written notice to the purchaser
(iv) the vendor may, without the purchaser’s consent, delay Occupancy one or more times in accordance with s. 1 of the Addendum and no later than the Outside Occupancy Date
(v) The vendor gave the purchaser many written notices of at least 90 days setting a changed Tentative Occupancy Date
(vi) The vendor’s final written notice about occupancy on unit 2312 was July 8, 2019 (95 days notice) and on units 3512 and 4111 was July 9, 2023 (94 days notice)
(vii) the Roof Assembly Date was August 15, 2019
(v) Occupancy was given to the purchaser on October 18, 2019 on all units
(vi) Final closing of the units was May 13, 2020
25On May 29, 2020 the appellant submitted a claim to Tarion for the Warranty.
Positions of the Parties
Appellant’s Position
26In summary, the appellant submits that the builder failed to provide notice of a Firm Occupancy Date as required but that it did set a number of Tentative Occupancy Dates during construction. The appellant submits that according to the clear meaning of the Act and regulations occupancy was delayed and, as a result, the appellant is entitled to a payment of $7,500.00 out of the guarantee fund for each of her three units.
27The appellant also submits that Tarion failed to apply the regulations under the Act and instead has made its own interpretation of the regulations which are inconsistent with the Act. The appellant also submits that Tarion is “conflicted” by which she means that Tarion has preferred the position of the builder over that of consumers like her.
28Specifically, the appellant submits that Tarion is incorrect in its conclusion that:
(i) The Tentative Occupancy Date became the Firm Occupancy Date because the builder failed to provide a notice with the Roof Assembly Date, and
(ii) The Tentative Occupancy Date is treated as the date of occupancy unless another notice is provided setting a new Tentative Occupancy Date
(i) The Tentative Occupancy Date became the Firm Occupancy Date because the builder failed to provide a notice with the Roof Assembly Date
29The appellant submits that Tarion is incorrect in concluding that the Firm Occupancy Date was established automatically based on the builder’s failure to provide a notice pertaining to the Roof Assembly Date under s. 1(d) of the Addendum. She argues that this is a misinterpretation of s. 1(d) and is inconsistent with the regulations under the Act as it suggests that the builder had the option of providing a notice for the Roof Assembly Date and, since it failed to provide that notice, the existing Tentative Occupancy Date automatically became the Firm Occupancy Date under Tarion’s Registrar Bulletin No. 06C. She says this Bulletin is very clear in terms of the builder’s obligation to provide a notice of the Roof Assembly Date, as follows: “No later than 30 days after completion of the roof slab, or the roof trusses and sheathing of the building, as the case may be, the builder must give written notice to the purchaser of the Final Tentative Occupancy Date.
30Therefore, the appellant asks “How can a home purchaser consider an existing Tentative Occupancy Date as the Firm Occupancy Date if the Vendor failed to provide a notice with the Roof Assembly Date?” The appellant submits that the builder failed to provide a notice with a Roof Assembly Date and to establish a Firm Occupancy Date because the roof assembly was completed August 15, 2019, only 64 days prior to the occupancy date of October 18, 2019. This means that the builder would have failed to meet the 90-day written notice requirement of the Firm Occupancy Date.
31The appellant submits that the correct interpretation of s. 1(d) is that the vendor is obligated to provide a notice within 30 days of the Roof Assembly Date. If the vendor fails to change critical dates in the notice related to the Roof Assembly Date (which would imply changing critical dates from Subsequent Tentative Occupancy Date to either (i) Final Tentative Occupancy Date or (ii) Firm Occupancy), then the existing Tentative Occupancy Date would be considered a Firm Occupancy Date. Since the notice of the Roof Assembly Date was never provided by the vendor, the change in critical dates from Subsequent Tentative Occupancy to Firm Occupancy Date could not be automatically established. A Firm Occupancy Date was consequently never established, even automatically.
32Further, the appellant submits that page 10 of Tarion’s Registrar Bulletin provides only two other circumstances in which a Firm Occupancy Date may be set automatically which are firstly, if the builder fails to give a full 90 days written notice for the first extension, then the First Tentative Occupancy Date becomes the Firm Occupancy Date; and secondly, if the builder exercises the first extension properly but fails to give a full 90 days written notice for a subsequent extension, then the current Tentative Occupancy Date becomes the Firm Occupancy Date. The appellant argues that, given that the builder’s subsequent extension notices were sent with a 90 day written notice, a Firm Occupancy Date could also not be set automatically.
(ii) The Tentative Occupancy Date is treated as the date of occupancy unless another notice is provided setting a new Tentative Occupancy Date
33The appellant submits that Tarion is incorrect in concluding that the Tentative Occupancy Date provided by the vendor under the Addendum is treated as the date of occupancy unless another notice is provided setting a new Tentative Occupancy Date of October 18, 2019 in accordance with s. 1.c) and occupancy was provided on that date and that Tarion is incorrect in concluding that there is no additional written notice requirement that would result in entitlement to Delayed Occupancy Compensation. The appellant submits that Tarion is incorrect because as stated in the Decision, the builder provided at least 90 days notice before the existing Tentative Occupancy Date for all of its notices.
