new home construction

Toronto developers who cancel new home construction projects could soon face hefty fines

Ontario wants to crack down on developers who illegally cancel new home construction projects by issuing hefty fines.

Provincial Minister of Public and Business Service Delivery Kaleed Rasheed has revealed plans to double the maximum fines for unethical builders and developers who unfairly cancel a new home project or purchase agreement.

The proposed changes under the New Home Construction Licensing Act (NHCLA) would, if passed, increase the existing fines from $25,000 to $50,000 per infraction. Developers could be liable for hundreds of thousands of dollars for each unfairly cancelled contract, and could also permanently lose their builder’s licence.

The fine for individual developers who repeatedly violate the NHCLA would jump from $50,000 to $100,000, while corporations could be charged $500,000 instead of $250,000. Individuals found guilty of violating the act could also face up to two years in prison.

"This type of appalling behaviour will not be tolerated on our government’s watch," Rasheed said. "We are putting unethical developers on notice…Any predatory builders will think twice before trying to rip off an Ontario homebuyer."

The proposed changes would also enable the Home Construction Regulatory Authority (HCRA) to use the funds from said penalties to repay affected consumers retroactively to April 14, 2022.

If passed, Ontario would become the first jurisdiction in Canada to compensate consumers in such a way.

"Hard-working Ontarians deserve to be treated fairly when making one of the biggest purchases of their lives, a new home," Rasheed said.

"With these stiffer penalties, we are cracking down on bad actors and taking a zero-tolerance approach to unethical and illegal behaviour by builders and vendors of pre-construction projects. Instead of profiting on bad behaviour, they will face hundreds of thousands of dollars in fines that will go back into the pockets of their victims."

Several high-profile developments have been axed across the city in recent years, including the East Junction Condos on Symington Avenue, The Step near Islington and Finch, and the east end's On The Danforth.

While buyers get their deposits back, they lose out on any interest they mave accrued and are left to re-enter Toronto's increasingly-expensive real estate market.

Lead photo by

Richelle Forsey

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