Unlicensed homebuilders emerging in Ottawa: regulator

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The organization responsible for administering homebuilding laws on behalf of the provincial government is sounding the alarm about illegal construction in the Ottawa area.

By Mark Brownlee.

Tarion, a private corporation that bills itself as a protector of homebuyers’ rights, is warning local homebuilders about the need to comply with the rules after its investigations led to 69 convictions and $210,730 in fines in 2012 across the province.

In Ottawa, it opened 17 investigations and got two convictions.

The most important decision companies hoping to stay on the right side of the law can make is to go through the proper channels to be designated a legal homebuilder, said Howard Bogach, the organization’s president and CEO.

Most companies have to submit an application, pay a fee and write a test that shows they’re qualified to build.

Firms aren’t allowed to start construction or sign a contract with a customer until they have done so, said Mr. Bogach.

The other area of concern lies with the warranty process. Homebuilders are required to guarantee certain components of a home’s quality for seven years after the project has been completed.

“We act as a surety,” said Mr. Bogach. “The builder provides the warranty and our job is to make sure that the builder lives up to those expectations and resolve disputes between the homeowner and the builder within the warranty process.”

Registering the warranty with Tarion also costs money. Builders can pay up to $1,695 in fees as part of this process.

However those prices are far lower than what companies have to pay if they are found to be breaking the rules.

Penalties for homebuilders that don’t comply can range up to $100,000, according to Tarion’s website. Those convicted of breaking the rules also end up in quarterly reports on the organization’s website.

A Greely man, Darin Burns, was fined $25,000 in 2009 for failing to register homes he was building in Ottawa and Carleton Place. He also left homeowners with less-than-completed houses and didn’t pay some of his tradespeople, according to a Tarion press release.

Mr. Bogach said he’s seen homebuilders try to get around the rules in several ways. This includes signing papers with city hall in such a way as to make a buyer the homebuilder.

Others simply disappear after a home is constructed so they don’t have to live up to warranty obligations.

Ottawa isn’t any worse or better than other cities across the province, Mr. Bogach said