Technical or Performance Audits

Within 10 months after a condo’s registration, the new condo board has to hire an appropriate engineering firm and carry an audit of the condition of the building(s) for the purpose of the New Home Warranty Program (or Tarion in Ontario).

During this audit, all a building’s systems and structural components covered by the warranty act are inspected. The board or manager may point toward areas that need closer scrutiny.

The resulting report will list deficiencies—just as builders do for suite owners after they take possession of their unit. The builder then proceeds to do repairs and adjustments. However, unavoidably, the builder bargains on some issues (the most expensive ones) or refuses to go along on other issues and appeals to the Tarion program. Boards can also appeal and a mediation process may take place.

Therefore, at the end, some deficiencies may remain. Boards may bargain with builders and eventually an agreement is reached. In some cases, in lieu of remedying some deficiencies, builders may pay condos an agreed upon sum of money with which condos will themselves carry out adjustments. This entire process may take years and some corporations end up suing the builder.

Is suing the builder a good idea? Let’s first say that no one should have to sue builders because we should all be better protected by Tarion and the Condo Act. Second, these lawsuits rarely end in court and, when they do, it can be several years after their initiation, perhaps at a cost of over $60,000 or more. Out of court settlements are rarely totally satisfactory and legal fees may remain. All of this represents monies that could have been better spent for the condo itself. Some lawsuits are, however, necessary and the condo’s law firm will advise accordingly.