
February 02, 2023
Real Estate News
RYPM
Be warned: Ontario homebuilders will now face steep fees for
unethical or illegal behaviour.
Starting today, the Home Construction Regulatory Authority
(HCRA) — a homebuilding watchdog formed February 2021 — may now impose
administrative penalties on the province’s homebuilders or vendors who breach
their legal and ethical obligations.
The new regulation adds administrative penalties (a
financial penalty similar to a fine) that can run as high as $50K per
occurrence to the HCRA’s existing enforcement tool belt, which also includes
revoking or imposing conditions on a licence. The changes were first proposed
in the fall following a spike in Ontario homebuyers dealing with builders
unlawfully cancelling pre-construction projects or terminating purchase agreements.
Previously, penalties were capped at $25K.
“The HCRA is serious about holding new home builders and
vendors accountable for their behaviour,” says Wendy Moir, the HCRA’s Chief
Executive Officer and Registrar in a press release. “These penalties are not
just a cost of doing business. This is a clear message and reminder to the
industry that unethical conduct and violations of the rules will not be
tolerated.”
The HCRA highlights the increased protections that the new
penalties will offer to homebuyers. Thanks to changes in the New Home
Construction Licensing Act (NHCLA), the organization will “use the proceeds
from the new administrative penalties to provide funds to negatively impacted
consumers, depending on the circumstances.” The HCRA adds that it will consider
whether a homebuilder gained financially from breaking the law, and, if so, an
additional penalty may be applied that reflects the amount of the benefit —
something that could be passed on to the impacted consumers.
“Hard-working Ontarians deserve to be treated fairly when
making one of the biggest purchases of their lives, a new home,” said Kaleed
Rasheed, Minister of Public and Business Service Delivery. “Ontario is the
first jurisdiction in Canada to provide such funds to consumers harmed by
unethical and illegal behaviour of new home builders and vendors. With expanded
enforcement tools, the HCRA has additional tools to crack down on bad actors
and take a robust approach to better protect consumers.”
The HCRA says that penalties can also be imposed on people
or companies who operate without a licence, which is clearly illegal.
“These penalties — up to $50,000 per occurrence, depending
on the contravention — are a first for the industry and will support an
enhanced, fair and safe marketplace,” Moir says. “They will support the HCRA in
quickly taking action against illegal and unethical behaviour, both protecting
consumers and ensuring a level playing field in the industry.”
The HCRA will take steps to educate homebuilders to ensure
they’re in compliance with the requirements under the NHCLA and Code of Ethics.
The HCRA says it has already issued several advisories to licensees, offering a
friendly reminder about conduct requirements and consequences for not following
the rules.
Wanting to also offer more resources to help consumers, the
HCRA has enhanced the Ontario Builder Directory with additional disclosures on
builders, including information on condominium contract terminations.
“Over the past two years, the HCRA has enhanced consumer
protection in Ontario, and is holding new home builders and vendors
accountable,” Moir says. “With support from the government such as the new
enforcement tools, the HCRA will continue to improve and raise the bar for the
new home building industry in Ontario.”
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