The information contained in this article was provided by Tarion.

As reported in Edition 17 of the Practice Advisory, Tarion is a not-for-profit consumer protection organization, established by the Ontario government to administer the province’s new home warranty program. By law, all new homes built in Ontario are provided with a warranty by the builder. Tarion’s role is to ensure buyers of newly built homes in Ontario receive the coverage they are entitled to under their builder’s warranty.

Certificate of Practice holders play an important role during the planning, design, and construction stages of a condominium project.

“Common Elements” is a term used in Tarion’s documents to describe the shared areas that form part of the condominium property outside an individual condominium unit. There may also be exclusive-use common elements such as balconies, porches, or backyards that are typically maintained by the individual unit owners who use them.

For most condominiums, warranty coverage is provided for common elements. There is no warranty coverage for the common elements of either a common elements condominium or vacant land condominium. Common elements are described in the Disclosure Documents or the registered Declaration and Description. These documents are unique to each project. Disclosure Documents are included in the Agreement of Purchase and Sale, and the Declaration and Description are finalized upon registration of the condominium.

The following is a brief description of a Certificate of Practice Holder’s involvement in the Tarion condominium common element process.

Tarion’s Underwriting Approval

A vendor/builder is required to have a valid license with the Home Construction Regulatory Authority (HCRA), before they can receive Qualification for Enrolment (QFE) from Tarion, which allows them to sell a new home, and Enrolment Confirmation before they start construction of any home. At this stage, architectural design drawings are typically under way. Zoning and site plan approval may have been achieved already.

With new vendors and builders, Tarion will conduct meetings with the vendor and builder to review the drawings from a risk perspective. At this meeting, the vendor (developer) and builder go over the plans, describe the project, and discuss with Tarion any particular risks associated with the construction. Depending on the project, certain requirements above and beyond Registrar Bulletin 19 (RB19) reporting may be implemented. As an example, a high-water table or poor soil conditions may require additional geotechnical inspection and reporting, or an advanced geothermal mechanical system may result in a third-party commissioning report being required.

A holder may be invited to these meetings by the vendor (developer) or builder. Once approved by Tarion, and when all conditions have been met, sales of units may commence. Tarion also reviews the building code data matrix to determine what Parts of the OBC are applicable; this helps to define whether or not a project requires RB19 reporting. A Certificate of Practice holder may be asked to confirm which Parts of the OBC apply to the project during this stage.

Condominium Conversions

As of January 1, 2018, Residential Condominium Conversion Projects (RCCPs) are protected by warranty in Ontario. As a unique condition of QFE for RCCPs, three reports—Property Assessment Report, Capitol Replacement Plan, and Pre-Existing Element Fund Study—are required to be submitted in accordance with Registrar Bulletin 18. In projects such as this, the holder may be engaged by the vendor to prepare the reports, or a third party may complete them. It should be noted that Registrar Bulletin 19 (described below) is applicable to all relevant conversions, regardless of Part 9 or Part 3 OBC requirements.

Design and Construction

For projects that include OBC Part 3 requirements, the vendor is required to retain a Field Review Consultant (FRC) from Tarion’s approved list to carry out the Registrar Bulletin 19 process. The FRC is a third-party consultant (typically an architect or engineer) tasked with conducting site inspections related to key Risk Areas from RB19. They identify potential risks to Tarion and the vendor/builder, and also collect information from the consultants.

Tarion strongly encourages the vendor to retain the FRC early on in the design process and to include them in the review of the drawings from a risk perspective. More information on the qualification and role of the FRC can be found in Module 1 of the RB19 document.

At a minimum, the FRC is required to be retained and to submit the Module 2A Scope of Work document, from RB19, to Tarion a minimum of 45 days prior to construction.

The FRC will work with the vendor to collect Design Certificates, which all of the key consultants on the project are asked to complete individually. This document lets Tarion know what aspects of the project the Certificate of Practice holder is taking design responsibility for. A copy of the Certificate of Practice, along with valid professional liability insurance, is required to be submitted with the Design Certificate.

Once the RB19 Scope of Work is completed by the FRC, 60-day reports are issued by the FRC to Tarion to capture site activity and potential risks that are being raised. The FRC may also request to be provided access to consultants’ site visit reports. Reporting continues, including four Milestone reports at Sub-structure Complete, Superstructure Complete, Building Envelope 75% Complete, and Building Substantially Watertight, as noted in RB19.

It is a best practice for Certificate of Practice holders to document any deviations from the approved permit drawings in site instructions or change orders, with municipal approval documents where required. Tarion deals with many claims in the warranty process related to unapproved changes and having the appropriate approvals makes the warranty claim review process much easier for Tarion, the vendor/builder, and any other parties.

The reporting by the FRC culminates in a Final RB19 document that is required to be submitted to the new Condominium Board at the turnover meeting. As part of this, a Certificate of Practice holder will be asked to provide a final clearance letter at the completion of construction. In the final clearance letter, they are asked to consider the Risk Areas (as the term is defined in the Certificate) they took responsibility for in the Design Certificate, and whether or not there are any warranty to Tarion exceptions associated with those items.

This clearance can come in the form of a letter, and should include language similar to that found in the confirmation of the review section of the EABO Final General Review Report form. If Risk Areas are determined by the holder to be outstanding, a cost will be associated with the remaining work by the FRC and included in the Field Review Declaration, provided by the FRC to Tarion. In these cases, a partial clearance may be issued, indicating that some of the Risk Areas are okay, and others are not. Tarion will require a revised clearance once they are rectified by the vendor/builder.

As a condition of condominium registration, an engineer or Certificate of Practice holder will be asked to complete a Certificate of Architect or Engineer (Schedule G to Declaration for a Standard or Leasehold Condominium Corporation) document. It should be noted that this document is a requirement of the Condominium Act, and is not a Tarion requirement.

Post-construction / Warranty

As per the Condominium Act the newly formed condominium board is required to hire a Performance Auditor to report on deficiencies in the first year following registration. This Audit becomes a claim to Tarion, and sometimes input from the holder on items reported is helpful. During the Tarion 18-month builder repair period, as outlined in Registrar Bulletin 02, it is possible that a holder may be contacted by the vendor/builder or Tarion from time to time to clarify items that may arise post construction.

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