A developer who had faced the possibility of receiving more than $30 million in fines from Ontario’s Housing Construction Regulatory Authority (HCRA) has had all charges against him dropped.
In the largest case ever brought before the HCRA disciplinary committee, Briarwood Development Group was accused of violating the province’s code of ethics for home builders by forcing 142 buyers to pay more for pre-construction homes, so tThey had already paid deposits and signed agreements, ultimately extracting more than $18 million.
All charges against Briarwood were dismissed or withdrawn last month after HCRA failed to prove its case or present substantial evidence.
Briarwood attorneys are celebrating the outcome and insistThe developer acted ethically and transparently with buyers.
Many buyers and advocates, however, say the result shows that the HCRA is failing regulate the inindustry and They are asking the province to intervene. Some buyers who rejected Briarwood’s price increase say they are still in limbo years later, still without their homes.
“This is a horrible precedent for future b“Buyers need confidence that what they sign for is what they will get.”
The accusations date back to 2022
Briarwood faced accusations relatinglinked to pre-construction developments in four Ontario communities: Stayner, Angus, Quinte West and Georgina.
CBC first reported in 2022 about bbuyers who had already signed agreements with Briarwood and then faced demands from the developer for moremy money Buyers said they were presented with two options: pay more or end the sales agreement entirely.
Briarwood has said the price increases were due to supply chain issues and increased costs during the COVID-19 pandemic.
After receiving many complaints, the HCRA alleged that 142 buyers were forced to pay more. The regulator alleged that this violated the code of ethics of the New Home Construction Licensing Act, which requires builders to “treat all persons with whom the licensee deals fairly, honestly and with integrity.”
The HCRA took his allegations to its disciplinary committee.tee, which acts independently of the staff.
If the commitmentI agreedIf Briarwood violated the code of ethics, the developer could have been forced to refund more than $18 million to affected buyers, and could also have faced additional fines of up to $100,000 per charge, totaling more than $32 million.
The buyers, both those who had paid more and those who had refused, were anxiously awaiting the result.
“I was hoping that [the] The regulatory authority will force them to fulfill the contract because [a] contract is [a] The contract and its wording must be respected by both parties,” said Jagat Patel, who along with his wifewe have reThey merged to pay an extra $175,000 for the house in Stayner for which they signed a deal, which six years later is still not complete.
HCRA did not provide evidence
Instead, Patel is disappointed and doesn’t know where to turn next.
During the disciplinary committee hearings, the HCRA case fell apart. His expert, who was going to talk about the impactt of the COVID-19 pandemic orn developers, he was disqualified after Briarwood’s lawyers successfully argued that he had no relevant experience related to residential construction.
HCRA presented the committee with evidence relating to 14 of the properties, including six witnesses who were purchasers of five of the properties. howesee, he didn’t show ddirect evidence related to the remaining 128 properties.
When Briarwood attorneys asked about HCRA’s actions Inspections Manager Justin Vetro on several specific buyers rerevealed that he had not spoken directly to them to gather evidence. He also said he didn’t know If the regulator had contacted any of the remaining 128 buyers.
Justin Nasseri, one of Briarwood’s lawyers told CBC News that the buyers had the “time and “space” to make decisions and signed the amendments freely. His clientele also arguesit wasn’t bBe “proactive” and be honest with buyers.but it’s okayfinancial challenges and try to reach agreements that work for everyone. He said the potential fines would have put his company out of business. client ad “it has been a death sentence” for him developments.
“It was surprising to see them [HCRA] to take such an aggressive position when they had no witnesses to testify to any misconduct, even in most of the accusations,” Nasseri said.
Briarwood’s attorneys filed a non-suit motion on 128 of the counts, citing a lack of evidence. The committee accepted that motion and dismissed those charges.
The remaining 14 charges were dropped days later by HCRA as part of a resolution. Neither HCRA nor Nasseri said what the resolution entailed.
The regulator defends the investigation
Upon learning of the outcome, Aaron, the real estate attorney, says he believes HCRA “got very wrong” by failing to gather and prepare adequate evidence.
HCRA declined CBC Toronto’s interview request. When asked why staff didn’t gather evidence from most buyers, communications director Tess Lin said in an email that “we followed the process diligently and presented the facts we had at our disposal.”
Lin said the result was “disappointing,” but said the regulator “w“I will apply the lessons learned from this case to strengthen how we approach future referrals.”
MP Tom Rakocevic, NDP critic on public and business service delivery and contracting, says he is “shocked and disappointed” by the outcome and is concerned the regulator is not adequately protecting homebuyers.
“Maybe they need to change their team members and staff to be able to carry this out. How come they don’t have enough evidence?” Rakocevič said.
Ontario Premier Doug Ford previously promised to crack down on home builders.at high prices for pre-construction buyers. CBC Toronto has reached out to your office to ask if you’re satisfied the HCRA is working as it should to protect homebuyers. Ford’s office did not respond, but referred the request to the Ministry of Contracting and Provision of Public and Business Services. In an email, a spokesperson noted that HCRA operates at arm’s length with the government and directed questions to the regulator.
Litigation last option for buyers
Jagat Patel, the home buyer who refused to pay more, is not sure if he will ever get the house he dreamed of in Stayner. He and his wife hoped to move from their home in Brampton to a more affordable home and community so they could enjoy a quieter lifestyle and help fund their children’s education.
Patel is among the buyers who complained to the HCRA. Now that the disciplinary procedure has concluded, the regulator says it can take no further action.
Patel said Briarwood has not responded to his recent emails.
Nasseri said he could not comment on ongoing talks between Briarwood and any individual buyer.
Nasseri said that every buyer alwayshas a third option, if they reject both a price increase and the option to sign an agreement to terminate the contract.
“You can insist on your contract,” Nasseri said. “You can litigate.”
Patel says hiring a lawyer will probably be their next step, although he’s not sure they can afford it.
