Audit blasts home warranty company

One of Quebec's major new home warranty companies has come under scathing criticism in a report by a provincially mandated audit last fall.

The Association provinciale des constructeurs d'habitation du Québec (APCHQ) issues warranties on newly-built homes, but the audit by Raymond Chabon Grant Thornton (RCGT) accuses it of poor management, being chronically underfunded and taking unreasonable amounts of time to settle cases.

In order to get bank financing to build new homes, builders generally have to get a warranty from companies such as the APCHQ. New home builds were given warranties under the company's Guarantee Plan for new homes.

According to the report, which was obtained by the Journal de Montréal, the APCHQ has run up a $36-million deficit and its bookkeeping is a mess.

As for owners of new homes, the warranty company is leaving many of them waiting years before their issues are even addressed.

Of the almost 1,200 cases currently on file at the APCHQ, 62 per cent were opened over three years ago.

The APCHQ's Guarantee Plan however says it is not to blame.

Since 2011, it has been inundated with claims stemming from the pyrrhotite crisis in the Trois-Rivieres area.

Hundreds of homes were severely damaged by the use of the mineral in the homes' concrete foundations, resulting in millions of dollars in damages.

Mortgage broker Terry Kilakos says if it wants to stave off bankruptcy, the APCHQ has to streamline its operations.

"Maybe even mitigate the risk by spreading their contracts, or selling their contracts, to competing firms," he says.

Kilakos and others think the company probably over-extended itself during the past decade's condo boom.

However, the Régie du batiment du Québec assured CJAD that home owners with guarantees issued by the APCHQ need not worry that their claims will not be honoured.

Their claims will be administered by RCGT and will be honoured, the Régie says.

But it would not comment on the report, which it says was meant to remain confidential.

Leave a comment:

· Subscribe to comments
Be the first to comment here. You DO NOT need to be a member to comment.

Share this article: