In what is the first major sanction since it was founded in 2021 the Home Construction Regulatory Authority (HCRA) has shut down ADI Developments and forced the cancellation of a number of planned projects by the Burlington firm.
In an executive summary the agency says, ADI tried to squeeze purchasers for more money after they had paid deposits and entered into sales agreements for condos. The statement reads in part, “ADI…has cancelled hundreds of purchase and sales agreements for condominium units in order to increase its profits. It expects purchasers under existing agreement to pay hundreds of thousands of dollars more for their units. For those who are unwilling to do so, ADI…will only return deposits once a new purchaser comes along who is prepared to pay the increased price. Not only is this unethical and a violation of both the NHCLA and the Ontario New Home Warranties Plan Act, but it raises concerns about ADI’s financial responsibility and competency.”
The statement went on to say that their requests for information from ADI “were met with delays, incomplete responses, and falsified documents.” The order applies to nine separate companies under the ADI umbrella, headed by Tariq Adi. The order will not apply to three projects that have been commenced at 374 Martha Street, 4880 Valera Road and 4853 Thomas Alton Boulevard in Burlington, noting “The HCRA does not want to put purchasers further at risk by cancelling these projects mid-construction.” But added the company will not be permitted to commence any additional projects.”
Bob Aaron, real estate lawyer at Aaron & Aaron Barristers and Solicitors, told STOREYS Real Estate News “this is the first such act of enforcement made by the HCRA since its formation as a standalone regulator outside of Tarion in 2021. The inability of Adi to obtain an HCRA licence (formerly a Tarion Registration) essentially shuts them down, barring their ability to vend or build any new projects.”
“Anybody who sells new construction without being licenced can be fined, and in fact, there have been cases where unlicenced builders have gone to jail for exactly that thing, selling unlicenced properties,” he says.
“If they try to sell new projects they will not have a Tarion licence and that will be disclosed in the agreements of purchase and sale, and nobody’s going to buy it if there’s no Tarion warranty.”
The developer has the right to appeal the order within 15 days.