No fines issued by Ontario regulator for developer price hikes despite promised crackdown

Nine months after the province pledged to crack down on developers for cancelling housing build contracts or demanding more money from buyers, Ontario's Home Construction Regulatory Authority (HCRA) has yet to levy any fines for these controversial practices, CBC News has learned.

The provincial government has authorized the HCRA — a not-for-profit corporation designated by the province to enforce the New Home Construction Licensing Act — to impose increased fines to curb "unethical and egregious" practices. That's on top of the initial fines the authority has had the power to impose since July 2021.

The organization's discipline committee is only now in the beginning stages of hearing its first case, which is unrelated to these issues.

While the authority says handling complaints properly takes time and resources, would-be buyers say in the meantime, they're left hanging with deposits tied up in an exceptionally competitive housing market.

"The HCRA is not doing its job to hold developers to account, and the Ontario government is not doing its job in making sure first-time homebuyers get the home that they paid for," said University-Rosedale MPP Jessica Bell, the provincial NDP's housing critic.

"Homebuyers deserve protection. If you have signed a contract saying a developer will build a home at a set price, that contract needs to be honoured. The Ontario government needs to make sure these developers honour the contract."

In its first full year of operations, the HCRA received 800 complaints, according to spokesperson Tess Lin in an email to CBC News. The authority's discipline committee only received its first case on March 15, 2022. 

A hearing in that case is still being scheduled, Lin said. The HCRA also has other disciplinary tools at its disposal like written warnings, mandatory education, conditions on licences, and revoking or suspending licences in worst case scenarios.

Lin also said provincial legislation prevents the authority from saying if any developers are currently under investigation for cancelling an agreement or demanding more money from buyers.

It has taken this long for the HCRA's discipline committee to hear its first case because "allegations of this nature are often complex and require time for our team to duly review and recommend a course of action," she said.

"The HCRA has a responsibility to ensure administrative and procedural fairness to all parties, which is why it can take some considerable time to gather information related to a complaint — viewed through that lens, the time elapsed is not out of the norm in the regulatory world," Lin said.

But the length of time the investigations process takes can be painful for families who feel they are being strong-armed by a developer, said Gayle Dudeck, who worked in the Durham Region land registry office for over 30 years.

Now retired, Dudeck contacted the HCRA to launch a complaint after the contract for her son's home in a development in Elora, Ont., was cancelled by the developer back in January, after he first signed a deal the year before.

She told CBC News that it took five weeks for an HCRA investigator to email her and ask for her son's address. Seven months since the initial complaint, she said no one from the authority has even spoken with her son.