Fines doubling for unethical and illegal new home cancellations

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Ontario Construction News staff writer

Ontario is doubling the maximum fines for unethical builders and vendors of new homes who unfairly cancel a new home project or terminate a purchase agreement.

“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,” said Kaleed Rasheed, minister of public and business service delivery. “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.”

If passed, changes under the New Home Construction Licensing Act (NHCLA), would increase existing maximum financial penalties from $25,000 to $50,000 per infraction, with no limit to additional monetary benefit penalties. Under these new rules, 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 (is 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, 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. “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.


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