Are Homeowners' Sufficiently Protected?

The Homeowner Protection Act (HPA) came into effect July 28, 1998. At that time, it was considered to be a first start, a framework with further regulation needed to ensure proper consumer protection. Since the enactment of the HPA little change has occurred to tackle the known inadequacies. Although there are many areas of concern from the consumer's perspective, the following highlights (4) serious issues:

Note: The Homeowner Protection Office (HPO) is currently reviewing the licensing and education of the Residential Construction Industry. CASH Society's October 28, 2005 submission. (Large PDF file)

1.) Insufficient data to verify homeowners are adequately protected

Claims over $25,000 (increased from $10,000.00) are costly, time consuming, filled with obstacles and deter people from using the justice system for repair cost recovery.

Note: Claims under $25,000 can be brought to Small Claims Court. The monetary limits for Small Claims Court have been increased from $10,000 to $25,000 effective September 1, 2005

The HPA provided consumers with the option to mediate - intended to provide a more cost effective alternative to court action. But is it? Legislated mediation, as a dispute resolution, has its own set of flaws. Mediation is not binding on either of the parties and relies on mutual agreement. This can lead to settlements that are much lower than the actual costs of repairs. According to a study conducted in 2001 by the University of BC's Faculty of Law, plaintiffs that demonstrate the ability to take the matter all the way to court, have faired better under the mandatory dispute resolution process. Consider that some leaky condo legal costs have exceeded $500,000 and yet in most of these cases, the owners have recovered substantially less than a 100% of the repair costs.

Settlements (whether mediated or not) are often contingent on confidentiality agreements. In other words, there is no public record of the settlement. Without a transparent public record of the failures, how can buyers adequately determine the track record of a builder?

If a settlement cannot be reached under mediation, court and the costs associated with a legal action can be cost prohibitive. It is common for court dates to be set years after filing an action. There is little or no incentive for defendants to settle when court dates are years away.

A system that limits access, lacks transparency, is costly, time consuming, plagued with delays and obstacles works against consumer protection and shields wrongdoers. Shielding wrongdoers creates an unhealthy competitive atmosphere and ultimately 'a race to the bottom'.

3.) Lack of skilled workers

Shortage of skilled workers and the use of unskilled labour - What does this really mean? Consider that the BC Building Code is thicker than an average dictionary and untrained workers are required to build according to the code. To be a licensed builder under the Homeowner Protection Act you do not require formal training or proof of past competency, evidenced by the fact that many past leaky condo builders are licensed. Builders can still work behind the veil of shelled, numbered and limited companies to reduce and potentially eliminate exposure to future claims.

The Building Code is an evolving document that sets minimum construction standards. Trained, ticketed professionals and trades are not required to take upgrade courses to ensure up-to-date knowledge. With evolving building codes, new designs and untested materials being introduced, and the speed in which the industry builds - is there really any wonder why the quality of construction is being questioned by the consumer advocates.

Did you know that the Building Code does not address minimum life-cycle of homes, housing products, systems and components? As previously mentioned, the BC Building Code is a minimum standard. Code compliance is determined during and upon completion of construction. In a highly competitive construction industry and without clear guidelines to determine the longevity standards of homes how does this protect consumers? Unfortunately housing products, systems, components and the quality of installation is being tested by you - the homeowner - with limited access to compensation for the systems that fail.

Consider consumer's past experience of testing products such as urea formaldehyde foam insulation, aluminum electrical wiring, inadequate piping, and leaky condos. Many homes, housing products and systems require higher levels of maintenance and/or have become increasingly more disposable. In some cases, homes have become deadly environments for occupants. Thousands of homeowners cannot afford the costs of rectifying defective construction leading to bankruptcies and foreclosures. The most affordable home to consumers is a home that is built right the first time and with durability in mind.

-August 6, 2006, The Province article entitled "Search still on for leak-proof wall" (excerpt)

Iredale Group architect Kendall B. Jessiman:

"We can expect an accelerated rate of failure," says Iredale Group architect Kendall B. Jessiman, a specialist in building envelopes (the technical name for the modern exterior wall cladding of a building). Jessiman says the problems are not due to any single system failure, but a general push to reduce costs in the building industry. "Developers want a short-term profit," says Jessiman, "and so they're quick to take up new, cheaper materials..."

- May 23, 2003, Vancouver Courier article entitled 'High-rise, High risk' (excerpt)

Leslie Peer, a structural engineer specializing in building science and restoration with Read, Jones, Christoffersen Ltd.:  

"My advice to all my friends is, 'Don't buy,'" Like Jessiman, Peer believes cost pressures on developers are driving quality down and making consumers guinea pigs for unproven, new technologies. "Quality is a difficult sell," says Peer, pointing from the window of his West Broadway office to a recently constructed 10-storey apartment complex across the street. "See those dark streaks on the stucco? That's an indication that the walls are not drying out. How much durability you build into a building is a conscious choice at the time of construction."

- May 23, 2003, Vancouver Courier article entitled 'High-rise, High risk' (excerpt)

Douglas Watts, a former building envelope specialist for the City of Vancouver now working at Read, Jones, Christoffersen Ltd.: 

"He (Mr. Watts) points out there is still nothing in the building code and window standards that talks about long-term durability. "

- May 23, 2003, Vancouver Courier article entitled 'High-rise, High risk' (excerpt)

John Robertson, Vancouver's chief building official: 

"If the developer won't give permission to view documents on a particular project? I wouldn't touch it with a 10-foot pole," says Robertson. (Referring to developer's reluctance to allow homebuyers access to construction details submitted to local governments.)

- November 21, 2001 Vancouver Courier article entitled 'Due diligence didn't work' (excerpt)

Back to The Facts - Housing (General)