HCRA imposes financial penalties on illegal home builders

As it marks its second year of operations, the Home Construction Regulatory Authority (HCRA) may now impose administrative penalties on Ontario home builders or vendors who breach their legal and ethical obligations.

A new regulation now in effect adds administrative penalties – a financial penalty similar to a fine – to the HCRA’s existing enforcement tools that include revoking or imposing conditions on a licence.

“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. “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.”

With the introduction of administrative penalties, the HCRA is further able to ensure home buyers are protected. The recent legislative and regulatory changes to the New Home Construction Licensing Act, 2017 (NHCLA) include allowing the HCRA to use the proceeds of administrative penalties to provide funds to negatively impacted consumers, depending on the circumstances. The HCRA may consider whether a licensee benefitted financially from breaking the law and, if so, an additional penalty may be applied reflecting the amount of the benefit, which could be passed on to the impacted consumers.

“Adding financial penalties to the HCRA’s regulatory toolbelt will enhance consumer protection and in some cases, provide funds to consumers who have been negatively impacted by a builder’s or vendor’s conduct,” Moir says.

“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.”

Penalties can also be imposed on people or companies who operate without a licence – which is 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.”

Ongoing education to facilitate compliance with the requirements under the NHCLA and Code of Ethics regulation will be critical to building an enhanced new home construction marketplace.

To support an informed industry, the HCRA has issued several advisories to licensees, reminding them of their conduct expectations and the potential consequences for not following the rules. The HCRA has also enhanced the Ontario Builder Directory to support consumers in their home buyer journey by providing 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.”

You might also like