Code of ethics for new home sales “can only be good news” for Ontario consumers, lawyer says
Consumer services

Code of ethics for new home sales “can only be good news” for Ontario consumers, lawyer says

The Ontario government has introduced a new code of ethics for builders and sellers of new homes in the province, and legal experts say it will help consumers in the real estate market as it has the potential to reduce misrepresentation in sales and eliminating bad players from the real estate market.

the coded, which comes into effect on July 1, will require licensed builders and vendors to “operate professionally with honesty, integrity, financial responsibility, and without intimidation or coercion.” Licensees are required to be “clear and truthful” in describing the features, benefits and prices of a new home and in explaining the products, services, programs and prices associated with those new homes, and any suspected violation of the code is subject to discipline by the Home Construction Regulatory Authority (HCRA).

“Since making late changes to this important industry, our number one goal has been to protect homeowners and support the ethical practices and best-in-class service of home builders and sellers,” said the Minister. Provincial Government and Consumer Services, Ross Romano. “We all benefit when we raise the bar for building quality new homes in Ontario and make it easier for buyers and homeowners to get what they pay for. ”

Toronto real estate lawyer Bob Aaron

Toronto real estate attorney Bob Aaron said the code “can only be good news” for consumers, as there have been a number of instances where builders or sellers have made promises to consumers. buyers who are included in a purchase and sale contract.

“Due to misrepresentation at the sales offices, buyers have unrealistic expectations and are disappointed when they actually receive delivery of their unit, but when you look at the contract, they haven’t made any statements about such things. that size or view in agreement, ”he said. “But now a consumer can file a complaint and if the Registrar considers it justified, it can be sent to a disciplinary committee. I think it’s wonderful when builders or sellers are going to be disciplined like any other professional body.

Edward Lynde of Singleton Urquhart Reynolds Vogel LLP said the measures are an attempt to remove bad builders from the market “because consumers don’t know which are the good and which are the bad.”

Edward Lynde of Singleton, Urquhart Reynolds Vogel LLP

Edward Lynde of Singleton, Urquhart Reynolds Vogel LLP

“And as we move towards greater consumer protection, there is also a certain degree of fairness for builders, because ethical obligations are written down and they are aware of it,” he said. “There is this real movement towards a consumer-based model because it used to be a bit like the Wild West for new construction. It’s a good step in the right direction, but like everything, we’ll have to see how it goes. ”

Leor Margulies of Robins Appleby said the new rules give consumers a safety valve, but believes their impact is slightly overestimated.

“When we have bad builders giving the industry a black eye, people use industry pressure to get them to change their ways or make amends, and good builders always do well at- beyond what they’re required to do because it’s a good idea for both customer service and longevity, ”he said.“ But I agree it shouldn’t be a self-regulating thing. ”

Lawyers will now need to highlight any discrepancies between what clients are shown as part of the sales process and how those representations may differ from disclaimers in agreements, Aaron said.

“Manufacturers are going to have to radically change their marketing practices and be much more careful in what they say to consumers, because they are now subject to this regulation and it has teeth,” he said. “Any legal and narrow deviation can be referred to the discipline committee and those results will be public, so it won’t help their reputation if one of their salespeople is going to be dragged to a discipline committee or any complaint against them is complied with. .

Improvements are also being made to the dispute resolution process at Tarion, which administers the province’s new home warranty program. It simplifies the claims process while requiring Tarion to provide claimants with expert advice when it publishes a warranty assessment report, and also allows homeowners who dispute the regulator’s assessment of their warranty claim. ask him to participate in a mediation process.

Lynde said sometimes people don’t understand the dispute resolution process at Tarion and “they’re trying to simplify something more complex – but it’s always quite complex.”

“Sometimes there isn’t much you can do to simplify things, but I like the mediation function because there is a perception of bias at Tarion towards the builders – so a mediation process that can be more profitable and independent can sort of get rid of that perception, ”he said. “I think of this real attempt to facilitate a dialogue between Tarion and the owner in order to resolve their issues and get things on the table before moving on to a more formal litigation.”

More information on the Home Building Regulatory Authority can be found here.

If you have any information, ideas for articles or tips for The Lawyer Daily please contact Ian Burns at [email protected] or dial 905-415-5906.

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