The Tarion Warranty Playbook: Setting your claims up for success!

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Transcript

SPEAKER_03 0:00

Thank you so much for tuning in to the Condo Pod. Welcome to the Condo Pod. Brought to you by the Canadian Condominium Institute Eastern Ontario chapter. From governance and legal updates to maintenance, management, and community living, the Condo Pod tackles key issues affecting our condominium community. Whether you are a condo owner, director, or industry professional, you will find insights, stories, and expert advice to help you navigate the world of condominiums with confidence. We are diving into the topics that matter most to condo owners, directors, and professionals across the region. So on that note, let's dive right in. If you are not yet a member of CCIE Eastern Ontario, don't forget to join us. For more information about how you can become a member, click the link below in the show notes. Today we are starting a three-part mini-series, a topic that affects all condos at one time or another in their lifespan. The Ontario New Home Warranty Program, otherwise known as Tarion. And today I have two fantastic guests who know this process or program inside out, backwards, forwards. They're going to help us be guided through all of the various key issues that we need to be thinking about over this three-part series. The first one we're going to talk about are just getting to know Tarion. What are the best steps you need to take to set yourself up for success? Next, what are all the hot topics? What's going on in the industry today? And finally, the conciliation and post-conciliation process. That's just a little teaser of what's to come. Okay, let's get to know our guests a little bit better. First, we have Evan Lloyd, condominium manager and director of strategy and partnerships at Sentinel Property Management. As a former scientist turned manager, I think Evan knows how to dive into those little details and doesn't miss any of them. He looks at things with a critical and analytical eye. And I think he loves the Terrion process, maybe. Do a little bit. A little bit.

SPEAKER_02 1:51

Thanks, Nancy.

SPEAKER_03 1:52

Another one who loves the Terrion process, or at least has been living with it for many, many years. Christy Allen, founding partner of Davidson Who Allen, serving the condo industry and acting exclusively for condominium corporations through the Terrion process for over two decades. I think Christy is the most seasoned lawyer for condos in dealing with Tarion in Eastern Ontario. Evan Christy, thank you so much for being here today. Let's jump into our first hot topic: the introduction to Terrion, setting yourself up for success right from the get-go. What do we need to be thinking about in this process? Do you want to start?

SPEAKER_02 2:26

Sure, I can take us off. I guess from the very beginning of this process, you're you're really looking at it before the process even begins. And that's before the turnover meeting, before the condominium is even registered. From the manager's perspective, depending on where you come on board in this process, you may you may be managing the condo on the behalf of the declarant. So you have an opportunity to see the building as it's being completed. You may also be coming on board at the turnover meeting or just after the turnover meeting, in which case you're trying to find documents, you're you're learning the building and you're trying to get up to speed as quickly as you can before you have to make that initial filing to Tarion.

SPEAKER_03 3:08

Fabulous. And I guess for those of you or for those of us who may not know really what does Terion do? What is Tarion? Should we give a little bit of a Tarion 101, Christy?

SPEAKER_01 3:21

Sure. Uh so Tarion is uh the um agency that administers the Ontario New Home Warranties Plan Act. Uh so the warranties that are provided, the statutory warranties that are provided to all new homeowners in Ontario, are provided pursuant to this act, and Tarion is the agency that administers the plan. Um, so any warranty claims that are made are made to Tarrian, and then Tarion is the ultimate decision maker with respect to warranty coverage when claims are made.

SPEAKER_03 3:50

So is the the guiding or binding document for Tarion then is the Ontario New Home Warranty Plan Act? That's correct. That's what we go back to on each stage.

SPEAKER_01 3:59

Exactly. And it's yeah, so that's the act that governs the um uh the program. Uh the documents that are helpful are going to be more found in the regulations and what tarion refers to as its builder bulletins, which set out its processes that it follows.

SPEAKER_03 4:17

Okay, and I think we're gonna go through some of those a little bit later on.

