$32M case against Ontario developer falls apart at provincial regulator hearing

A developer that had been facing the potential of more than $30 million in fines from Ontario’s Home Construction Regulatory Authority (HCRA) has had all counts against it dropped. 

In the biggest case ever brought before the HCRA’s discipline committee, Briarwood Development Group was accused of violating the province’s code of ethics for home builders by coercing 142 buyers into paying more for pre-construction homes, for which they had already paid deposits and signed agreements, ultimately extracting more than $18 million. 

The counts against Briarwood were all dismissed or withdrawn last month, after the HCRA failed to prove its case and bring forward substantial evidence. 

Briarwood’s lawyers are celebrating the result, and insist the developer acted ethically and transparently with buyers.

Many buyers and advocates, however, say the outcome shows the HCRA is failing to regulate the industry and are calling on the province to step in. Some buyers who refused Briarwood’s price increase say they remain in limbo years later, still without their homes. 

“This is a horrible precedent for future buyers," said Toronto real estate lawyer Bob Aaron, who has represented clients who purchased homes with Briarwood. "Buyers need the confidence that what they sign for is going to be what they get."

Briarwood was facing allegations related to pre-construction developments in four Ontario communities: Stayner, Angus, Quinte West and Georgina. 

CBC first reported in 2022 about buyers who had already signed agreements with Briarwood and then faced demands from the developer for more money. The buyers said they were presented with two options: pay more or end the sales agreement altogether.

Briarwood has said the price increases were due to supply chain issues and rising costs during the COVID-19 pandemic.

After receiving many complaints, the HCRA alleged 142 buyers were coerced into paying more. The regulator alleged that was in violation of the code of ethics under the New Homes Construction Licensing Act, which requires builders to “treat every person the licensee deals with fairly, honestly and with integrity.” 

The HCRA brought its allegations to its discipline committee, which acts independently of staff.

If the committee had agreed that Briarwood violated the code of ethics, the developer could have been forced to repay the more than $18 million to the affected buyers, and could have also faced additional fines of up to $100,000 per count, altogether coming to a total of more than $32 million. 

Buyers — both those who had paid extra, and those who had refused — were anxiously awaiting the outcome. 

“I was hoping that [the] regulatory authority will force them to honor the contract because [a] contract is [a] contract and their wording must be honored by both parties,” said Jagat Patel, who along with his wife have refused to pay an extra $175,000 for the house in Stayner for which they signed an agreement, which six years later is still not complete.