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Halton police say Ontario builder charged with nine counts of fraud, more than $800,000 in deposit money unaccounted

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A tiny home under construction by Little Creek Homes.Aaron Hughes

An Ontario builder of so-called “tiny homes” has been charged with fraud and police say 11 victims have now come forward, with more than $800,000 of deposit money unaccounted for.

Tiny homes – modular dwellings often as small as 300 square feet – are a relatively new phenomenon that straddle a line between an affordable home ownership option and a lifestyle devoted to radical simplicity. But because they are often built in a workshop and then transported and installed on a parcel of land, tiny home builders and buyers can fall through gaps in existing regulatory requirements and protections.

Halton Police Regional Services said on May 3 that Philip Bradley, 58, was arrested and charged with nine counts of fraud over $5,000. He has since been released on bail and is expected back in court on June 19. Since his arrest, more victims have come forward according to Det. Constable Kevin Harvey of the Halton Regional fraud unit.

“I can tell you all the confirmed victims are within Ontario, although [Mr. Bradley] advertised having customers in the United States,” said Det. Constable Harvey. He was unable to comment on whether any money has been recovered.

Police say Mr. Bradley operated a company called Little Creek Homes that between 2021 and 2022 allegedly collected deposits and perhaps even full purchase prices of mini-homes he claimed to be building in a Mississauga warehouse. None of the victims ever received their tiny homes, some of which were to be delivered in as few as three months after contracts were signed.

Halton police said that in mid-2022 there was a fire at Mr. Bradley’s warehouse which may have damaged some of the units, and that Mr. Bradley blamed the fire for some delays in delivery.

Two civil suits have been filed in Ontario Superior Court alleging Mr. Bradley took money and failed to deliver on his promises before eventually “ghosting” his clients.

Chelsea Bradley (no relation) and Aaron Hughes allege in their statement of claim they paid Mr. Bradley $154,286 in a series of installments starting in September, 2021. In December, 2021, the couple visited Mr. Bradley’s facility and took photos as they stood alongside a partially completed structure that they believed was to be their mini home. In their statement of claim, they allege Mr. Bradley later sold that same unit to another buyer.

Ms. Bradley said the couple did not know Tiny Creek was unlicensed and that they therefore had no regulatory protections. “We assumed that was something everyone had,” she said. The couple said their relationship with Mr. Bradley broke down in late 2022.

In February, 2021, Ontario’s Home Construction Regulatory Authority (HCRA) issued an advisory clarifying that the difference between a traditional trailer-home and a tiny home comes down to whether it is attached to a foundation.

“‘Permanent foundation’ is a key point. If the builder is putting in the foundation, a license is required. If the property owner is responsible for the foundation – with the builder constructing the home and dropping it off – a license is not needed,” said Tess Lin, director of communications and stakeholder relations with HCRA.

That distinction can cause problems for home buyers who work with a builder manufacturing tiny homes in a factory – as Tiny Creek was attempting to do – because the manufacturer may not need to be licensed, and therefore cannot offer clients deposit protections under the Ontario New Home Warranties Plan Act.

“An eligible home would benefit from the protections under the warranty (i.e., deposit protection, delayed closing, constructions warranties, etc.),” said Andrew Donnachie, manager of media and stakeholder relations with Tarion, the Ontario home warranty provider. Tarion’s most relevant protection in the Bradley case is deposit protection: up to $40,000 would be covered so long as a tiny home meets “minimum requirements for a residential dwelling under the Ontario Building Code.” However, in order for a buyer to get those protections “the vendor and/or builder of the home would need to be licensed by the HCRA.”

That puts the tiny home community in a catch-22: many don’t want to deal with the red tape of Tarion and HCRA, but without regulation their clients are exposed to huge amounts of risk.

“It does create quite a lot of confusion for the consumer who doesn’t know these things, and really … shouldn’t be expected to. That’s why we have Tarion and home warranties,” said Andrew Jia, a lawyer who is representing Ms. Bradley and Mr. Hughes. “This is a new space that the government needs to take a long hard look at.”

There aren’t many builders of tiny homes in operation in Ontario, but Daniel Ott of True North Tiny Homes, Inc., said he has delivered about 25 of them and he has no interest in getting a HCRA licence.

“I don’t think that’s needed or wanted,” Mr. Ott said. “Some of the building permits I’ve had over the years have taken four years or more … because of how convoluted the rules are and how many different authorities are involved. So, to add another authority to that mix is just ludicrous.”

Ms. Bradley actually consulted with Mr. Ott before finding Mr. Bradley’s Tiny Creek company in a Google search. As a former homeowner struggling to afford a new home in the booming market of 2021 she was against red tape too, once.

“I would have said that before, but please, add the red tape: people are getting their shirts stolen without it,” she said. “We’re talking to you from my parents basement, we gave up the place we were renting. All of our dreams are gone, we will be basically paying back high-interest loans for the rest of our lives.”

Bianca Metz owns her own tiny home and through her consulting services for the tiny-curious she has become something of a spokesperson for the industry. Her advice is to hire a traditional HCRA registered builder who has experience building garden suites or other so-called additional dwelling units (ADUs). “Those builders will be Tarion certified, they will have a track record; those are the low-hanging fruit to do this safely,” she said.

But Mr. Ott warns that if government were to tighten the rules to cover manufactured home builders such as himself it will just drive the industry underground.

“It just makes the honest people have to go through more paperwork and, and the people who weren’t … they’re still gonna somehow scam people into buying from them,” he said. “They would say ‘Forget that new rule, I’m just going to start doing work for cash now,’ because they just can’t deal with more rules.”

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