SPEAKER_01 4:20

Yeah.

SPEAKER_03 4:21

Okay, so let's go backwards then a little bit. So now we know what Terrion is. We know that from the day the condo was born, Terrion is important. What are our very first deadlines? I guess that we need to be thinking about. What are the first deadlines?

SPEAKER_02 4:38

Yeah, so I guess for from my end, that that first performance audit. So the first performance audit uh that the condominium corporation will file uh is due um by the anniversary of the condominium corporation's registration at land registry. So you have one year until um that anniversary to you know hire consultants, um, complete uh complete some reviews and and an audit of the building, and then compile a list of deficiencies that you would then submit as part of a performance audit to Tarion for that first year claim. And there's different different claims you can make as well and different coverage levels. And I think, you know, we'll talk a little bit more about that later, but you have your one year, your two year, and your and your seven year.

SPEAKER_03 5:30

Okay, so who takes care of this process? Who's in in charge of getting the performance audit done, of filing it with Tarion? What are who are the key people here?

SPEAKER_02 5:41

Go ahead.

SPEAKER_01 5:43

Uh so um the the key uh aspect of the first year your claim is the performance audit, as Evan mentioned. Um, the performance audit is something that is uh also driven by statute. It's covered by the condominium act. Um the requirements uh for the performance audit are dictated by the condominium act, and that requires that uh an engineer, an architect, somebody else who's professionally qualified to complete the performance audit. Typically it's going to be an engineer or an architect who does the performance audit. Um, and that has to be done between the six-month and 11-month uh mark from the date of registration of the condominium. So going back to Evan's earlier comment, the date of registration is pretty key to the entire process. Everything sort of flows from that.

unknown 6:34

Yeah.

SPEAKER_02 6:35

Yeah, your claim timeline flows that way. And it's interesting too. I find it interesting at least that the condominium act says that the performance audit um will not be conducted earlier than six months and no later than 10 months, and that you file it by the 11th month. But Terrion will take it up to the first anniversary. So the condominium corporation should file before the end of the 11th month or before the beginning of the 11th month, I'm sorry. And then you can file addendum after that. So if there's something that comes up that wasn't captured in that initial submittal, you can add on to it. And you can you can file and um make as many submissions as you as you like for that first year. And then once you hit that anniversary and Terrion accepts the uh performance audit, it'll all be compiled into one claim or one one audit, and then every line item is a separate claim within within Tarion's filing.

SPEAKER_03 7:26

Oh, that's interesting. So you as long as you meet that first deadline, multiple addendums end up getting compiled into one.

SPEAKER_02 7:33

Could, yeah.

SPEAKER_03 7:34

Well, I think that's really an important practical point too, because we all know the industry is busy, engineers are busy. So it could be that in that four-month time frame between six months and ten months, you you really only have a chance to look at, I don't know, 80% of the items, get that filed in. Use that extra time to look at the other 20% of the items and make sure that you've got a complete submission of everything that could be going on in the building. Would that make sense? Yeah. Yeah.

SPEAKER_01 8:00

Yeah. I think the other thing to keep in mind um for, you know, usually more complex uh projects is that not everything is going to even be completed within the first year in terms of construction. So there could be further uh first year claims in the sense that um we'll say that a swimming pool is part of the project, but it's not completed until later, much later after creation of the condominium corporation. Its first year warranty won't start until it's actually available for occupancy. Um so all of these timelines need to be tracked, which is uh not an easy feat for managers like Evan.

SPEAKER_02 8:36

Yeah, your calendar becomes your best friend, be it in Outlook or Gmail or whatever you use. But yeah, it's it's really important, even if you have assets that are incomplete, that you put that on your performance audit. And your your engineer, your architect could just say, you know, that like the pool, for example, still under construction. That's still that's still warranted. Like that, that is still something Terrian will accept. Right. And the condominium corporation may run into trouble down the line if it's not noted in that first submission.

