A Toronto-area development company has been convicted of illegally selling new homes and will have to pay restitution to nearly a dozen buyers who lost their deposits in the shady deal.
The Home Construction Regulatory Authority (HCRA) announced on Monday that Ideal (BC) Developments Inc. has pled guilty to selling 10 new homes in Richmond Hill without a licence to do so, and without enrolling them in the Tarion warranty program.
The properties are all located on Bostwick Crescent in Richmond Hill, and were sold between September 2020 and December 2021 for prices ranging from $1,199,990 to $1,299,990.
The company’s officer and director, Shajiraj Nadarajalingam, is also the sole shareholder of Ideal Developments Inc., Ideal (JS), Ideal (MM) Developments Inc., and Ideal (WC) Developments Inc.
According to the HCRA, Ideal (BC) illegally took in hundreds of thousands of dollars worth of deposits from "unsuspecting purchasers." Nadarajalingam also failed to provide several documents to an HCRA investigator that were requested under a search warrant.
As a result, the Ontario Court of Justice has fined Ideal (BC) $15,625 for illegal selling, and $18,750 for failing to comply with a search warrant. The court has also ordered the company to pay $150,000 to the HCRA as restitution, which will be distributed to the wronged purchasers to partially offset their lost deposits.
"This outcome reinforces our message that anyone building and selling new homes must have a valid licence from the HCRA. It’s the law," said Wendy Moir, the HCRA’s Chief Executive Officer and Registrar. "While this restitution does not compensate purchasers for their lost deposits, we hope it helps alleviate some of their financial loss."
While Ideal (BC) has never been licensed to build or sell new homes in Ontario, the other companies under the Ideal Developments umbrella have been. As part of the conviction, the HCRA has refused to renew the licences of all Ideal-related companies.
In its decision, the HCRA said the the actions of Nadarajalingam, Bhoola, and Hill, “do not afford reasonable grounds for belief” that Ideal’s business would be “carried on in accordance with the law, and with integrity and honesty.”
In 2020, one of the other companies, Ideal (JS), transferred land sold for pre-construction projects to a numbered Ontario company without informing homebuyers that the new purchaser had the right to cancel their agreements of purchase and sale.
"The HCRA will continue to investigate and take action against illegal building and selling where necessary," Moir said. "Consistently enforcing high professional standards for the sector is critical for protecting consumers and giving new home buyers confidence when making one of the biggest purchases of their lives."