34In summary, the appellant submits that since a delayed occupancy is established relative to a Firm Occupancy Date, the fact that the builder failed to provide a Firm Occupancy Date here, and a Firm Occupancy Date could not be set automatically, any of the Tentative Occupancy Dates, including the first Subsequent Tentative Occupancy Date of July 2, 2018, established by the builder can be considered as the Firm Occupancy Date. The appellant submits that because there are 474 days between July 2, 2018 and October 18, 2019, this would lead to a delayed occupancy claim of 474 days at $150.00 per day for a total of $71,100.00. Since delayed occupancy claim is capped at a total of $7,500.00, the appellant claims $7,500.00 plus costs.
Tarion’s Position
35In summary, Tarion’s submits that since the builder did not give notice of the Firm Occupancy Date 90 days before the tentative occupancy date, the Tentative Occupancy Date becomes the Firm Occupancy Date. Here, the appellant was given occupancy on the Firm Occupancy Date and, as a result, there was no delay in occupancy and no entitlement to payment of $7,500.00 out of the guarantee fund for each of the appellant’s three units.
Issue 1: Appellant is not entitled to Payment out of the Guarantee Fund for a Delay in Occupancy under s. 14(5.0.3) of the Act
36For the following reasons, I find that the appellant has not established that she is entitled to payment out of the guarantee fund for a delay in occupancy under s. 14(5.0.3) of the Act.
37Under s. 7 of the Addendum, the Warranty applies only if “…occupancy is delayed beyond the Firm Occupancy Date (other than by mutual agreement or as a result of Unavoidable Delay)…”.
38The vendor provided occupancy of all three units to the appellant on October 18, 2019 according to the Certificates of Completion and Possession. This was well prior to the Outside Occupancy Date of April 29, 2022 set out in the Addendum and was more than 90 days from the final notice from the vendor dated July 8 or 9, 2019.
39The final occupancy notice from the vendor states “In accordance with the provisions of your Agreement of Purchase and Sale, we hereby give you notice that we are extending the Tentative Occupancy Date to October 18, 2019”.
40It is clear from a plain reading of the Addendum, in the absence of any subsequent notice from the vendor extending the Tentative Occupancy Date beyond October 18, 2019, that October 18, 2019 became the Final Tentative Occupancy Date in accordance with s. 1(c) on page 3 of the Addendum which provides “…The Vendor shall give written notice of any subsequent Tentative Occupancy Date to the Purchaser at least 90 days before the existing Tentative Occupancy Date…or else the existing Tentative Occupancy Date shall for all purposes be the Firm Occupancy Date.”
41As a result, October 18, 2019 became the Firm Occupancy Date. It was also in fact the actual occupancy date. Given that occupancy was not delayed, I find the appellant is not entitled to the Warranty claimed, Delayed Occupancy Compensation.
42Although the appellant submits that the vendor failed to give a roof assembly notice, I find that this does not result in the appellant’s entitlement to the Warranty.
43The effect of the vendor not giving a roof assembly notice is specified in the Addendum. The effect is not that the appellant is entitled to the Warranty. Instead, paragraph 1, page 1 of the Addendum provides that “by no later than 30 days after the Roof Assembly Date (as defined in section 12), with at least 90 days prior written notice, the Vendor shall set either (i) a Final Tentative Occupancy Date; or (ii) a Firm Occupancy Date.” Further requirements are set out for purchase agreements signed after the Roof Assembly Date which are not applicable here as the APS here were signed in 2014 and 2015.
44Tarion concedes in its Decision that the Roof Assembly Date was August 15, 2019 and that the vendor did not provide written notice within 30 days to set either a Final Tentative Occupancy Date, or a Firm Occupancy Date pursuant to s. 1(d) of the Addendum.
45Given these facts however, on a plain reading of s. 1(d) of the Addendum, the outcome of a vendor not providing a roof assembly notice is that “If the Vendor does not do so, the existing Tentative Occupancy Date shall for all purposes be the Firm Occupancy Date.” The Warranty and the appellant’s entitlement to it are not affected.
46This is consistent with a purposive reading the Warranty provisions in the Act, the Regulation and the Addendum. The purpose of the Warranty is to compensate purchasers whose occupancy has been delayed beyond the Firm Occupancy Date. Once a Firm Occupancy Date has been set, absent agreement or unavoidable delay, the vendor must give occupancy of the units on the Firm Occupancy Date.
47Here the Firm Occupancy Date was October 18, 2019 and the appellant was not delayed in obtaining occupancy on October 18, 2019. As a result, the appellant is not able to claim the Warranty.
48As a result, I find that the appellant has not met her onus to establish that she is entitled to payment out of the guarantee fund for a delay in occupancy of the units under s. 14(5.0.3) of the Act.
Issue 2: Appellant is Not Entitled to Costs
49The appellant did not succeed in her claim for entitlement to receive payment out of the guarantee fund for a delay in occupancy of the units under s. 14(5.0.3) of the Act.
50Even if the appellant had been successful in her appeals, I would not have awarded costs to the appellant. I am not satisfied that Tarion’s conduct has risen to the level of acting unreasonably, frivolously, vexatiously or in bad faith as required by Rule 19 of the Licence Appeal Tribunal Rules for a costs award to be made.
51No costs are awarded to the appellant.
Conclusion
52I find that the appellant is not entitled to receive payment out of the guarantee fund for a delay in occupancy of the units under s. 14(5.0.3) of the Act.
ORDER
53For the reasons set out above, pursuant to section 14(19) of the Act, I direct Tarion not to pay any of the appellant’s Warranty claims for delayed occupancy of these units. No costs are awarded to the appellant.
Released: August 24, 2023
__________________________
Avril A. Farlam
Vice-Chair