STAFF WRITER – The Ontario Construction Report Special Feature
About five years ago, Trisura entered a specialized market – providing Deposit Insurance/Warranty Bonds and Excess Condominium Deposit Insurance (ECDI) facilities, required by the Tarion Home Warranty Program. Tarion Warranty Bonds are typically required for each condominium unit to protect a condo buyer’s deposit and any warranty deficiencies. Posting a bond allows the developer to free up these funds, which would otherwise be held in trust.
Kim Roberts, manager of developer surety, said Trisura carved out a niche market focusing on small to mid sized developers whose projects are in the range of 100 units with a construction schedule of 18 months or less. This focus has now been diversified to include projects in excess of 200 units, which typically have longer build out times.
The business has proven to be successful for both Trisura and the developers. “Since the beginning, Trisura has taken an active role in consulting smaller and/or novice developers through the bonding and related processes,” Roberts said. There was a relatively untapped opportunity to work with smaller developers, and Trisura set up systems to manage them effectively.
“We have assisted some developers in achieving high growth objectives,” she said. “They started out with one small project, then went to two projects, and grew with their success.” Referrals have come from all corners of the industry: lenders, lawyers, developers, existing construction clients and project consultants, to name a few. The business is doing well and ready for the next step in its evolution.
The company’s growth and success has allowed Trisura to further enhance its coverage capacities and service. Five years of developer surety experience has solidified a solid base for growing business, but that hasn’t stopped Trisura from looking ahead with the intention to expand its appetite for larger projects. This doesn’t mean the underwriter has forgotten about smaller clients, but rather, is looking to take advantage of future opportunities that were previously out of its scope. In addition, “we want to ensure we are growing in step with our existing clients who are taking on larger projects,” Roberts says.
“The developer surety product was created specifically to serve as security for deposit and warranty coverage for new home developers in Ontario,” she said. “Fees are reasonable, and we have worked to be very flexible and conscious of our clients’ needs based on the concept that developers need to be financially prequalified for approval.”
While Tarion and the processes involved have remained consistent over the years, there’s always a lot going on with the players inside the industry. Increase in competition has led to softer terms in the market, for one. New opportunities continue to transform the developer surety business, and Trisura along with it.
Kim Roberts is manager, developer surety.