Home construction authority moves to revoke Burlington developer’s licence
Ontario's Home Construction Regulatory Authority (HCRA) wants to revoke the licence of Adi Developments, the company that last spring demanded buyers of its Burlington Nautique condos pay hundreds of thousands of dollars more for units they agreed to purchase as far back as 2015.
Those who refused to pay the additional sum had their purchase agreements cancelled and deposits returned. But that money was only refunded once Adi resold their units - a practice that violates Ontario's New Home Construction Licensing Act and the New Home Warranties Plan Act, according to the regulator.
Not only is this unethical," said the HCRA in its Aug. 25 notice of proposal to revoke, but it also raises concerns about Adi Morgan Developments (Lakeshore) Inc.'s financial responsibility and competency."
Adi Morgan Developments (Lakeshore) is the name of the company behind the Nautique, one of nine companies under the Adi Developments umbrella," according to HCRA.
The HCRA's notice also claims that Adi refused to co-operate with its investigation that was prompted by complaints from the public. Initially, it said, the developer failed to turn over the purchase agreements and later, when it did surrender paperwork, HCRA said the contracts had been doctored - that the dates on the company's documents differed from those of the homebuyers.
Although the company notified 174 Nautique buyers on March 23 that it would be terminating its agreements, HCRA found that on June 22, only 27 purchasers had received refunds.
Adi said it has filed an appeal and plans to rigorously defend its position."
In an emailed statement late Friday, the company said it had no warning of the HCRA proposal and that Adi had lawfully terminated purchase agreements in the Lakeshore project according to regulations set out by Tarion and, (it) consulted with HCRA prior to doing so."
CEO Tariq Adi said increased costs on the Nautique project had forced the company to seek new funding to prevent bankruptcy.
Adi co-operated fully with all of the HCRA's document requests," said the statement. It noted that Adi has been working in the GTA for more than 15 years and has built more than 1,200 new homes. It expects to build more than 8,000 homes in the region over the next six years.
It added that 85 per cent of the purchasers' deposits - about $9 million - was returned as of Sept. 7. The remaining balance will be refunded by the end of the month, according to the statement that was emailed by a public relations representative.
On Thursday, a Nautique purchaser, who complained to the HCRA, said the regulator's proposal to revoke the building licence will warn future buyers who do their due diligence and it will serve as a deterrent to other builders.
This is a big blow for Adi. This is a big reputational dent for them," said Stanley Faria.
He was one of 174 purchasers the HCRA says were subject to demands to pay more for the units they bought between 2015 and 2020.
The HCRA proposal names Tariq Adi, Daniela Toma and Adam Reiterowski as the company's officers.
The regulator is proposing that six of the group's licences be revoked but Adi would be allowed to complete three Burlington projects: the Nautique at 374 Martha St. near Burlington's lakefront, as well as condos at 4880 Valera Rd. and 4853 Thomas Alton Blvd.
Although it has proposed that some Ontario builders' licences not be renewed, this the first time HCRA has moved to revoke a builder's licence, said a spokesperson.
The regulator confirmed the Adi has filed an appeal that gives it the right to a hearing before Ontario's Licence Appeal Tribunal (LAT). That request must be made within 15 days of the notice of proposal to revoke the licence. A LAT case conference will be scheduled but there's no set time in which that must occur.
If the tribunal upholds the regulator's decision and the licence holder has the option of taking the matter to a Divisional Court or the licence is removed.
The HCRA was launched in February 2021 after the Progressive Conservative government removed the home-building regulatory powers from Tarion, Ontario's new home warranty provider in 2019. The restructuring followed an auditor general's report that found Tarion was putting builders' interests ahead of consumers.