On February 1, 2021, Ontario saw significant changes to the regulation, licensing and registration of homebuilders and vendors across the province through the designation of the Home Construction Regulatory Authority (HCRA). The HCRA is a new regulatory body established under the New Home Construction Licensing Act, 2017, S.O. 2017, c. 33, Sched. 1 that aims to assume the licensing and enforcement of professional standards of builders and vendors of new homes in Ontario.
Prior to the introduction of the HCRA, Tarion was responsible for registration of homebuilders and vendors as well as administration of what is now referred to as the Ontario New Home Warranties and Protection Plan. In 2015, the Government of Ontario initiated an independent review of the Ontario New Home Warranties Plan Act, RSO 1990, c O.31 (ONHWPA) and the Tarion Warranty Corporation which review was conducted by the Honourable J. Douglas Cunningham Q.C.. The review highlighted potential conflict regarding Tarion’s dual role as a regulator as well as a warranty provider. In response to this investigation, the HCRA was created, allowing separation of the regulation of the new home building industry from management of the warranty program.
The HCRA has now assumed Tarion’s licensing and registration responsibilities. While previously a builder or vendor would register with Tarion, this process has been replaced by a licensing regime managed by the HCRA. As of February 1, 2021, if you are a registered builder or vendor with Tarion, your Tarion registration has automatically transitioned to a licence with the HCRA and your registration number has been carried over to become your licence number. A builder must be licensed with the HCRA in order to enroll a home with Tarion and to legally build and sell new homes.
In addition to licensing, the HCRA will also handle home buyer concerns about their new homebuilder and/or vendor and will maintain an enhanced Ontario Builder Directory. The HCRA aims to improve consumer protection for new home buyers by ensuring builders and vendors are held to professional standards, promoting a fair marketplace and providing educational resources to keep consumers informed.
Tarion will continue to deliver the Ontario New Home Warranties and Protection Plan under the ONHWPA, manage warranty claims and claim payouts, and enroll new homes in the warranty and protection program.
These changes to Ontario’s homebuilding industry are important to purchasers, builders and vendors. For questions about how these changes will affect your purchase of a new home as a consumer, or your business practices as a builder or vendor, please contact Emma Cotman of our Real Estate Group.