SPEAKER_03 9:06

So note the component in the first submission, but then your one-year deadline won't start to track until it's ready for use or until it's completed. Typically. Typically. I think the thing there's always a typical in here somewhere.

SPEAKER_01 9:19

Nothing is nothing as black and so much nuance to this.

SPEAKER_02 9:22

Yeah.

SPEAKER_01 9:22

There's a lot of nuance because there's what the act says, the Ontario New Home Warranties Plan Act, and its regulations, but then there's a lot that's not specifically covered by that. And so that's it's like the gray area that Tarion sort of fills in with its policies that you may or may not, like they may or may not be published and available to homeowners. So you're just sort of being guided by the claims representative and and what's required for the particular um item. But there's definitely a lot of nuance, which I think is why it really is important to have people working on your Tarion claims that have experience. Um, because this nuance may not be identifiable to everybody, you know, if you don't have experience. And unless the the Tarrion claims rep is bringing something to your attention, you're not going to even know that, you know, you may have additional warranty coverage available, or there might be something that you're supposed to do by a certain deadline that's not explicitly covered by um by the act itself.

SPEAKER_02 10:25

And that can be really challenging for board members. Yeah because they're they are they are volunteers. For a lot of them, this may be their first, their first home. Um, so they not only are are introduced to a condominium setting for the first time, but they're introduced to Terry On uh administering the uh Home Warranty Protection Act. Um, they have two different warranties. They have the warranty for their unit and they have the warranty for the common elements that they then have to get involved in and become knowledgeable of with within months. Uh and for board members as well. This is this is the same time where they're they're learning how to balance a budget, um, dealing with uh the cost of running, you know, a high-rise or a townhouse corporation or anything in between, um, learning about governing documents and the condominium act in general. I mean, this this happens frequently at the beginning of this process with with boards, and that represents its own challenges for managers and for board members alike.

unknown 11:23

Yeah.

SPEAKER_03 11:23

You've got the day-to-day uh onboarding and learning of your brand new board of directors, plus you've got this separate, this separate beast that you have to tackle uh to make sure that you've got everything dotted, T's crossed, and gain that in within a certain specified time frame. So I think I I might have interrupted you guys with some of my questions. There was a mention of a taryon designate role. So what is the taryon designate role? What is that? And and tell me a little bit more about that.

SPEAKER_02 11:50

Do you want me to start? Yeah. Sure. Um, so tarion requires a designate from the developer and from the condominium corporation. Uh, that designate represents those parties. Um, so the developer will appoint someone or set someone to be their designate. Conduminium corporation will do the same. And for the condominium corporation, it may be your manager, uh, it might be one of your board members, it may also be a third-party expert that the corporation decides to retain to represent them in this terrier on warranty process. But that designate is ultimately responsible for ensuring that the condominium corporation meets their statutory deadlines for the filings. So we talked about the importance of getting that first-year performance audit in um by the 11th month and um by the anniversary of registration. That designate is key in making sure that that submittal occurs, um, that uh they they attend and be available and responsible to Tarion as well as the developer for notification of emergency claims and for various other things that could that can go wrong in that first year. Um, and Tarion also will write to them as well as the board president with any questions or any matters that come up for their for their file. Um, so there is a meeting that takes place with Tarion, uh the designate in the boards early on. It's um register bulletin two, I believe is the is the meeting. But at that meeting, Tarion describes the coverages available to the condominium corporation, how the performance audit process works, what uh what conciliation and that post-conciliation period may look like. And most importantly, they set out the deadlines. So Tarion will actually submit a letter to the condominium corporation that that sets out the deadlines for you know the first performance audit, your second performance audit, the builder repair period, the timeline for applying for conciliation, all of that. So it's the designate is kind of the key holder. They're the they're the linchpin in the in the warranty claim, in the performance audit claim with Tarion.

