An Urbancorp development on Abell Street in Toronto. The company’s insurance coverage will remain in place until an appeal tribunal hearing can be held.Chris Young/The Globe and Mail
Urbancorp, one of Toronto's biggest property developers, may lose its registration with Ontario's new-home warranty organization because of concerns over poor service and its financial condition.
Tarion Warranty Corp., which backstops Ontario builders' warranties, has issued a notice saying it plans to revoke the registration of all 17 companies in the Urbancorp group. Urbancorp has appealed the notice, and its insurance coverage on existing projects will remain in place even if it loses its registration.
Tarion spokeswoman Melissa Yollick said the insurer initially made the move against Urbancorp because the developer had "high claims activities."
That means Tarion was called in by people who were having trouble getting deposits back on cancelled projects, or who were having problems getting Urbancorp to make warranty repairs on their new housing units.
While it is up to developers to deal with warranty issues, Tarion gets involved if those issues are not resolved to the satisfaction of the home buyer. In this case, "[Urbancorp] was not fixing issues that should have been fixed under the warranty," Ms. Yollick said.
In addition, Tarion is also concerned about the financial condition of Urbancorp, she said. "It failed to demonstrate that they could meet our financial requirements," and the company was "not forthcoming with financial information," she said.
While the appeal is under way, Urbancorp's existing projects remain registered under the Tarion program, and the developer is obliged to continue dealing with the warranty issues of its clients.
But Tarion will not approve any new Urbancorp projects in the meantime, Ms. Yollick said.
Urbancorp has developed housing and condominium projects in Toronto, with many of them in the west end of the downtown core.
The company was created in 1991 by Alan Saskin, a real estate executive who had formerly worked at Cadillac Fairview Corp. and York-Hannover Developments Ltd.
Initially, Urbancorp built only townhouse developments, but in recent years it has moved into much larger high-rise projects as well. The company recently raised money in a bond issue in Israel.
Urbancorp did not return phone calls and e-mails on Wednesday requesting an interview.
Ms. Yollick said the fact that the company has filed an appeal suggests "that they want to demonstrate that they are still following the registration requirements, which means that they are still in operation."