By most accounts, buying a new home in Ontario is a positive experience. Yes, it’s emotional and stressful — one of the most important financial decisions many of us will ever make — but in most cases, new homebuyers report a good relationship with their builder.
Unfortunately, over the years, a few unethical builders have sullied the market. Enough that two independent reviews determined that changes were needed to ensure consistent high levels of competence and ethical conduct.
A new regulator has now been in place for a year, taking steps to improve protections across the homebuilding sector. The Home Construction Regulatory Authority (HCRA), which launched on February 1, 2021, is responsible for licensing people and businesses that build and sell new homes in Ontario.
The law is clear: a valid license, based on strict professional standards, is required to build or sell a new home in this province.
In the first year of operation, HCRA brought charges for the first time – including for illegal home sales – and will continue to be diligent in identifying and taking action against inappropriate behavior.
Part of obtaining (and maintaining) a license involves adhering to a clear code of ethics. Among other qualifications, the HCRA requires licensees to avoid any activity that would be considered disgraceful, dishonorable, or unprofessional.
The introduction of the Code of Ethics has been an important milestone for UNHCR over the past year. A new complaints system was another milestone, and UNHCR received over 600 complaints in the first year of operation. Although not all grounds for action, this process means that builders and sellers will be held accountable for their conduct.
This is all the more urgent as the industry manages the impacts of the COVID-19 pandemic. Rules are in place for negotiating purchase and sale contracts to ensure that new home buyers are treated fairly, and builders must ensure that options are presented fairly and without pressure.
HCRA is determined to crack down on any builder or seller who attempts to operate outside or below HCRA expectations. It may only be a small number, but it can cause significant hardship for homebuyers and can damage public confidence in the industry as a whole.
This minority of “bad builders” – those who work illegally or do not follow the rules – will face serious consequences. This may include criminal charges against those who do not have the proper licenses and conditions or restrictions on the licenses of those who deviate from expected standards.
For good (and licensed) builders, this is all good news. They can be assured of a more level playing field, with the HCRA restricting illegal or unethical competitors. Licensed builders should also benefit from customers having increased confidence and resources to help them through the home buying journey.
In addition to licensing, HCRA provides educational materials for consumers – recognizing that most new home buyers will never have done this before – including the steps in the process, their builder’s expectations and the expectations of their builder towards them.
Prospective buyers are encouraged to consult the Ontario Builders Directory, hosted by the HCRA as the official source of general information on each of Ontario’s more than 6,000 builders and sellers. The HCRA’s advice is very clear: if a builder is not approved, do not buy!
There are many licensed builders that meet HCRA expectations. In its first year, HCRA processed 7,358 license applications and renewals. The industry is bigger than ever, highlighting the need for the HCRA and its enforcement tools to ensure new homebuyers are treated properly.
It’s a new era for Ontario’s new home market. After a year, HCRA is confident it has struck the right balance: a fair licensing process for builders and vendors that are performing well, and vigilant intervention for those that are not.