A New Code of Ethics for Ontario Homebuilders Introduced

 In Real Estate Law

As the demand for new houses continues to rise in Ontario it is no surprise that complaints about the home building process have risen too. Cities across the province have cited an uptick in building issues. Complaints range from unlicensed builders and contractors building homes, significant delays, increased costs to complete the home and general uncertainty about the home building process and what consumers can and should expect. Thus, it was welcome news when in February 2021, the Ontario Government created a new regulator, the Home Construction Regulation Authority (HCRA) to oversee the booming homebuilding industry. As part of this program, on July 1st, 2021, the government enacted a Code of Ethics for homebuilders in the province.

The Code of Ethics for Ontario Home Builders

The Code of Ethics is the first of its kind in Ontario. While there are Codes of Ethics that govern other professionals like lawyers, doctors, and real estate agents there has never been a Code of Ethics for homebuilders. The Provincial Government hopes the establishment of the Code will show respect to home builders and their employees, as they are being regulated like other skilled professionals, while also increasing consumer protection. The Code of Ethics is a tool that the HCRA can use to ensure builders and consumers alike are aware of the standards building professional are expected to meet.

Some of the key features of the code are:

  • Treating people honestly and with integrity
  • Not engaging in discrimination, harassment or bullying
  • Providing reasonable accommodations to those with disabilities
  • Ensuring the health and safety of people is protected
  • Providing courteous and responsive service while demonstrating knowledge, skill, judgment, and competence
  • Not engaging in or being a party to misrepresentation
  • Ensuring the use of all forms and documents as required by law
  • Complying with the laws in every jurisdiction in which the licensee carries on business
  • Being truthful and clear in descriptions of features, benefits and prices connected with a new home

While these may seem like basic requirements, the Code seeks to crack down on the differences between glossy brochures, that builders often know are misrepresentative, and final products. The emphasis placed on realistic marketing will hopefully give consumers more trust in the process and help to set realistic expectations. The code also hopes to address cost discrepancies and reduce the number of disclaimers included in construction contracts. The HCRA has the right to deny licences if it feels builders are not living up to the Code of Ethics.

A New Discipline and Appeals Committee Introduced

Also introduced on July 1st, 2021, is a discipline committee and an appeals committee that will operate under the HCRA.  If a consumer brings a complaint to the HCRA they will investigate the complaint and can refer the matter to the discipline committee. The discipline committee will determine if there has been a violation of the code. If yes, a licensee may be required to attend or pay for training courses for their employees and/or be fined up to $ 25,000.

Decisions of the discipline committee may be appealed to the newly established appeals committee. There are concerns that the administrative infrastructure is not ready to handle the high volume of complaints that may come their way, and that the financial penalties are not hefty enough to discourage malpractice. However, these changes are steps in the right direction.

The recent strengthening of consumer protection will hopefully make the home building process a more enjoyable experience for all involved.

This blog post was written by Daniella Sicoli-Zupo, a Partner in the Real Estate team and Summer Law Student, Magdalena Casey.  Daniella can be reached at 613-369-0378  or at daniella.sicoli-zupo@mannlawyers.com.

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