Contractor Designated “Builder” for New Home Warranty Purposes

A contractor had been retained to build a new home on property owned by a couple. As agreed, he performed most of the construction work on the new home, but the owners installed a well and the septic system themselves. Since he had not registered as a builder under the Ontario New Home Warranties Plan Act (the “Act”) he was charged under the Act with violating certain provisions including the one prohibiting anyone from “act[ing] as a vendor or builder” without being registered. He was initially acquitted both before a Justice of the Peace and on initial appeal.

The question for the Court of Appeal was whether the contractor fell within the Act’s definition of “builder,” which encompasses a person who “undertakes the performance of all the work and supply of all the materials necessary to construct a completed home whether for the purpose of sale by the person or under a contract with a vendor or owner.” The court concluded that in giving the Act the necessary fair and liberal interpretation, the meaning of “builder” should be construed to cover those contractors who build a home but leave some of the work to the owner. Indeed, the Act specifically envisions certain circumstances in which owners perform some of the work themselves. From a policy perspective, it is therefore important not to deny such owners their Warranty protection. The contractor was convicted. See Tarion Warranty Corporation v. Kozy, 2012 (ONCA).