New homes under construction by Albion Building Consultant Inc. at 57A Jeavons Ave, Scarborough.Shane Dingman/The Globe and Mail
The extraordinary measures Ontario’s new homes regulator is taking to deal with a Toronto builder with a history of sanctions highlight the challenge posed by unlicensed builders.
On March 19, the Home Construction Regulatory Authority (HCRA) froze the assets of Albion Building Consultant Inc. Court documents said that an investigation found evidence that the company took money for as many as 53 separate homes in Toronto it did not have the proper licences to build or sell.
The number of homes allegedly illegally built by Albion is several times larger than previously believed, which the HCRA said prompted it to invoke rarely used powers.
The freezing of assets was not punitive, but “to hold any purchaser funds in trust … to prohibit [Albion] from transferring any assets [and] to preserve the deposits for the benefit of homebuyers,” said Wendy Moir, the HCRA’s chief executive officer and registrar.
Ontario’s new home regulations are split between two delegated authorities, HCRA and Tarion. HCRA, which was launched in 2021, licenses builders and polices their conduct. Tarion approves the number of homes a builder can enroll in its home warranty program, an insurance pool that protects new home deposits and serves as a backstop for builder defect complaints.
If homes are built or sold without licences, they cannot be enrolled in the Tarion program, limiting the buyers’ recourse in the event of defaults by the builder.
“The HCRA is taking appropriate action to protect the public and send a clear message to the industry that those who act unlawfully or unethically will be held accountable,” said Ms. Moir.
The principals of Albion – Zamal Hossain and his wife Farida Haque – have already been convicted four times for regulatory offences related to 16 homes built without licences between 2016 and 2022. But in a search warrant application the HCRA filed on Feb. 20 with the Ontario Court of Justice, the agency outlines dozens of other new-build homes Albion is alleged to have sold or constructed. Those allegations have yet to be proven in court.
The warrant is only the second one the relatively new agency has served. It allowed investigators to comb through Albion’s office at 3028 Danforth Ave. in Toronto for any records of contracts and agreements with buyers about the homes, contracts with trades and subtrades, contact information for the new home purchasers and any correspondence between Albion and purchasers about the new homes.
“We got a lot of information from them – a van full of documents,” said Ms. Moir. “We have hundreds of documents to go through,” she said. “This is one of our largest investigations.”
Albion’s business has been to tear down a single detached home, split the lot and then construct two new homes on the old site. The HCRA warrant suggests the majority of the 53 suspected unlicensed homes are lot-splits located mainly in Scarborough. It’s unclear as yet how many homes the company actually completed.
In the past, Tarion extended a licence to build homes to Mr. Hossain and Albion, but limited the number of new homes he was allowed to enroll into its insurance program.
The evidence HCRA submitted for the search warrant suggests that the actual number of unlicensed homes built by Albion was several times higher than Mr. Hossain admitted.
Mr. Hossain didn’t respond to requests for comment for this story, but in 2023 he offered this comment to The Globe on his previous convictions: “Yes I broke the law. I did the house without the Tarion [new home warranty]. … I didn’t murder anybody.”
According to Ms. Moir, there’s no clear tally of how many unlicensed builders there are in the province. She notes that it is not illegal to build your own home without a licence. But if you hire a contractor to do it, they must be licensed.
“We’ve seen an 80-per-cent increase in illegal building complaints since last year,” she said. “I don’t think it’s more illegal building, we think it’s more awareness.”
Neil Rodgers, Interim CEO of the Ontario Home Builders Association, said the Albion case puts a spotlight on the need for regulatory fixes to tackle illegal vending where an unlicensed builder takes deposits to build homes they aren’t entitled to sell or build.
“There has to be a pro-active regulatory regime,” said Mr. Rodgers. “There needs to be a system put in place that allows for what I’m going to call early warning tracking, whereby purchasers or their agents or their solicitors could register their agreements of purchase and sale with HCRA or Tarion. If there’s a pattern that’s emerging it gives the regulator an opportunity to intervene much faster.”
Mr. Rodgers likens this requirement on buyers to share details of their agreement of purchase and sale’s with HCRA or another agency as similar to mailing a warranty card for an electronic appliance, and says he’s calling on the province for consultations on changes to the requirements.
Karen Somerville of the consumer lobby group Canadians for Properly Built Homes (CPBH) doesn’t agree the burden should be on consumers to identify unlicensed builders, and points to a different screening where there’s already been pilot programs in the past: construction permitting.
“CPBH proposes that the municipality has the responsibility to notify HCRA given the information available in the building permit application,” Ms. Somerville said. “This would result in government organizations working together using information they already have to identify unlicensed builders.”