Licence Revoked! Ontario Developer Banned from Building or Selling Homes After Engaging in a Series of Illegal and Unethical Activities

By Slonee Malhotra

Pinetree Developers Inc. (“Pinetree”) is no longer allowed to build or sell homes in Ontario after the Home Construction Regulatory Authority (HCRA) revoked its developer licence on June 1, 2023. The situation underscores how important it is for developers to retain legal counsel to ensure their construction projects comply with all laws and regulations.

The HCRA

On February 1, 2021, the HCRA became the Ontario regulatory authority of new home builders and vendors. The HCRA administers the New Home Construction Licensing Act, 2017 and associated regulations, including the Code of Ethics and Discipline and Appeals Committees.[1] With a mission to be “a fair, effective, and proactive regulator of new home builders and vendors that ensures a positive consumer experience,” the HCRA enforces professional standards in the homebuilding industry.[2]

The Investigation

In December 2022, the HCRA began investigating Pinetree’s business operations after receiving several complaints about the developer’s practices. These complaints were substantiated as the HCRA found that Pinetree engaged in a pattern of illegal and unethical conduct, including:[3]

• Signing an agreement of purchase and sale with a buyer of a pre-build home, then breaching that agreement by demanding a higher price for the property under construction, before finally attempting to sell the same property at a higher price when the original purchaser refused to pay for the increase.
• Failing to fulfill its warranty obligations by not enrolling properties with Tarion.
• Falsifying the credentials of the builder of four new properties to obtain building permits from the City of Mississauga.
• Constructing a home before being issued a building permit and ignoring the City of Mississauga’s orders to cease building the home.
• Failing to respond to HCRA inspection letters and compliance orders.

When the HCRA issued Pinetree its notice of impending licence revocation, the developer neglected to file an appeal of the decision. As a result, Pinetree’s licence was revoked immediately.

The decision follows a related infraction that Pinetree faced in 2018, where the company was charged and convicted for illegally acting as a vendor of a new home. At the time, Pinetree’s director, Patricia Perruzza, was also charged and convicted for illegally building and selling a new home.

As noted by Wendy Moir, the HCRA’s Chief Executive Officer and Registrar, “Any one of these actions would be cause for concern. Together they show a company unfit for a licence."[4]

Conclusion

The HCRA has put developers on notice that it is cracking down on bad actors in the homebuilding industry. We recently wrote an article about another developer that received notice from the HCRA about its licence being revoked. In that situation, the developer and the HCRA eventually worked together to come to a mutually beneficial resolution; the developer kept its licence in exchange for paying a penalty fee and making a voluntary payment to the purchasers impacted by its conduct.

Ontario developers must ensure that their conduct falls in line with any applicable laws and regulations, lest they risk paying a hefty penalty fee or loss of their licence to build and sell homes. As the HCRA continues to monitor new home builders and vendors, the best way to ensure compliance is for developers to consult with legal counsel.

If you have questions, please reach out to one of our qualified condo development lawyers such as Slonee Malhotra (slonee@sorbaralaw.com).