Baradaran case reveals issues homebuyers may face

The Ontario Court of Appeal recently dismissed a lower court ruling that held a complainant to be a “vexatious litigant” and dismissed his action in Baradaran v. Tarion Warranty Corporation, 2014 ONCA 597 (CanLII).

Manoucher Baradaran had purchased a new home in which he felt there were several defects that should have been covered by Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, which allows compensation to new homebuyers for a breach of warranty on a variety of defects and problems.

Tarion rejected 44 out of 45 of the homeowner’s claims for defects, either on the basis that they were not warranted or that they could not confirm that the cause of the defect was warranted. The issues were brought before the province’s Licence Appeal Tribunal, some of which the tribunal found to be unfairly denied, and some of which were accepted by Tarion prior to the action.

The homeowner brought a claim to the Ontario Superior Court for damages, to which the builder and Tarion responded with a claim of “vexatious litigation.\” Justice Thomas J. McEwen held that the homeowner was a vexatious litigator and dismissed his appeal on the basis that it was the same action that had been brought before the tribunal.

The Court of Appeal found that the claim for damages, while depending on the breaches of warranty, was in fact about how Tarion and the builder handled the situation with the homeowner, and allowed the homeowner to pursue his claim.

As the outcome of the claim for damages has not yet been decided, this could end up as a strong case for the rights of homebuyers. As yet, this case still stands as an example, warning of the issues that homebuyers can face. Homebuyers need to be aware of their rights. Many people think that purchasing a new home will avoid many of the defects that can come from purchasing older and potentially outdated homes. However, as we can see in this case, there are a number of problems that can arise in a new home.

There is legislation in place to protect new homebuyers and there are remedies should they be faced with problems. While this case is an example of a problem a homeowner can encounter with the Tarion Warranty program, this case also shows that there are remedies in place should there be a dispute. The homeowner in this case received remedies on his warranted defects from the tribunal, and may yet receive compensation for the actions of Tarion and the builder that required going to the tribunal in the first place.

With the purchase of new homes, as well as existing homes, a buyer is always advised to get legal assistance from an experienced real estate lawyer. A real estate lawyer can help homebuyers interpret the contracts for the new build or condominium, help with mortgage documents and the property transfer, and will know what rights the homeowner has if they have problems after the purchase of their new home.