Finally The Conventional Media Seems To Be Taking A Closer Look At Ontario’s New Home Warranty Program “Tarion”


It is quite possible that the conventional Press has been reading my blogs about the ugly underbelly of Condoland.

If you are not a frequent reader, you may want to “search Tarion” on and you will see that I’m not a fan of this superficial Warranty Program.

Even a casual look at Tarion (allegedly a “non-profit” but with salaries, bonuses and benefits it really is a fare to call it “non-profit“!) will tell you that it is anything but a “Consumer Protection Program“.

I’ve preached for years now about its Board of Directors being controlled by builders and developers and its adversarial approach to consumers, yet our government allows it to advertise (in a big way) itself falsely as “consumer protection“.

Tarion has been coming under some heat recently but I can assure you that in this “nut house” known as Condoland, “the inmates took over the institution” a long, long time ago.

I’ve referred to various articles recently that seem to clearly expose Tarion for what it is  . . . .  a scam within the scam known as residential pre-sale construction and the accompanying “flawed” construction on which the entire Condoland landscape has been and continues to be built.

Condoland is such an embarrassment that I’ve gave up investing there and/or advising my global investor network to invest there for years now!

Tarion is but a microcosm within the intensely entangled infrastructure that feeds Condoland.

In Tarion, we have a corporation (originally was “Ontario Home Warranty Program“) that is alleged to be a Consumer Protection Warranty, is allowed to be totally blind to public scrutiny, has been known to shield builders and developers, yet somehow be sold to the public as a consumer protection vehicle.

Now, for the record there are some benefits.  If not Tarion would not be in existence, but much like the whole shell game that is Condoland, minimal scrutiny shows what a joke it really is.

For instance, I bought a house in Oakville that has a condo component (the road on which 18 homes are being built) known as a “POTL” (Parcel Of tied Lands) and was required to make an “up front” down payment of $100,000 paid directly to the builder (under Tarion?!  –  normally all your money should go into Trust with the builder’s lawyer’s firm).

The Tarion Warranty does warrant deposits, but in detached houses they insure only $40,000 (40% of the deposit in this case) and in condos they insure only $20,000!

All builders have to be Registered and in good standing with Tarion.

The critical factor in this scenario is that “up until Closing Tarion represents solely the developer or builder“.

The builder pays Tarion for this privilege handsomely.

At “Closing” the builder/developer passes the cost of the Tarion Warranty fully onto the purchaser, but in Tarion’s mind, they still represent the interests of the builder.

I was involved in a buyer complaint with Tarion about floors in her unit and the Tarion representative acknowledged to me when I inquired about who they were advocating for “their client  . . .  the developer“!

So, why do we call it a consumer warranty when it quite effectively protects the developer over the consumer?

You want to understand that Tarion is an insurance company and if you know anything about that industry you know that they don’t aspire “to make you right and/or whole“.

But the perception is that this is what they are there for when the facts clearly show that they are not.

So Today’s Toronto Star carries headlines:  “Ontario Corporation Tarion Spends Millions In Salaries, Advertising, Conferences”

in which even a casual observer/reader will have to admit that “something stinks in Condoland”! 

I’m sorry to have to tell you that from almost forty years in Condoland that “pretty well everything in Condoland stinks”!

I’ve been preaching for someone to do something for decades and no-one seems to take my revelations seriously (the consumers who are being exploited included!).

The article does not say how much Tarion has paid out on consumers behalf, something that would have made the article much more meaningful, but the opaque nature of this registered “non-profit” has been an issue before in the Press, and like the tide, it washes back out to obscurity once the issue loses the headline.

So, where does all that money go, and how much income does Tarion generate.

We still don’t know!

But this Toronto Star article does show us some meaningful information that fully supports my conclusions that something has to be done and it has to be done right now!

Tarion’s CEO (“Howard Bagach“) grabbed $700,000 in 2013 alone and another $3.4 Million between 2008 and 2013!

Tarion is presently under review by former associate chief justice J. Douglas Cunningham.

Only through public financial documents made available in the United States (and not in Canada where it enjoys “Non-Profit Tax Status?!) has the Star discovered any financial records at all on Tarion.

So, “Tarion spent an additional $27 Million on legal costs, travel, advertising, and conferences over the recent 6 year period” according to this article.

So again, how much has actually been paid out protecting the interests of consumers?

The Star quotes Mark Basciano, chair of Tarion’s board of directors, who is also (notably) and president of homebuilder Mountainview Homes, (does “conflict of interest” pop into your mind too?) is quoted in the article about an email, “We are confident that our executive salaries are in line with what other public and private sector organizations pay.”

So again, how much has actually been paid out dealing with consumer protection related issues?

Shouldn’t a “Non-Profit Corporation” be required to comply with full disclosure?

Why the “Tax Exempt Status” (that’s what Non-Profit means!) them!?!?!?!?!

Thanks to documents that Tarion was required to file with the Internal Revenue Service in the U.S., we have a snap shot into how Tarion, a private, non-profit company, operates in some, but not complete detail.

The documents referred to in the Star article, are known as “Form 990s”.

They are informational returns that non-profit corporations must file with the IRS if they have gross receipts or total assets over a certain amount.

Now here’s a “kicker“!

They must fill out these forms because “Tarion earned investment income through its holding of U.S. securities in its guarantee fund — used to pay out warranty claims on new homes — the tax-exempt corporation was required to file these forms with the IRS“. (Toronto Star).

Am I reading this correctly?

Tarion takes the money that builders, developers and consumers are required to pay to it under the Warranty Program, and becomes some kind of “investment bank in America“, investing that massive cash-flow into holdings of U.S. Securities!

Now that’s a business I would like to own  . . .   wouldn’t you?

It is abundantly clear that Tarion’s priorities DO NOT rest with warranting consumers in Ontario at all (which has been obvious to me and set out in my blogs for years).

A scam within a scam within a scam  . . . .  within a scam!

And our economy is resting on and hinged to this scam!

Please someone tell me that all these highly paid, highly educated allegedly professional people in our governments ARE NOT INSANE, INCOMPETENT, OR CORRUPT!

So apparently, the Star asked the Ministry of Government and Consumer Services, (Government agency that oversees Tarion), “if it believes the expenses revealed in the documents were a fair use of the organization’s funds“.  (Toronto Star)

Christine Burke, a spokesperson for Government and Consumer Services Minister Marie-France Lalonde, told the Star that “the province is committed to ensuring there are strong consumer protection measures for new homebuyers.”

Although Tarion is a self-financed, independent, administrative authority, we want to ensure that it fulfils its mandate to deliver high quality services that protect consumers,” Burke said in an email. “That’s why we appointed the Honourable J. Douglas Cunningham, QC to review Tarion specifically looking at accountability, transparency and board governance.”

The kicker for me is that the majority of Tarion’s money comes from consumers who it perpetuates an adversarial relationship with, while taking consumers money to run an investment bank in the U.S.!

I find this outrageous and unacceptable!

And the record also shows that Tarion spent the following between 2008 and 2013:

  • $2.7 million on “conferences, conventions and meetings”
  • $4.7 million in “advertising and promotion”
  • $5.7 million in travel expenses  (Toronto Star)

Apparently a comfortable lifestyle accompanies all those big salaries.

And still, Tarion remains totally non-transparent while it enjoys Tax FREE Non-Profit Status!

This is not just an indictment on Tarion.

It is an indictment on the Province Government, the Federal Government, and Municipal Governments and certainly on Condoland itself!

It is time to clean up Condoland once and for all!

I’m Charles


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