SPEAKER_03 13:51

So we got a designate from the Conimune Corporation, a designate from the declarant. Uh, we have a Tarion representative, we have an engineer or an architect or other licensed individual uh to perform the performance audit. These are people who are gonna be key throughout your process. Uh, other two we might have obviously a manager if they're not already the designate role, board member, uh, and legal counsel.

SPEAKER_02 14:17

Exactly, yeah.

SPEAKER_03 14:18

So we've got seven or eight people that are going to be involved in this process to make sure that it stays on track. Did I miss anybody?

SPEAKER_02 14:26

I don't think so. Thanks. Anybody else on the developer side? Their own team as well.

SPEAKER_03 14:30

That's fair. That's fair. Folks, we do have a little bit of a condo bias in this particular room here today, exclusively working with from the condo side. So we heard from Evan just a few moments ago about the RB2 process. Uh so Christy, can you tell us a little bit about that?

SPEAKER_01 14:45

Sure. So the RB stands for register bulletin. It's a bulletin that's published by Tarion and it uh explains the warranty claim process for condominiums specifically uh for common element claims. Um so it covers the process for making your one, two, and seven year claims. And then it sets out the timeframes in which the builder has to complete repairs. So it's called the builder repair period, and then it also sets out the time frame for requesting conciliation. So it's a sort of a full um, it covers the full gamut in terms of the timeline for uh making and preserving claims by making that request for conciliation, which is a really important uh request.

SPEAKER_02 15:31

Super duper, yeah.

SPEAKER_01 15:32

Super duper work.

SPEAKER_02 15:34

I know we're don't miss the application for conciliation, folks.

SPEAKER_03 15:38

Okay, well, let's talk about that then. It's a super duper important deadline we don't want to miss. And uh so let's go right into then the timelines for each of the warranties, how to make sure that you've preserved them, that you haven't missed anything. Because you do in some cases only get one shot at it, right?

SPEAKER_02 15:53

Do yeah, from my perspective, it's it's it's one and done. Um, I think I think Chris, you can certainly speak to some um legal ass uh legal ways circumstances. Um but yeah, from my perspective, the timelines are set. Um you're notified very early on, as I mentioned earlier, about that that letter that you get as part of that RP2 meeting. So you you have those dates. They're they're set out for you. Um there are extraordinary circumstances, which uh Christy, I'm sure, will touch on, but um those are meant to be extraordinary. So simply missing the date because you forgot to make a submission or because you forgot to apply for conciliation, that is problematic for the condominium corporation. Should you miss um your deadline, Tarion will view that all remaining defects in or all remaining claims in your submission are withdrawn.

SPEAKER_03 16:48

Okay, let's pause there. I think that's a really important point that we might want to hammer home today. If you have a thousand items on your performance audit and they're in progress, some of them, still working on them. But if you miss your conciliation deadline, they will deem to have been withdrawn. Correct. That's a super duper, that's a super duper miss if we miss that.

SPEAKER_01 17:12

Okay, that's really important.

SPEAKER_03 17:14

Okay.

SPEAKER_01 17:14

Yeah, definitely don't want to miss it. Um uh the so we talked about the first-year warranty claim process, filing the performance audit and the time frame for that. Uh, there's a a two-year warranty as well, um, which provides still some really important coverage, um, mainly over building envelope leaks, uh, mechanical and electrical systems. Um, so really important. Uh there's not a unlike the first-year process, which involves the performance audit, there's no similar process specified for the making a second-year claim. So that's done. Uh, that can still be done through your engineer. And in fact, I as uh a law firm, we typically recommend for our clients to complete a second-year performance audit and then submit that as their second-year claim. It's not required. Uh, you can submit second-year claims sort of ad hoc, but it's still necessary to make the claim in order to preserve it. Um, once the two-year anniversary comes and goes, there's a remaining, there's a builder repair period that still exists for another six months. And then after that is when the conciliation request has to be submitted. And there's a window. Um, I think it's 60 days.

SPEAKER_02 18:26

I wanted to say it was 30.

