Ontario regulator revokes licenses of two homebuilders

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Ontario’s fledgling Home Construction Regulatory Authority (HCRA) has revoked the licences of two homebuilders.

Last week, the HCRA said that Zamal Hossain and his business Albion Building Consultant Inc. had built 16 homes it was not licensed to build over the past six years and revoked its licence. It cited previous convictions in the Ontario Court of Justice for failing to enroll new homes in the province’s new home warranty program, Tarion. Albion unsuccessfully appealed the HCRA decision at the Licence Appeal Tribunal (LAT) last month. The company has yet to pay a $206,250 fine levied against it, but despite that, the LAT has allowed Mr. Hossain a year to finish six houses he has already started construction on.

On Tuesday, the HCRA froze the assets and suspended the licence of Orleans, Ont.-based Highbridge Construction. The company appears to have ceased operations on Feb. 3.

Mr. Hossain was unrepentant in speaking to The Globe after the announcement. “Yes I broke the law, I did the house without the Tarion [new home warranty] … but again, none of the consumer or clients has been complaining. … I didn’t murder anybody,” he said. According to the HCRA, the illegal homebuilding case against Mr. Hossain began with a complaint by a member of the public.

In its application, the HCRA points out that Albion was convicted of illegal homebuilding four times between 2016 and 2019 before it was able to eventually register with Tarion as a licensed homebuilder. Even after it obtained its licence, Albion continued to build at least 11 more homes than it was eligible to build, facts Mr. Hossain admitted to during the investigation. In 2021, Tarion handed over its responsibilities for licensing and regulating homebuilders to the newly created HCRA.

“The HCRA was set up to crack down on illegal and unethical builders,” said Wendy Moir Acheson, registrar and CEO of the HCRA, and she points to new powers her agency has to fulfill that mission. In February of this year HCRA gained the power to levy administrative penalties or fines against illegal builders, and the HCRA also has a code of ethics it can enforce.

“There is that concept of voluntary compliance, which is you want people that are in the black market to come above ground. You want to bring people on board, but only to a certain extent – we don’t want people that are sort of ungovernable as part of our licensing body,” she said. “We do want people to be licensed and build homes. … Do we think they can start operating in compliance with the law? If the answer is no, in those cases we wouldn’t want them to be licensed.”

In its ruling, the LAT was unequivocal.

“I find that the past and present conduct of the directors and officers of the appellant do not afford reasonable grounds for belief that the appellant’s business will be carried on in accordance with the law and with integrity and honesty,” wrote Colin Osterberg, vice-chair of the LAT in his ruling against Albion.

Mr. Hossain said he hopes he can continue his business. “In my opinion they should give me the opportunity to build homes; they should try one more time,” Mr. Hossain said.

Mr. Hossain also said he expects his licence to trade in real estate should also be restored, after it was terminated by the Real Estate Council of Ontario (RECO) because he did not report, as required, his convictions for illegally building homes between 2016 and 2021.

In 2022, Ontario Auditor-General Bonnie Lysyk concluded that RECO had no system for catching registrants who failed to report convictions. “RECO could not demonstrate how it met its requirements under the Act when assessing applicants who had a past criminal charge or conviction,” the report reads. The AG could find no reason in RECOs records why it approved registration of “individuals convicted of crimes such as fraud, physical violence – including assault and assault with a weapon.” RECO has committed to building a better system by the end of 2023.

On May 6, 2022, Mr. Hossain pleaded guilty to “furnishing false information on an application for registration” and failing to notify the regulator of a change to his information, and was fined $6,000. When RECO terminates a registrant it purges its directory of agents, putting information on their disciplinary record elsewhere on its website.

Mr. Hossain’s wife and business partner Farida Haque pleaded guilty to the same charge and paid the same fine, but is still a registered salesperson and, as of Feb. 15, there was no reference to her conviction in the “discipline history” section of her RECO registry entry. After The Globe and Mail contacted RECO for comment, the registry was updated sometime before Feb. 20.

Mr. Hossain is still listed as a realtor on the website for Sutton Group Tower Realty Ltd., and his name and the title “broker” still appears on signs for his real estate and building business. Holding yourself out as a registered realtor when you are not is another infraction under the Trust In Real Estate Services Act (2020).

“We are aware that in some instances, there are gaps in the information on our website and we are actively working to resolve these gaps and update our processes,” said Joseph Richer, RECO registrar, in a statement to The Globe. “We have updated our website and the convictions are on the public register and convictions page. If a real estate agent ceases to be registered with RECO, they are no longer permitted to engage in any activities that require registration, including advertising themself as a salesperson. If RECO receives a complaint about an unregistered individual advertising themself as a salesperson, RECO will investigate and prosecute, which may result in fines.”