Canada

Ontario codifies behaviour for home builders

The code also seeks to ensure that any advertising related to new homes is not "false, misleading, deceptive or illegal."

New home builders are to behave with integrity and not engage in misleading advertising under a new code of ethics introduced by the Ontario government.

The Ontario government will introduce a code of ethics for new home builders effective July 1, the latest in a series of moves designed to enhance protection for homebuyers.

In general, the new code encourages licensed builders to behave with integrity and not intimidate or coerce potential buyers.

A key requirement is that builders “shall be clear and truthful in describing the features, benefits and prices connected with a new home.” The code also seeks to ensure that any advertising related to new homes is not “false, misleading, deceptive or illegal.”

Among other things, this section of the code appears aimed at the discrepancies that can appear between sales pitches and the actual builders’ agreements, which can include disclaimers in the builders’ favour.

Whether the provisions of the new code will prevent builders from cancelling projects only to re-introduce them later at a higher price isn’t clear.

The Home Construction Regulatory Authority — responsible for licensing new home builders — has the right to deny licences if it feels builders are not adhering to the provisions of the ethics code. It is also being equipped with committees to discipline “bad actors.”

Earlier this year, the Progressive Conservative government strengthened the focus of the new home ombudsman in favour of consumers and tightened its oversight of Tarion, the not-for-profit consumer protection agency that administers the province’s new home warranty program.

There is also a simpler appeals process for homeowners who want to dispute a warranty claim assessment.

The trigger for the government’s recent attention to new home construction has been an overheated industry that has attracted many new builders. The number of consumer complaints has, not surprisingly, risen.

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