SPEAKER_01 18:28

Maybe it's 30 days.

SPEAKER_02 18:29

I'll check as we chat.

SPEAKER_01 18:30

It's a very short window. Uh, the Taryan designate will receive notices from Taryan of the particular deadline, and it should be definitely underscored and highlighted and and not missed. And Nancy, to your point, if uh you're working with the builder, if the condominium is working with the builder to try to resolve items until they're actually resolved or there's an agreement in place confirming how the items are going to be resolved. And by in place, I mean signed, sealed, and delivered, not just discussing it, but actually in place, don't miss that deadline because that's the only um, it's really the only uh thing you've got in order to force the issue. If you don't request conciliation and items are being discussed for resolution, in theory, the builder could sort of just withdraw from those. I'm not suggesting that would happen, but in theory, they could just withdraw from those discussions and that would be it for the condominium corporation. It would have no recourse. So once the request is made, those discussions can continue. They can continue all the way up until conciliation, um, which doesn't happen for some time after the request is made. So uh it's really important not to be derailed from making the request for conciliation simply because there's ongoing discussions. Those can continue, as I said, and then the request for conciliation can be withdrawn.

SPEAKER_03 19:54

I guess this is also uh a really important reason why you want to make sure that you have people who are very familiar with this process in your camp at this stage, whether it's somebody, uh manager, legal counsel, engineer, architect, whoever it is that's going to be assisting the corporation through this particular uh series of events. Once you get to this conciliation phase, or or just pre, I guess, conciliation, pre-request conciliation phase, if we don't have people in the know working with con man corporations, they could be persuaded not to file a conciliation. Again, not suggesting anybody's doing this on purpose, but it could be others who are new to the process as well, saying, oh, look, we're working on this. For example, if we're in a court proceeding, often we would not move towards trial because we're working on a settlement discussion, we're working on offers, we're working on some sort of resolution. So we put that off. In the Terry On process, even if we're working together to try and resolve, do not be persuaded not to go to conciliation because then you shot yourself in the foot.

SPEAKER_02 20:59

Yeah, that's it. And I mean, it uh to highlight the request for conciliation period is 60 days. So you do have a fair bit of time to do it. However, as the three of us know, time slips by quickly. Yeah. Um so if it's not highlighted in your calendar, you very well could miss it because you have everything else going on as well while dealing with this performance audit process. And it's it's not it's it's not cheap, but it's not expensive either when you look at it in terms of a total, the totality of the corporation. It's about a thousand dollars plus HST to uh file for conciliation. And it's some of the it it's it's the best thousand dollars the economy and corporation will spend in its lifetime just to preserve the claim. Um so much more can happen once you make that request for conciliation and you and you maintain your maintain your warranty. But as we've said, if you miss that, you you've deemed a withdrawn. So at that point, your your your warranty is done. Then the comedy incorporation and the and And its owners have to take on repair, maintenance, and capital expenditure on things that perhaps were a bona fide construction deficiency. Um, but they have no recourse through Tarion or the developer at that point for for any to recoup any funds for the repair for the for the cost of that.

SPEAKER_03 22:18

Okay, we are we have so much to talk about. I think we're already had at about 20 or 25 minutes on just what we've talked about so far this morning. So I think we're gonna turn our first part of this series into an A and a B. So to bring part A of this session to a close, we've we've talked about a various amount of timelines just leading us up to request for conciliation. So let's do a recap of the condo is born, request for conciliation is a little while later. If one of you can just walk us through what are those exact steps or what are the what's the path that would lead us there for part A of our series.

SPEAKER_01 23:00

Okay, so um the this applies to uh like the normal condominium situation, not situated, there's all kinds of anomalies as we talked about that.

SPEAKER_03 23:10

And we're gonna touch on anomalies. So this would be in the ideal world.

