Ontario developer accused of extracting $18M from home buyers

An Ontario developer is accused of coercing 142 purchasers of pre-construction projects to pay more money for the same homes they purchased up to two years earlier — claims that are now the subject of a disciplinary committee hearing referred by the province's regulatory authority.

According to a statement of allegations listed on the Home Construction Regulatory Authority (HCRA) website, purchasers were told by Briarwood Development Group that they'd have to sign a release forfeiting their homes if they didn't agree to pay the additional amounts. It's alleged the company extracted more than $18 million from the buyers.

The allegations centre around pre-construction homes in the Ontario communities of Stayner, Angus, Quinte West and Georgina. The claims are that Briarwood demanded increases that ranged from $16,000 for an Angus project home to $320,000 for a Stayner project home.

CBC Toronto reached out to representatives from Briarwood for comment last week but did not receive a reply. According to the HCRA's hearings office, Briarwood has not yet commenced its defence and has not yet entered the documents it relies upon as exhibits.

CBC Toronto first reported on allegations made against Briarwood Homes in 2022 related to its project in Stayner. At the time, multiple buyers told CBC Toronto that Briarwood representatives told them that they needed to pay more to have their homes built or sign a release agreement that would see them lose their homes and get their deposits back. 

At that time, a Briarwood spokesperson told CBC Toronto the sudden price increase was due to supply chain issues and high costs of labour and materials linked to the pandemic. 

The disciplinary committee hearing, which is being held virtually, began Feb. 24. 

According to the HCRA's annual reports, it's received 2,606 complaints from the public since its inception in 2021. Since then, two have been heard by a disciplinary committee panel – though, per the HCRA website, one other case was stayed in 2023, and three other cases are scheduled to be heard.

A disciplinary hearing is one of many potential outcomes of a complaint filed with the HCRA. Its registrar determines the best course of action – which could include the levying of fines, license suspensions or the laying of charges under various provincial acts.

"The appropriate enforcement action for each case is determined based on the specific facts of the matter and the potential risk or harm to consumers," an HCRA spokesperson told CBC Toronto. 

According to the statement of allegations in the Briarwood case, the HCRA's registrar highlighted the relevant section of its code of ethics as the one on "fairness, honesty and integrity," which states: "In carrying on business, a licensee shall treat every person the licensee deals with fairly, honestly and with integrity."

The registrar goes on to say: "There was nothing in the APSs [agreements of purchase and sale] that allowed Briarwood to demand, or required purchasers to pay, this extra payment. As a result of these unethical price increases, Briarwood extracted a monetary benefit of over $18 million from these purchasers."

Hearings are heard before a panel made up of a certain number of people who are licensed home builders or developers (licensees), as well as members of the general public.

The disciplinary committee panel will determine whether the code of ethics has been violated. If it finds there has been a violation, there are various outcomes from a builder being ordered to take educational courses to fines of up to $100,000. However, the HCRA told CBC Toronto that if a licensee is found to have received a monetary benefit by failing to comply with the HCRA's code of ethics, it could impose a fine equal to the amount of that benefit, and those funds could then be directed to the impacted buyers.