Smart moves – Invest wisely with help from the HCRA

Buying a brand-new condominium is a major investment. Whether you’ve done this before or you’re a first-timer, having confidence in the builder is one of the most important factors in a positive condo buying experience.

New-home builders in Ontario are licensed by the Home Construction Regulatory Authority (HCRA). What does having a licence mean? For one thing, it’s the law. Building or selling a new home in Ontario without a licence from the HCRA is illegal.

Above all, a licence gives you, the consumer, assurance that the builder meets professional standards. To be licensed, a builder must have the right technical skills to build homes, and the right knowledge and capability to run a homebuilding operation. They must also act with honesty and integrity.

All of this falls under the banner of consumer protection. The HCRA is one of Ontario’s newest regulators with this responsibility, alongside agencies enforcing standards for financial services, retirement homes, funerals, wine making, motor vehicles, real estate, travel and other consumer-driven sectors.

Few consumer transactions are as significant as buying a new home. These are large, often life-changing decisions – with no shortage of emotion on top of the financial and construction considerations. Giving consumers confidence in their condo builder is fundamental to the HCRA’s work.

A fair marketplace for buyers and builders

The HCRA helps consumers as a reliable resource, offering useful education on the homebuying process and addressing concerns with the conduct of licensed builders and sellers.

It also benefits builders – good builders, that is, who play by the rules – by keeping unscrupulous competitors from having an advantage and creating a level playing field throughout the new-home building marketplace.

In addition to licensing, the HCRA enforces a Code of Ethics giving builders and sellers clear standards for what is considered ethical and acceptable conduct for their profession. The Code of Ethics sets out specific principles for how Ontario homebuilders are expected to behave. It’s also a roadmap for consumers to understand the standards licensed builders must meet.

In total there are 20 principles which all licensees must adhere. To name a few, this includes:
• Complying with the law
• Financial responsibility
• No misrepresentation
• Providing conscientious and competent service

You can learn more about the Code of Ethics on the HCRA’s website.

Condo buying – key resources

The Ontario Builder Directory
Just as you would research a new car or phone before buying it, researching builders is highly recommended.
Before purchasing a pre-construction condo, the HCRA always recommends researching builders on the Ontario Builder Directory (obd.hcraontario.ca). This is a searchable online database hosted by the HCRA that contains information about each of the province’s nearly 7,000 licensed builders and sellers. Most importantly, it includes whether they have a valid licence from the HCRA.

On the Builder Directory, you can find the number of years a builder has been active, the number of homes it has built, and any conduct concerns among other relevant data.

New Home Buyer Dashboard
Choosing a builder is just one of many considerations when buying a pre-construction condo. The HCRA’s New Home Buyer Dashboard (hcraontario.ca/go) can help you make an informed decision. It provides a roadmap about what to expect during the journey – including a section with important information specific to buying a pre-construction condo and what you should expect during that transaction.

For example, with a pre-construction condo, you should be prepared for delays. Condo construction is a complex process, often with multiple units and many different components that need to fit together, usually in sequence. If any one of them gets held up, the whole project can be delayed.

However, when delays do happen, you have rights. There is action you can take, especially if the delays are unreasonable or take too long.

Assuming the delay is for legitimate reasons, there are rules the builder has to follow, including obligations to inform the purchaser of the delay, provide an estimate of how long it will be and give written notice about new construction timelines.

They can’t “ghost” you – your builder must respond to your queries honestly, fully and in a timely way.

And the delays can’t go on indefinitely. If there are multiple delays with no valid reason (or reasons that aren’t being resolved), this may raise questions about the builder’s financial viability and have licensing ramifications.

Anyone experiencing these kinds of concerns should contact the HCRA. In addition, homebuyers should be aware that in Ontario new homes come with deposit protection, this is overseen by a separate organization known as Tarion.

Supporting documents can be critically important, which is another big lesson in the condo-buying process: Always keep a paper trail. It’s also always a good idea to get professional legal advice, to have your agreement reviewed by an experienced lawyer, to make sure you understand exactly what you’re agreeing to.

What if things go wrong?
While most condo buyers have a positive experience with their builder, exceptions do happen. In those unfortunate cases, you do not have to simply accept bad behaviour. The HCRA has a complaint process to review and manage concerns you may have about your builder, including those who skirt the rules.

The HCRA’s complaints process operates on two fundamental principles: Giving consumers a clear path to voice their concerns, and ensuring a fair review process for all parties involved.

There are basically two streams of complaints the HCRA will pursue:
1. Building or selling a new home without a licence – which as noted earlier is illegal in Ontario.
2. Professional conduct and competency concerns.

Just a few examples of what may be considered professional misconduct:
• Pressuring a homeowner to sign an amended contract before they obtain legal advice.
• Not honouring signed agreements.
• Not communicating with homebuyers after significant construction delays.

If you believe that a builder’s conduct has fallen below the expectations set out in the Code of Ethics, submit your complaint to the HCRA.

Visit the HCRA website to learn more about the types of complaints the HCRA manages and details on how to submit a complaint.

Know your rights

Never be bullied
Under the Code of Ethics, the HCRA has made it abundantly clear that intimidation and coercion are unacceptable and considered professional misconduct. In a recent advisory to licensees, the HCRA reiterated the rules and conduct expectations builders are required to follow. This was a reminder about rules such as never trying to prevent you from making a complaint or voicing your concerns.

Honouring their contracts
Builders are expected to abide by the terms of their contract. Sometimes there are legitimate reasons why a builder might ask a condo buyer to revisit a contract, like an unexpected increase in costs. However, in doing so, the HCRA expects builders to act ethically and follow the terms stated in their contract (also known as the Agreement of Purchase and Sale or APS). Builders are also expected to give condo buyers adequate time and information to respond to these requests.

Be aware that builders are legally required to include a Condominium Information Sheet as the first page of the APS for all new condo buyers. This sheet highlights important and potential risks of buying a pre-construction condo, helping purchasers to make more informed decisions.

Reaching out

The condo market can be complicated to navigate, and it makes sense for you to get as much information as possible to make the right decisions.

The HCRA’s top priority is protecting homebuyers and providing a confident path to home ownership. As a regulatory authority, it’s the HCRA’s job to uphold the standards of the industry.

Visit the HCRA website (hcraontario.ca) for resources and support in making the condo buying journey the exciting, positive experience it should be.