topbar

Articles

Tarion Not Blamed for Failed Development Agreement

A builder has unsuccessfully sought to blame Tarion for not accepting its late registration renewal, which in turn helped scuttle a development agreement.
 
In connection with 106 lots that it owned, a developer entered into an agreement with the builder: the developer would complete all services and make the lots ready, while the builder would construct the homes in exchange for a portion of the selling price. Eventually, both builder and developer claimed breaches of the agreement by the other, including the developer’s allegation that the builder’s registration with Tarion had lapsed. The relationship between the parties unravelled; the developer barred the builder from the site, claimed the right to retain improvements made by the builder so far, and sued for damages.
 
Among other defences, the builder in turn looked to Tarion for refusing to accept its registration renewal application. The builder had presented it without the required financial statements, and had submitted it five days beyond the Tarion’s deadline (which had already been extended once).
Still Tarion, in a gesture designed to protect one of the home buyers, had gratuitously allowed a “oneoff” registration for that particular lot. On this point, the court concluded,
 
“[t]he fact remained that Tarion's registration had expired. The Registrar's actions, taken to
protect the consumer, could not retroactively revive the registration.”
 
The trial judge found the builder’s failure to file the financial statements was deliberate, because it was subject to a GST audit and faced a hefty fine. Without those documents, the renewal application simply did not comply with the Regulations, and Tarion could not be held liable for the fact that the development agreement subsequently fell apart. See King's Bay Development Corp. v. Cornerstone Custom Homes Ltd., 2009 (ON C.A.).