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COVID-19 and Building Real Estate Back Up

Aug 13, 2020

By Ethan Eisen - Commercial Real Estate Lawyer and Jennifer Glied-Goldstein - Student

Photo of Ethan Eisen - Real Estate LawyerLike almost every industry in Ontario, COVID-19 has had an impact on the real estate industry. Due to work stoppages, material shortages, and governmental delays in issuing construction permits and/or approvals, the COVID-19 pandemic has caused delays in the construction of new builds across Ontario.

In March, the Government of Ontario passed the Emergency Management and Civil Protection Act (Ontario) (the Emergency Order”) and regulations that suspended many limitation periods and procedural timelines for various legislative matters. These suspensions also applied to Tarion Warranty Corporation’s (the “Tarion”) warranty submission timelines, requests for conciliation, and builder repair periods, which remain in effect until September 11, 2020. These have and will continue to affect builders and developers across Ontario.

As the COVID-19 restrictions continue to ease, Tarion will resume in-person inspections and reinstate timelines.

Summary of Updated Timelines from Tarion

Inspections

  • Tarion began scheduling in-person inspections on July 13, 2020.
  • Before an in-person inspection, the homeowner, the builder’s representative, and the Tarion staff must complete the Government of Ontario COVID-19 pre-screening self-assessment tool.
  • In-person inspections will require strict adherence to the health and safety guidelines endorsed by the Government of Ontario, including personal protective equipment and physical distancing.
  • Tarion will work with any homeowner uncomfortable providing access to their home while the Emergency Order is still in place. Options include conducting a virtual inspection, a desk assessment, or postponing the inspection to a future date.

Warranty Claim Submissions

  • Impacted warranty claims include: 30-day, Year-End, Second-Year, Major Structural Defects, delayed closing, performance audits, financial loss, and deposit claims.
  • Homeowners and condominium corporations with warranty claim submissions that were due between March 16 and September 11, 2020, must submit their forms by September 11, 2020.
  • All forms due after September 11, 2020, should be submitted according to their due date.

    Requests for Conciliation

  • Homeowners and condominium corporations eligible to request conciliation between March 16 and September 11, 2020, must submit this request by September 11, 2020.
  • Postponed conciliations will be rescheduled at the earliest date possible.
  • All conciliation fees have been waived since March 16, 2020, and will continue to be waived until the end of the year.

Building Repair Periods

  • On August 27, 2020, building repair periods will be reinstated.
  • Beginning July 13, 2020, builders were given 45 days to remobilize trades, supplies, and staff and organize scheduling before the period is reinstated.
  • For forms submitted before March 16, 2020, builder repair periods will resume on August 27, 2020, at the point at which they were suspended (i.e., if a repair period that was suspended at day 21, the balance of the repair period will resume on August 27, 2020, at day 22).
  • Builder repair periods for warranty forms submitted between March 16 and August 26, 2020, will begin on August 27, 2020.
  • Tarion expects builders to continue to respond to warranty issues related to emergencies and health and safety (such as water penetration, radon, mold, and structural issues) during the remobilization period.

For more information or guidance on any issues regarding Tarion or the effect of COVID-19 on the real estate industry or real estate transactions, contact anyone in our Commercial Real Estate Group or one the authors of this post, Ethan Eisen at eeisen@mindengross.com or Jennifer Glied-Goldstein at JGliedGoldstein@mindengross.com.

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