Ontario Doubling Fines for Unethical and Illegal New Home Cancellations
Money from penalties will now go directly to victims
WINDSOR – The Ontario government is doing more to protect new home buyers by doubling the maximum fines for unethical builders and vendors of new homes who unfairly cancel a new home project or terminate a purchase agreement.
“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. “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.”
Proposed changes under the New Home Construction Licensing Act (NHCLA), would, if passed, increase existing maximum financial penalties from $25,000 to $50,000 per infraction, with no limit to additional monetary benefit penalties. Under these new changes, unscrupulous developers could now be on the hook for hundreds of thousands of dollars in fines for each unfairly cancelled contract. Unethical developers who engage in these practices could also face the risk of permanently losing their builder’s licence.
The proposed changes will also enable the Home Construction Regulatory Authority (HCRA) to use the money received from these penalties to make payments back directly to consumers who have been adversely affected by builders and vendors who break the law. This change would make Ontario the first jurisdiction in Canada to provide such compensation to consumers.
Once proclaimed into force, the HCRA would have the authority to impose financial penalties retroactively to contraventions that occurred on or after April 14, 2022 – the date the More Homes for Everyone Act received Royal Assent.
“Ontarians who have saved and sacrificed to purchase a new home deserve to be treated fairly,” said 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.”
The government is also doubling maximum financial penalties for repeat offenders of the NHCLA, with individuals now facing charges of $100,000 and corporations of $500,000, up from $50,000 and $250,000 respectively. Individuals found guilty may also face a sentence of up to two years in prison.
This builds on the government’s previous efforts to deter unethical builders and vendors, most recently in the More Homes for Everyone Act. The government doubled financial penalties for individuals and corporations who breach the HCRA’s Code of Ethics by trying to rip off Ontarians to $50,000 for an individual and introduced a new fine for corporations at $100,000.
This is the government’s next step in holding builders and vendors of new homes to professional standards under the More Homes For Everyone plan.
Stronger measures came into effect on April 14, 2022, under the More Homes for Everyone Act, giving the Home Construction Regulatory Authority additional tools to address unethical practices of some builders and vendors who unfairly cancel pre-construction projects or terminate a purchase agreement.
The Home Construction Regulatory Authority (HCRA) regulates builders and vendors of new homes and holds them to professional standards, including compliance with a mandatory code of ethics. It also has the authority to enforce compliance through warnings, education, putting conditions on a licence, or by suspending or revoking a builder’s licence.
New home buyers are encouraged to check the status of their developer or new home/condo project on the Ontario Builder Directory before making a new home purchase.
Learn more about the Home Construction Regulatory Authority
The Rebuilding Consumer Confidence Act, 2020 promotes higher quality new home construction while better protecting consumers from bad actors in the marketplace.