ADI Morgan Developments (Lakeshore) Inc. resolution includes paying nearly $2.6 million to purchasers
TORONTO November 30, 2022 – Financial penalties for illegal and unethical behaviour are pending as enforcement tools for the Home Construction Regulatory Authority (HCRA), and one new home builder is preparing to pay for failing to comply with the rules.
Under a provincial proposal, the HCRA would be able to apply administrative monetary penalties for the first time.
“There are rules that must be followed – and consequences for failing to do so,” says Wendy Moir, the HCRA’s Chief Executive Officer and Registrar. “Monitoring and enforcing ethical behaviour has taken on added urgency in recent months amid growing concern over price escalations and terminations of purchase agreements.”
The changes to the New Home Construction Licensing Act, 2017 empowering the HCRA to implement administrative monetary penalties are proposed to be in effect on February 1, 2023 – the second anniversary of the launch of the HCRA. In the meantime, the HCRA is proactively taking action: following an investigation into consumer complaints about cancelled contracts and unreturned deposits, ADI Morgan Developments (Lakeshore) Inc. has agreed to pay $60,000 in penalties to the HCRA once the regulation takes effect and will pay nearly $2.6 million to 141 purchasers.
A total of $2,585,674.58 will be paid by ADI Morgan Developments (Lakeshore) Inc. to purchasers, in addition to their deposits. This is the amount of interest accrued, at a rate of 6%, on every affected purchaser’s deposit not returned on time by ADI Lakeshore.
"By requiring ADI Lakeshore to pay this money to the purchasers, we are ensuring that the builder did not benefit from breaching their licence requirements," says Moir.
Other terms of the resolution include that:
- As a condition on their licence, ADI Morgan Developments (Lakeshore) Inc., 4880 Valera Road Inc., and ADI Morgan Developments (Thomas Alton) Inc. cannot cancel any agreements unless the purchaser requests the cancellation first or is in default.
- Any current or new licensees affiliated with the ADI Development Group within the next two years will be subject to licence conditions.
Since launching as the new regulator in home construction, the HCRA has been actively looking into consumer complaints regarding price escalations and termination of purchase agreements.
To support enhanced consumer protection and ongoing professional conduct, the HCRA has consulted with industry and consumer stakeholders to inform expectations and principles on the subject, and recently issued an Advisory reminding builders and vendors of the rules. New homebuyers should use this advisory as a resource and guide should they find themselves in a similar scenario, and the HCRA would encourage homebuyers to discuss the content of the advisory with their builder for complete transparency.
“We are taking action to enforce high standards for professionalism and ethical conduct in Ontario’s home building sector – to protect consumers for one of the most important purchases of their lives,” Moir says.
About the HCRA
The Home Construction Regulatory Authority is responsible for regulating and licensing the people and companies who build and sell new homes in Ontario.
For information about other recent regulatory actions, please visit our website.
The HCRA enforces high professional standards for competence and conduct in the homebuilding industry, giving new home buyers confidence in one of the biggest purchases of their lives. The HCRA also maintains consistency across the sector, curtailing unethical and illegal builders. In addition to licensing, the HCRA provides educational information for consumers on their home buying journey, and hosts the Ontario Builder Directory – the authoritative source of background information about each of Ontario’s more than 6,500 new home builders and vendors.
Contact: Tess Lin
media@hcraontario.ca