March Madness
ONTARIO NEW HOME WARRANTY PROGRAM ("ONHWP") - NEWS AND RECENT CASES
The ONHWP and Ontario Home Builders' Association ("OHBA") Liaison Committee continues its progress in finalizing a new form of indemnity that builders will be required to sign as a condition for registration with ONHWP. In addition, the Committee is in the process of finalizing changes to Bulletin 19 (dealing with review consultant requirements) as well as to Bulletin 28 (security requirements). Expect to see final versions of the indemnity and Bulletins 19 and 28 soon. For further information, please contact your local Home Builders Association.
Recent Cases involving ONHWP
1. Commercial Registration Appeal Tribunal ("CRAT") decision relating to transition pieces. A recent decision of CRAT was upheld by the Divisional Court. The decision related to a claim of improper workmanship by a Purchaser of a new high rise condominium unit. The claim related to the installation of a reducer used to span a differential of floor heights caused by the different thicknesses of hardwood and tile flooring.
ONHWP had originally rejected the Purchaser's claim that a height drop of 3/4" and a width of 2½" for the reducer was not acceptable workmanship. CRAT eventually sided with the Purchaser and awarded them compensation since it was not satisfied that these type of reducers were common and acceptable based upon industry practice.
At this time, it is not known what ONHWP's position will be for future claims of this nature. Hopefully, ONHWP will continue to support builders in this regard and limit the claims to those situations where the dimensions of the reducer are exactly the same as in the CRAT decision. Presumably even these claims could be defended by use of more cogent third party evidence of industry standards.
It would appear that this height differential issue arises mainly in mid-rise and high-rise condominiums. For those builders selling units in these type of projects, it would be useful to incorporate a clause in the Agreement of Purchase and Sale that advises the Purchaser that there may be height differentials in areas where there are different floorings, such as: "The Purchaser acknowledges and agrees that various types of flooring, such as carpets, marble, tile and/or hardwood floors in the Unit may result in different heights (to be established by the Vendor in its sole discretion) in the transitional areas between them, and that the Vendor may use appropriate reducers in the area". As well, if model units exhibit different flooring, reducers should be incorporated, or Purchasers should be clearly advised that reducers will be used.
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