A real estate developer that was at risk of facing over $30 million in penalties from the Home Construction Regulatory Authority (HCRA) in Ontario had all charges against them dismissed. In the largest case ever brought before the HCRA’s discipline committee, Briarwood Development Group was accused of breaching the province’s home builders’ code of ethics by pressuring 142 buyers to pay more for pre-construction homes, from which they had already made deposits and signed agreements, resulting in over $18 million in additional payments.
However, last month, all allegations against Briarwood were either dropped or withdrawn after the HCRA failed to substantiate its case with compelling evidence. Briarwood’s legal team hailed the outcome, asserting that the developer had conducted business ethically and transparently with its buyers.
Despite this, numerous buyers and advocates have criticized the HCRA’s handling of the situation, claiming it demonstrates a lack of effective industry regulation and are urging provincial intervention. Some buyers who refused to accept Briarwood’s price hike are still waiting for their homes years later, stuck in a state of uncertainty.
The accusations against Briarwood pertained to pre-construction projects in four Ontario communities: Stayner, Angus, Quinte West, and Georgina. Buyers who had already entered into agreements with Briarwood reportedly faced demands for additional funds or termination of their sales contracts. Briarwood attributed the price increases to supply chain disruptions and escalating costs during the COVID-19 pandemic.
Following numerous complaints, the HCRA alleged that 142 buyers were coerced into paying more, which was deemed a violation of the code of ethics under the New Home Construction Licensing Act. If the discipline committee had found Briarwood guilty of breaching the code, the developer could have been compelled to reimburse the affected buyers the over $18 million and faced additional fines reaching over $32 million.
During the discipline hearings, the HCRA’s case unraveled, leading to key evidence being discredited. Briarwood’s legal team successfully argued against the credibility of an expert witness appointed by the HCRA, resulting in the exclusion of crucial testimony related to the impact of the pandemic on developers. The HCRA’s evidence primarily focused on a fraction of the properties in question, lacking direct proof for the majority of the properties involved.
Justin Nasseri, representing Briarwood, defended the developer’s actions, emphasizing that buyers had sufficient time to make decisions and had voluntarily signed the revised agreements. He contended that Briarwood had been forthright about its financial challenges and aimed to reach mutually beneficial agreements. Briarwood’s lawyers motioned to dismiss 128 counts due to insufficient evidence, which the committee accepted. The remaining 14 counts were later withdrawn by the HCRA as part of a resolution.
Upon learning of the case’s outcome, real estate lawyer Bob Aaron criticized the HCRA for its alleged failure to collect and present adequate evidence. The HCRA defended its investigation process, asserting that the facts available to them were diligently presented. The regulator acknowledged the disappointing result and pledged to enhance its approach based on the lessons learned from this case.
The NDP critic for public and business service delivery and procurement, MPP Tom Rakocevic, expressed shock and disappointment over the outcome, raising concerns about the HCRA’s efficacy in safeguarding home buyers. The Ontario Premier’s office did not respond to queries regarding the HCRA’s operations but noted that the regulator operates independently from the government.
For buyers like Jagat Patel, who refused to pay additional charges, uncertainty looms over whether they will ever obtain the homes they contracted for. Patel and his spouse had hoped to relocate to a more affordable house in Stayner to enjoy a quieter lifestyle and support their children’s education. Patel indicated that he may consider legal action as his next step, though affordability remains a concern.
In conclusion, the dismissal of all charges against Briarwood highlights the complexities and challenges faced by both developers and home buyers in the real estate market, underscoring the importance of transparent and ethical business practices.
