CCI Newsletter 3 - 2021-2022

to properly manage the warranty resolution process. Note, vacant land and common element condominiums do not have this warranty coverage.

Making a Common Elements Warranty Claim

The Condominium Act requires that a performance audit of the common elements be conducted between six and ten months following the registration of the condominium. The audit determines if there are performance deficiencies in the common elements. The audit only deals with common element issues; unit owners are responsible for filing their own warranty claim for deficiencies in their individual units. The first step to ensure your warranty is protected, is for the corporation to retain a qualified engineer or architect to complete the audit. Your Property Manager will have recommendations for qualified performance auditors. The performance auditor will complete a review of the turnover documents, conduct a survey of the unit owners, and complete a comprehensive site review of the condominium common elements. The objective of the survey is to determine if the unit owners have observed any evidence of damage or defects in the common elements. While on site, the auditor will identify any discrepancies between the turnover documents and as - built conditions and review reported concerns relayed by unit owners for the common elements. Identified deficiencies from site reviews and turnover documents will be compiled and added to the Performance Audit report and Tarion Tracking Summary (deficiency list). All performance audit documents should be submitted to Tarion before the first anniversary date of registration. It is crucial that the corporation tracks warranty deadlines as Tarion will not warrant late claims. The Tarion claims process for common elements is outlined in Tarion ’ s Registrar Bulletin No. 02 Claims Process – Condominium Common Elements, which can be found at In addition to the first - year performance audit, the corporation can also complete review for the two - and seven - year warranties for enhanced protection; however, these are not mandated in the Condominium Act.

Managing the Builder Repair Period

The first anniversary of registration marks the start of the “ Initial Builder Repair Period ”. This is an eighteen month period that the builder is expected to rectify deficiencies identified in the performance audit. The first step after the performance audit has been submitted is for the corporation to assign a Designate by submitting an appointment of designate form to Tarion. The Designate is an individual selected by the Board of Directors to act as the contact between the corporation and Tarion, manage warranty timelines, update the performance audit tracking summary (deficiency list), and drive the warranty resolution process for the corporation. Corporations can adopt different warranty resolution strategies for managing the initial builder repair period. Some Boards will act as the Designate, while others will assign their property manager or performance auditor as the Designate. Managing the warranty resolution process is challenging and requires in depth knowledge of Tarion warranty processes and timelines, the cost risks associated with each deficiency, and strategies for navigating the warranty process with Owners, Builders and Tarion. To set the stage for a successful initial builder repair period, corporations should coordinate a meeting with Tarion to visit the complex and chair a meeting with the Board, property manager and the builder. This is a good opportunity for Board Directors to be come educated on the warranty resolution process and to set expectations with all parties for the next eighteen months. Periodic updates, at least every 90 days are required during the initial repair period from both the condominium corporation and the builder. The updates from the condominium corporation are managed by the Designate and include reviewing and responding to repairs completed by the builder. Responses include accepting completed repairs, rejecting unacceptable repairs, and completing further investigation to substantiate claims. Typically, the Board and property manager will review smaller deficiency repairs (e.g., interior finishes or cosmetic issues) and will use engineering consultants in reviewing larger issues (e.g., code compliance, items requiring an engineering judgement or hard - to - access areas).

CCI Review 2021/2022 —March 2022 - 21

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