arbitration DECISION

After having read the proceedings, heard the PROOF and argumentS of all parties, the Arbitration Tribunal renders its decision As follows:

1. FACTS AND PROCEeDings

The Beneficiary is the second owner of the property located at 10238 Perras Boulevard, in the City of Montreal, Province of Quebec (“Property”). On September 19, 2003, the Beneficiary purchased the Property from 9128-6252 Quebec Inc. The Plan Manager has taken the position, and repeated at the hearing of the present matter that, on that date, the Property was covered by its guarantee under the Regulation Respecting the Guarantee Plan for New Residential Buildings (“Regulation”). After purchase, the Beneficiary rented the Property to the parents of the majority shareholder of the Builder (“Tenants”) for a period of approximately five (5) months. On March 8, 2004, the Beneficiary personally moved into the property, except for the basement, which remained rented to the Tenants until May 2004.

In May 2004, when the basement was vacated by the Tenants, the Beneficiary performed a more complete inspection of the Property. In August 2004, he filed his first claim with the Plan Manager, after being informed by a neighbour, on July 13, 2004, that he could file such a claim. Following such claim, an inspection of the Property was made on September 17, 2004 and the Plan Manager rendered a decision on October 14, 2004. Various work was ordered by the Plan Manager which has now been completed.

On February 11, 2005, the Beneficiary advised in writing the Plan Manager (the letter was filed by the Plan Manager) of new complaints regarding alleged poor workmanship and/or latent defects and asked the Plan Manager to re-inspect the Property and to render a new decision. This inspection occurred on May 5, 2005 and the decision was rendered on June 28, 2005 rejecting the complaints.

The Plan Manager refused the claim of the Beneficiary on the basis that it was made more than six (6) months after the problems were discovered, contrary to article 10 of the Regulation. The Beneficiary appeals from that decision. At the time of the hearing of this matter, the Builder had gone bankrupt. The Trustee in bankruptcy was notified of the hearing by registered mail but omitted to attend.

2. Question in issue

Was the claim of the Beneficiary made within the six (6) month legal delay after the discovery or the time that he should have discovered the alleged poor workmanship and/or latent defects, pursuant to article 10 of the Regulation?

3. Analysis and Decision

The Arbitration Tribunal notes that the Beneficiary never obtained a copy of the original contract entered into by 9128-6252 Quebec Inc. and the Builder regarding coverage under the Regulation, nor did he obtain the full documentation from the office of the Plan Manager as to the rules and formalities regarding the application of the Regulation to the Property. It should however be noted that the website of the Plan Manager does not mention all the legal delays that a Beneficiary must follow. In that regard, there is room for improvement in the website of the Plan Manager.

The Arbitration Tribunal also notes that there remained a list of work to be completed at the time of purchase, and that said list was remitted to the Beneficiary in August 2003, when he first visited the Property.

In May 2004, according to his own testimony, the Beneficiary discovered all of the problems that are presently under appeal before the Arbitration Tribunal, except for the defect in the kitchen counter which was discovered in June 2004.

As stated, on July 13, 2004, the Beneficiary learned from a neighbour that he could file a claim with the Plan Manager and accordingly, a claim was filed in August 2004. By that time, namely August 2004, all the problems that are under appeal before this Arbitration Tribunal were already known to the Beneficiary. However, he failed to declare them either in writing or during the first inspection of the property that took place in August 2004. He waited, without any reason or justification offered, until February 11, 2005 to do so.

After the initial inspection of August 2004, a decision was rendered in October 2004. The Plan Manager accepted at that time to recognize 16 points of the first claim made by the Beneficiary. That claim was based on non-completion of the work related to the building. Such a claim can only be made in the event of a specific notification in writing to that effect at the time of acceptance of the building (article 10 (1) of the Regulation). However, the Plan Manager accepted, for reasons of equity, to commence the delay with respect to completion of the work from May 2004. It should also be noted that, in the Plan Manager’s decision of October 2004, at Points 17 and 18, the Plan Manager specified and provided details concerning the six (6) month legal delay granted to a beneficiary to file a claim after the discovery of defects.

The Arbitration Tribunal therefore has no choice but to conclude that the Beneficiary was advised and knew by the latest October 2004, that all defects discovered in May or June 2004 had to be declared to the Plan Manager within a period of six (6) months.

Since all of the alleged defects in appeal were known to the Beneficiary either in May or June 2004, the expiration of the six (6) months deadline occurred in November or December 2004. The notification in February 2005 is therefore tardy and outside the prescribed delay stipulated in the Regulation. The application for arbitration should therefore be dismissed.

4. AMOUNT IN ISSUE AND APPORTIONMENT OF COSTS

The amount in issue in the present arbitration is approximately fifteen thousand dollars ($15,000.00).

In accordance with article 123 of the Regulation, as the claim of the Beneficiary has been dismissed in its entirety, the Arbitration Tribunal has discretion to apportion the costs of this arbitration. Furthermore, the Plan Manager has been more than generous and permissive with the Beneficiary for his first claim. Had the Beneficiary been in possession of the original guarantee contract, this Arbitration Tribunal would have condemned him to pay one hundred percent (100 %) of the costs of this arbitration. However, since the Beneficiary never had a copy of the guarantee contract, this Arbitration Tribunal condemns him to pay fifty percent (50 %) of the costs of arbitration and condemns the Plan Manager to pay the remaining fifty percent (50%).

For these reasons, the Arbitration Tribunal:

DISMISSES the Arbitration Application;

CONDEMNS the Beneficiary to pay fifty percent (50 %) of the costs of arbitration and the Plan Manager to pay fifty percent (50 %) of the costs of arbitration.

____________________________________
Mtre. Jeffrey Edwards, Arbitrator

For the Beneficiary:

Mr. Jim Forcione

[...] Montreal, Quebec […]

For the Plan Manager:

Mtre. Avelino De Andrade

Leblanc, Lalonde & Associates

7400 des Galeries-d’Anjou Blvd., Suite 205

Anjou, Quebec H1M 3M2

Hearing: November 29, 2005

Documents received from parties: December 13, 2005

Arbitration Decision: January 12, 2006