SPEAKER_01 23:14

Yeah, in an ideal world, your condominium is complete and it's registered on a particular date. And all the components are complete. Everything's gonna be done. Um so at month six, the performance audit process starts. Um, so at some point in time, turnover is gonna happen. That is not within the control of the condominium corporation. Um, and that can happen at any point in time. So, in theory, we're talking about the board taking on so much when the the new board comes on, they could be walking into a situation where their mid performance audit, like yeah, they really are taking on a significant um uh workload. Um, anyway, uh, so that's sort of to the side. The the new board will come in at any point in time within this process. But condominium is created six months later, the performance audit process starts, um, has to be complete by month 10 and then submitted to Tarium by month 11. At any point from month 10 to month 12, the condominium can submit further um claims, first year claims, if they discover uh new claims. And then at the end of the first year, so on the anniversary of the creation of the condominium, the date of the creation of the condominium, the first year uh warranty claim comes to an end. And then the second year warranty claim starts. Um at that point in time, the a builder repair period will start. So there's going to the performance audit gets submitted to the con or to Terrion. And then as part of that, it's a performance audit tracking sheet.

SPEAKER_02 24:42

Yeah. Um common element performance audit tracking summary or the CPATs.

SPEAKER_01 24:46

Okay.

SPEAKER_02 24:47

And that's a document that both parties get to work on together. Um, it's hosted on Terrion's portal. Um and the designate for the Condomi Incorporation and the designate for the developer will leave comments to each other, notes about deficiencies that have been resolved or things that are being challenged, or hey, I just can't find this thing. Condo, can you help me find it? Um, and that's that system is there for that purpose.

SPEAKER_03 25:09

And that's so we're year uh year two, day one of year two. This tracking sheet gets put into place. That's right. Yeah, and then we also at the same time have year two performance audit items that can be submitted anytime from the beginning of year two to the end of year two.

SPEAKER_02 25:24

Correct.

SPEAKER_03 25:25

Yeah, okay, and then at the end of year two, that is our deadline for conciliation.

SPEAKER_02 25:31

You've got another six months.

SPEAKER_03 25:33

Okay, so give me the exact time frames and an ideal situation for that particular. So we're end of year two.

SPEAKER_01 25:39

What do we have to do at the end of year two? So all second year claims would have to be submitted by that deadline. So that's the important deadline there. Okay. Um, but the builder repair period continues uh for another six months after the end of the second year anniversary. Okay. Um, I say the end of the second year anniversary, the end of the second year or the second year anniversary. Got it. You know what I'm saying? Yeah. Uh six months after that date is um when the builder repair period comes to an end, and that's when the window opens to request conciliation.

SPEAKER_03 26:08

And so then you have 60 days to request conciliation with from that end of that six-month period, you have 60 days.

SPEAKER_02 26:16

Yeah. And then calendar days.

SPEAKER_01 26:18

Calendar calendar days, okay.

SPEAKER_02 26:20

Yeah, okay.

SPEAKER_01 26:21

Tarien has 90 days, I believe, from when the request is made to schedule the actual conciliation. So we're talking about the settlement discussions, those can continue throughout that time. And that's actually an additional builder repair window. Um, so for the cons the items that are on your request to conciliate, um, the builder has a further 90 days to address those before the conciliation takes place.

unknown 26:44

Okay.

SPEAKER_03 26:45

We're gonna get into that in our next part B of our first session. We're also gonna go back to the turnover period. So, folks, thank you so much for tuning in to part A of episode one of our Tarion series. Stay tuned for part B where we're gonna circle back to turnover. We're gonna talk more about that uh conciliation request, post-conciliation, where are we gonna go with that, and a few more hot topics in how to set yourself up for success. And we'll see you soon.

SPEAKER_00 27:12

Thanks for tuning into the condo pod, your source for all things condo in Eastern Ontario. Be sure to subscribe so you never miss an episode. And share this podcast with your fellow condo community. For more resources and upcoming events, visit us at ccieasternOntario.ca. Until next time, stay informed, stay connected, and keep your community strong.