The Code of Ethics

What does ethical conduct mean for consumers?

The Home Construction Regulatory Authority (HCRA) doesn’t just license home builders and vendors in Ontario, we also regulate their conduct. Did you know that as of July 2021, the Ontario government introduced a legislated Code of Ethics for home builders and vendors?

In this edition of the Home Front, we’re breaking down some of the principles of the Code of Ethics that set standards of service that licensees are expected to follow.

The Code of Ethics establishes clear standards for how builders and vendors are expected to behave, and what is considered ethical and acceptable conduct for their profession. Anyone not adhering to these expectations may face severe consequences – including losing their licence.

The Code of Ethics sets out 20 expectations of good conduct:

1. General obligation to comply
2. Licensee to ensure compliance of directors, employees, agents etc.
3. Fairness, honesty, integrity
4. No discrimination
5. Health and safety of public protected
6. Conscientious and competent service
7. Financial responsibility
8. Unprofessional conduct
9. Intimidation, coercion
10. Duty to comply with law
11. Duty to report charges and findings of guilt
12. Misrepresentation
13. Information provided to regulatory authority
14. Forms and documents
15. Business records
16. Obstruction of complaints
17. Disclosure, marketing, and false advertising
18. Fees and compensation
19. Confidentiality
20. Illegal construction or sale of new homes

Fairness, honesty, integrity

Under the Code of Ethics, licensees must treat new home buyers with fairness, honesty, and integrity, which means their conduct cannot be reasonably construed as unfair or dishonest. The HCRA’s Advisory on Honesty and Integrity is clear – while licensees are in a position of power relative to homebuyers, the HCRA expects licensees to not exploit this power. Purchasers are entitled to make informed decisions during the home buying process, but it requires builders to provide them with all the facts.

For example, it would be unethical for a licensee to mislead a home buyer during a contract negotiation or to recommend that a buyer not obtain legal advice, both of which may influence their decision to sign an Agreement of Purchase and Sale (APS).

Builders must honour their contracts

Consumers also invest their trust (and money!) into the specific skills and expertise of licensees when it comes to purchasing a home. Under the Code, licensees are expected to provide a level of courteous and responsive service to inspire trust and confidence by demonstrating reasonable knowledge, skill, judgment, and competence.

For example, in the event of a price escalation, licensees are expected to clearly communicate to purchasers any proposed changes to an APS in a timely manner to maintain a positive relationship, and to provide them with an opportunity to seek legal advice. It would be unethical if a licensee did not communicate this information to a purchaser, limit their ability to seek legal advice, or amend an APS without a purchaser’s consent. The HCRA would consider all professional misconduct.

Intimidation, coercion, and obstruction of complaints

The Code of Ethics is also clear that there is no place for intimidation, coercion, or obstruction in the home buying process. Licensees are prohibited from using intimidating or coercive tactics and cannot prevent people from submitting a complaint to the HCRA.

The HCRA’s Advisory on Intimidation, Coercion and Obstruction details several instances of this type of unacceptable conduct. For example, it would be unethical for a builder to pressure or scare a purchaser into signing an agreement before they’ve obtained legal advice.

They are also not allowed to prevent someone from making a complaint to the HCRA – it’s a consumer’s right to bring any concerns forward to the regulator. For example, it would be highly unethical for a licensee to dissuade a consumer from making a complaint by threatening legal action.

Communicate, communicate, communicate!

The HCRA communicates these expectations to licensees through Advisories. Advisories provide practical examples and expectations of the Code of Ethics, and clear guidelines so licensees are aware of their conduct expectations – “I didn’t know” is not an excuse!

Licensees are expected to familiarize themselves with Advisories, but they are a resource for consumers too. The HCRA’s Advisory Guide to Good Conduct is a valuable tool for consumers to understand the ethical standards Ontario home builders and vendors must meet, and examples of concerns that may be subject to enforcement.

What can the HCRA do?

The Code of Ethics principles are straightforward, and fortunately, the majority of licensees comply with the Code – in fact their licence depends on it. To maintain a licence with the HCRA, builders and vendors are required to abide by the Code of Ethics and the HCRA can take action if there’s a violation.

Violating the Code can result in a variety of actions from the HCRA including:

• Mandating training and education courses
• Proposing conditions on a licence
• Imposing an administrative penalty
• Laying a provincial offence charge
• Suspending or revoking a licence entirely

The Registrar may also refer a matter to the Discipline Committee if the HCRA receives a complaint about the conduct of a licensee and the Registrar believes there may have been an ethics violation.

If you believe a builder or vendor has violated the Code of Ethics, contact the HCRA immediately by filing a complaint using our Complaints Form.