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Bizarre Tale of Attempted Murder, Mayhem, Bankruptcy and Bad Faith Insurance

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Laval, PQThe way home warranty insurance currently works in the Canadian province of Quebec, you would hope that your condo isn’t in a building taller than four stories. Because if it is, under current regulations, you’re out of luck.

Home warranty companies, either individually or in concert with government programs, provide implied warranties to buyers of new homes and condos, warranting them against builder’s defects and other problems that can quickly escalate to make a new home uninhabitable. Home Warranty Lawsuits happen when those programs are either found to be lacking, carry too many exclusions or simply refuse to cover a homeowner who has a real problem.

In the Canadian province of Quebec, things have tipped a bit toward the bizarre given various circumstances and how the warranty program in that province is set up.

The program is due for an overhaul, according to blogger Alexandre Sebe writing in Postmedia (9/30/13). In the meantime, according to the report and various homeowners who have been caught in the program’s web, the current situation leaves a lot to be desired.

In Quebec, the new home warranty program was originally set up by the Régie du Bâtiment du Québec, a government agency. However, according to the report, the program is administered not by the agency, but by construction groups identified as the Association Provinciale des Constructeurs d’Habitations du Quebec Inc. (APCHQ) and the Association de la Construction du Quebec (ACQ). As might be expected, according to critics and given the way the warranty program is said to be administered, the warranty program is alleged to favor builders. According to the report, buyers have complained about having been given the runaround after reporting a problem with their new home or condo.

And that doesn’t even address the potential for an extended warranty.

In Quebec, there appears to be a two-tiered system according to current regulations. Presently, the government-sponsored home warranty insurance program in Quebec mandates that deposits are protected - and warrants against construction defects - for buyers of single-family homes or condos located in a building four stories or under in height.

However, in Quebec - under current regulations - were you to purchase a condo in a building five stories or taller, you’re out of luck. There is no mandated home warranty insurance against construction defects for you. For the builder, it’s optional but not required. Your deposit is also not automatically protected.

The imbalance in protection is best illustrated via planned developments by Tyronne Candappa, a Sri Lankan immigrant and former home renovator who got into the development business with plans for single-family homes and a 14-story condominium tower. However, according to the report, Candappa ran into financial difficulty and has been forced into bankruptcy.

According to the tenets of the home warranty insurance program in Quebec, buyers who made deposits against single-family bungalows got their money back. However, buyers having made deposits in Candappa’s planned Tysel Tower project, at 14 stories, were out of luck.

A sidebar to the issue is that Candappa, currently facing home warranty lawsuits from jilted buyers in his condo project, is also facing criminal charges after allegedly shooting one of his buyers. The gunshot wound left the individual in the hospital. The developer, who vows to complete his condo tower, has been charged with attempted murder.

However, his vow to complete does not help the dozens of condo buyers who have lost their deposits under the current two-tiered home warranty insurance program in Quebec. And in order to complete the condo project, the developer faces significant challenges, not the least of which are staying out of jail if convicted of attempted murder and somehow rising from bankruptcy.

Amidst demands in the province by consumer advocates for an overhaul of a system that appears to promote or at the very least allow bad faith insurance simply from how the program is structured, the Régie du Bâtiment du Québec is reportedly poised to overhaul the system.

But it’s still going to be two-tiered, apparently. “We think it’s too bad,” said Jean Lambert, president of the Chamber des notaires du Québec. “What we wanted is for all Quebecers to have the same protection whether they’re buying something with four stories or less, or five stories and over.”

The Quebec story is a Canadian twist on an issue that affects a lot of North Americans on either side of the border. When you purchase a new home, the builder warrants against defects in workmanship that could cause a home to become uninhabitable. When the initial warranty period expires, an extended warranty is often purchased in order to further protect the home buyer from unforeseen issues that could prove dire to the inhabitants of the home, such as water leakage and the development of mold.

It’s when this coverage is not properly honored, when an insurer stonewalls - or worse, when a homeowner is faced with a legitimate insurance claim denied - that bad faith insurance comes into play and the homeowner has little recourse but to trigger a home warranty lawsuit.

A home should be a castle, a refuge from the outside world. For too many homeowners who become unintentional victims of bad faith home warranty companies, that home quickly becomes a prison….


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