The Home Construction Regulatory Authority can now fine Ontario builders up to $50,000 per occurrence, with a portion of the money going to affected customers.
A new provincial regulation that goes into effect Wednesday will allow Ontario’s homebuilding watchdog to fine unethical and rule-breaking builders up to $50,000 per occurrence.
If the Home Construction Regulatory Authority (HCRA) deems it appropriate, the funds can be used to compensate negatively affected consumers.
According to the Star, if a licensed building profits financially from breaking the rules, the authority can levy an additional penalty that is passed on to customers.
The penalties could apply to both licensed and unlicensed builders.
The homebuilding watchdog has increased its regulatory efforts in recent months. Last fall, the HCRA moved to revoke Adi Developments’ license in what is believed to be the first decision of its kind. It claimed the company acted unethically when it informed buyers in its Nautique condos in Burlington that their purchase agreements would be canceled unless they paid more — in some cases hundreds of thousands of dollars more — for the same unit.
The regulator discovered that Adi told the buyers who refused to pay the higher price that their deposits would not be refunded until the developer found another buyer for the unit.
Adi reached an agreement with the regulator at the Ontario License Appeal Tribunal in November. It was granted permission to keep its license by agreeing to pay a $60,000 fine and $2.6 million to Nautique purchasers.
Wendy Moir, CEO of the HCRA, stated in November, “By requiring Adi Lakeshore to pay this money to the purchasers, we are ensuring that the builder did not benefit from violating their license requirements.”
She stated that there was a growing urgency to enforce ethical building practices due to rising concerns about price escalation, which could lead to the termination of purchase agreements.
Adi CEO Tariq Adi blamed the need to return to the purchasers on supply chain issues, labor shortages, and cost increases of approximately $43 million.
He claimed that the HRCA’s actions caused significant “reputational damage” to his company.
