In the latest move to beef up consumer protections, the Ontario government is proposing to double the maximum fines faced by builders and vendors who cancel new home projects or terminate purchase agreements without just cause. The penalties collected would enable the Home Construction Regulatory Authority (HCRA) to reimburse consumers affected by such terminations.
The proposed hike falls under Ontario’s New Home Construction Licensing Act (NHCLA), enacted in 2017. If passed, the maximum financial penalty would be increased from $25,000 to $50,000 per infraction, with no limit to additional monetary benefit penalties. Depending on the severity of the offence, developers could also be forced to permanently relinquish their builder’s licence.
Theoretically, this would help to keep noncompliant developers in check. The pay-back component would be the first of its kind in Canada.
“Hard-working Ontarians deserve to be treated fairly when making one of the biggest purchases of their lives, a new home,” says Kaleed Rasheed, Minister of Public and Business Service Delivery. “With these stiffer penalties, we are cracking down on bad actors and taking a zero-tolerance approach to unethical and illegal behaviour by builders and vendors of pre-construction projects. Instead of profiting on bad behaviour, they will face hundreds of thousands of dollars in fines that will go back into the pockets of their victims.”
The amended NHCLA would also give the HCRA the authority to buckle down on developers retroactively, so long as the unethical or illegal activity occurred on or after April 14, 2022 -- which is the date the More Homes for Everyone Act received Royal Assent.
Meanwhile, repeat offenders could see penalties as high as $100,000 (for individuals) and $500,000 (for corporations), up from $50,000 and $250,000 respectively. In addition, offenders could face up to two years of jail time.
“Ontarians who have saved and sacrificed to purchase a new home deserve to be treated fairly,” says Steve Clark, Minister of Municipal Affairs and Housing. “With today’s announcement, our government is making clear that illegal and predatory behaviour on the part of developers will not be tolerated, full stop.”
If passed, this added layer of protection bodes well for new home buyers in Ontario. In the meantime, the HCRA has already started cracking down on unethical practices in the development sector. In early September, Adi Development Group came under fire for cancelling a number of purchase agreements for several condo projects in Burlington. The company was investigated by the HCRA and is currently at risk of losing their licence.
