No fines issued by Ontario regulator for developer price hikes despite promised crackdown

CBc.ca
Aug. 25, 2022

Nine months after the province pledged to crack down on developers for cancelling housing build contracts or demanding more money from buyers, Ontario's Home Construction Regulatory Authority (HCRA) has yet to levy any fines for these controversial practices, CBC News has learned.

The provincial government has authorized the HCRA -- a not-for-profit corporation designated by the province to enforce the New Home Construction Licensing Act -- to impose increased fines to curb "unethical and egregious" practices. That's on top of the initial fines the authority has had the power to impose since July 2021.

The organization's discipline committee is only now in the beginning stages of hearing its first case, which is unrelated to these issues.

While the authority says handling complaints properly takes time and resources, would-be buyers say in the meantime, they're left hanging with deposits tied up in an exceptionally competitive housing market.

"The HCRA is not doing its job to hold developers to account, and the Ontario government is not doing its job in making sure first-time homebuyers get the home that they paid for," said University-Rosedale MPP Jessica Bell, the provincial NDP's housing critic.

"Homebuyers deserve protection. If you have signed a contract saying a developer will build a home at a set price, that contract needs to be honoured. The Ontario government needs to make sure these developers honour the contract."

Investigations take time, HCRA says
In its first full year of operations, the HCRA received 800 complaints, according to spokesperson Tess Lin in an email to CBC News. The authority's discipline committee only received its first case on March 15, 2022.

A hearing in that case is still being scheduled, Lin said. The HCRA also has other disciplinary tools at its disposal like written warnings, mandatory education, conditions on licences, and revoking or suspending licences in worst case scenarios.

Lin also said provincial legislation prevents the authority from saying if any developers are currently under investigation for cancelling an agreement or demanding more money from buyers.

It has taken this long for the HCRA's discipline committee to hear its first case because "allegations of this nature are often complex and require time for our team to duly review and recommend a course of action," she said.

"The HCRA has a responsibility to ensure administrative and procedural fairness to all parties, which is why it can take some considerable time to gather information related to a complaint -- viewed through that lens, the time elapsed is not out of the norm in the regulatory world," Lin said.

But the length of time the investigations process takes can be painful for families who feel they are being strong-armed by a developer, said Gayle Dudeck, who worked in the Durham Region land registry office for over 30 years.

Now retired, Dudeck contacted the HCRA to launch a complaint after the contract for her son's home in a development in Elora, Ont., was cancelled by the developer back in January, after he first signed a deal the year before.

She told CBC News that it took five weeks for an HCRA investigator to email her and ask for her son's address. Seven months since the initial complaint, she said no one from the authority has even spoken with her son.

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She said the HCRA is not doing nearly enough, quickly enough, to curb these practices -- and in the meantime, her son and his partner are left in the lurch, hoping for some sort of resolution.

"They can't wait three to five years for this to be settled," Dudeck said. "Most people can't … it seems so unfair.

"They can't even talk about it half the time because they get so upset about it. All their hopes and dreams have been squashed."

Province points to fines as part of solution
In an email statement, HCRA spokesperson Catherine Morrison said the authority "appreciate[s] the urgency that many homebuyers feel when they have submitted a complaint.

"The HCRA's complaints system operates on two fundamental principles: giving consumers a clear path to voice their concerns and ensuring fair adjudication of the matter for all parties involved," she said. "This takes time and resources, which we are dedicating to the complaints process."

Premier Doug Ford has previously denounced developers who cancel projects and charge homebuyers more after contracts were signed, and said he has "zero tolerance" for either practice.

"We're going to continue monitoring it, and we're going to make sure that they aren't allowed to go there and pull the carpet out from underneath [buyers]," Ford said at a news conference earlier this month.

When asked if the HCRA is doing enough to help homebuyers considering it hasn't levied any fines for these issues, Ministry of Public and Business Service Delivery spokesperson Sebastian Skamski said the provincial government has "made very clear the consequences that bad actors will face as a result of the measures we introduced, including significantly increased fines to the tune of hundreds of thousands of dollars on a single home and the suspension or revocation of licences."

Skamski also pointed to a recent advisory issued by the HCRA on the issue, and remarks made by Minister of Municipal Affairs and Housing Steve Clark during the Association of Municipalities of Ontario conference last week.

"We unequivocally expect all builders to operate in a professional manner, with fairness, honesty and integrity towards consumers," Clark said, again noting "heftier fines for builders who try to rip off homebuyers."

The HCRA, meanwhile, says in its just-released annual report for 2021-2022 that it is still in the midst of "collecting the baseline data" to establish its performance measures on things like open and closed complaints alongside its percentage of successful prosecutions, with those numbers expected in next year's report.