class action lawsuit

Ready-made houses fail safety test, $8 billion class-action suit launched

By August 16, 2011 9:02 PM

**[size=3]SASKATOON,SK–AUGUST 15/2011-- Marilee Zaharia, with husband Wayne McLeod and dog Dudley, outside their Ready-to-Move home east of Clavet Monday, August 15, 2011. Zaharia is the voice of a class action lawsuit against the Canada Standards Association and The Standards Council of Canada regarding the home. **

That’s why the Bradwell woman is acting as the lead plaintiff in a national class action claim against the Canadian Standards Association (CSA) and the Standards Council of Canada (SCC).
After buying a ready-to-move (RTM) home in 2008, Zaharia says she’s still not fully moved in and has had to pay to bring the house up to code, alleging the CSA wrongfully approved the American-made product as safe and ready for sale.
The claim, which has not been proven in court, is seeking $8 billion in damages for tens of thousands of RTM home and hotel purchasers and RTM home dealers who cannot sell their stock as the homes are “uncertified” and “valueless.”
The SCC accredits the CSA and oversees its work.
Both organizations say they have not received any formal notification of the claim and deny any wrongdoing.
“The stress on my husband and I … has just been beyond belief. We decided to pursue this as a legal matter just so that if one (more) family doesn’t have to go through what we’ve had to go through, it’s worth it,” Zaharia said.
After purchasing the RTM from Saskatoon’s MidCanada Modular Homes in July 2008, a series of setbacks and safety issues has prevented Zaharia and her husband from living comfortably in their otherwise “beautiful” home near Bradwell. Several irregularities with the house, which was manufactured by Colorado-based Champion Home Builders Co., came to light after MidCanada’s owner inspected a similar home headed to Asquith and informed Zaharia of his concerns with the building.
It was discovered that the house had serious vapour barrier problems — which can lead to mold growth — as well as issues with trusses, joints and the electrical system.
Following months of communication, Zaharia said the CSA and the manufacturer visited the property in July 2009, stripping the house to its skeleton and re-building the structure. During that time, the owner said the CSA removed its safety approval sticker from the house without her permission.
Zaharia said the CSA approval is why she purchased the RTM home in the first place.
She said she decided to take legal action after feeling “pushed into a corner” about the situation.
Zaharia and her husband say they’re concerned about people who have purchased the homes but may not be aware of any problems, or can’t afford to fix their own RTM house.
“We are livid that we are the only ones that got anything done with their house,” she said of the 2009 manufacturer inspection.
“These houses are sent up to rural communities, they’re sent up to the aboriginal communities because they can’t get construction people in there, they’re sent to families who may not be able to afford a builder to come to their place.”
Regina-based lawyer Tony Merchant, who has taken on the class action claim through his firm Merchant Law Group LLP, explained the claim against the safety bodies alleges the CSA failed in its duty to properly inspect the RTM homes and did not have the authority to do so.
According to the claim, the SCC did not accredit the CSA to legally certify RTM homes until September 2010, however the CSA was inspecting the products between 2002 and September of last year.
“The problem for people is a double problem — the CSA didn’t have the authority to do what they were doing and in many instances weren’t doing it well,” he said.
Merchant said the $8 billion the class action is claiming in damages would cover some 10,000 to 15,000 Canadian owners of such homes he believes were wrongfully approved by the CSA, along with dealers who are stuck with unsaleable stock.
The claim alleges MidCanada, for example, has suffered direct and indirect losses of some $9 million.
“CSA is a huge organization but a non-profit organization, so this could be the death knell of the CSA,” Merchant added.
Pilar Castro, spokesperson for the SCC, said it’s taking the allegations seriously. However, she added, the organization needs to receive the formal legal documents before taking action on the claim.
“We take all allegations very seriously, so we’re certainly trying to understand what’s being put forward,” Castro said.
“As a third-party accreditation party, any Canadian, whether it be a business or an individual, can come to us with concerns about the programs that we run.
So any time that does happen, we look at those very carefully.”
Castro confirmed the CSA was accredited for the RTM inspections in 2010, adding she doesn’t believe the SCC should be named in the claim.
The CSA has been certifying manufactured modular buildings in accordance with industry standards since 1972, said Anthony Toderian, spokesperson for the CSA.
He said the association stands by the validity of its testing certification process and its factory inspection process.
“The CSA is devoted to public safety and has been for more than 90 years,” Toderian said. “We have a process that’s internationally recognized in terms of product review and certification.
“(The) CSA wants to reassure the public and all interested parties that it will vigorously defend the organization, its reputation and its processes against any and all unfounded allegations or attacks on its reputation and credibility.”
Toderian could not speak to the allegations in the claim as, like the SCC, the CSA also has not received formal documents.