Consumer education

Providers of consumer education

Homeowners do not always receive sufficient information about key matters of home purchasing and ownership. Sometimes information is not provided in a clear, accessible format that homeowners can readily be expected to understand. These concerns should be addressed.

Consumer education covers a range of matters including:

  • home maintenance
  • the home purchase process
  • the content of the warranty protection
  • the process for submitting a claim and having a defect remedied
  • what can be expected of a product that is built with material that is, by its nature, variable such as the grain of a wood floor, or how humidity in a home affects windows and
  • how to access information and help when things go wrong.

Efforts to address consumers’ need for information across all areas should be enhanced and should be a shared responsibility.

An example of one situation where having the information and background necessary is particularly important to a new home buyer is at the pre-delivery inspection, or PDI. The PDI is important to both the new home buyer and the builder. It establishes the condition of the home at the time the buyer takes possession. The PDI is intended to allow the new home buyer to identify problems and defects in place at the time they take possession. The importance of the PDI is underscored by Tarion, which says “[t]he PDI Form does not represent a request for warranty service, so if you fail to note an item this does not necessarily impact your warranty coverage. However, if the problem concerns a damaged or missing item, it may be difficult to establish that this condition existed before you moved in if it is not noted on the PDI Form.”footnote 1 A new home buyer may not appreciate the difficulties he or she may face in a subsequent claim under the warranty if the item was not initially identified in the PDI.

A home inspector might be able to assist a new home buyer with the PDI but the buyer may not know that they have a right to engage a home inspector to attend with them at the PDI. While the Tarion website does note that a homeowner can have someone attend with them at a PDI, it must be remembered that at this stage, the new home buyer has likely not been dealing with Tarionfootnote 2.

Education will be important to subsequent buyers of homes that are still under warranty. Those purchasers may not be aware of existing warranty protections that still apply to the home. There is no requirement that they receive the Home Owner’s Information Package that the original buyer would have received at the time of the original purchase.

I recommend consideration be given to introducing additional measures to protect successive homeowners. For example, vendors could be obliged to confirm whether there is warranty coverage on the home. Alternatively, it could be a requirement to include a warranty enrolment number for the home as part of the purchase and sale documentation.

Consideration should also be given as to whether successive homeowners should receive information in terms of previous claims, existing claims, repairs made, and what remains on the warranty.

Delivering consumer education

I heard from several individuals that they would welcome the option of having different means of communicating information. Some preferred hard copy while others thought that electronic communication worked well.

Participants from the condominium sector emphasized the need for a more pro-active outreach on the part of the regulator and warranty provider, such as attending condominium board and unit owner meetings. I understand that this was done more in the past. Participants from outside the Greater Toronto Area and larger urban centers saw a need for a more pro-active approach to reaching new home owners generally in those communities.

Support of other sectors for consumer education

Consumer education needs cannot be met by one organization alone. There are opportunities to collaborate with other sectors such as the real estate sector, the lending sector (banks and similar entities as well as private lenders), the legal profession, as well as the organizations that oversee them. Stronger linkages should be in place generally, between the regulator and warranty providers and others participating in new home building and purchasing to support the delivery of consumer education. These include real estate professionals, lawyers, municipal planning and building officials, title insurance providers, and lenders (bankers and private lenders), to name a few.

Consumer advocacy office

Some suggested that an advocacy office be established with a mandate to help consumers with the warranty claims process. It was suggested that this office could assist new home purchasers and owners in navigating the warranty claim process, including supporting homeowners in discussions with the builder and the regulator. It was also suggested that such an office might have an active role in the adjudication process. Others recommended a consumer advisory council with a focus on education.

While there is merit to these suggestions, I believe that the cumulative effect of my recommendations can alleviate many of the problems that are currently being experienced by homeowners, reducing the need for such an organization.

Footnotes