HCRA: Illegal Building

Before we talk about illegal building, one thing to be clear about: what is a "new home"?

The simple answer: a home nobody has ever lived in. If the last owner or tenant of a home was… no one, it's new. That includes:

• Pre-construction condos (bought from a floor plan before the building is up).
• Freshly built detached houses, semi-detached houses, and townhouses.
• Newly finished condo units that have never been occupied.

Once someone has lived in the home — even for a day — it's considered resale, not new. Resale homes don't fall under HCRA's builder-licence rules. They're covered by other consumer protections instead.

HCRA groups illegal building into three specific things. Any one of them puts you at risk:

1. Building a new home without a builder's licence. The person or company hammering nails and pouring foundations is not registered with HCRA.
2. Selling a new, unoccupied home without a licence. The person you're signing the purchase agreement with is not registered with HCRA — even if a different (licensed) company did the physical building.
3. Building a new home that has not been enrolled with Tarion — or selling one that has not qualified for Tarion enrolment. Tarion is Ontario's new-home warranty program. It covers you for deposits, delayed closings, and problems with the house for up to 7 years. If the home isn't enrolled, that safety net doesn't exist.

Working with an unlicensed builder isn't just a paperwork problem. Here's what can actually go wrong:

• Structural defects and poor workmanship. A licensed builder had to prove they know the Ontario Building Code. An unlicensed one didn't. The home might not meet code. Worst case, it might not be safe to live in.
• Liability issues. Licensed builders follow a Code of Ethics that HCRA enforces. Unlicensed ones follow no code. You could be dealing with someone with a history of bad conduct, and the legal recourse is much harder.
• Financial exposure. Licensed builders have to prove they carry insurance and are financially responsible. Unlicensed ones don't. If the builder goes bankrupt mid-construction — or just disappears — your deposit and your investment may be gone.
• No warranty protection. Because the home isn't enrolled with Tarion, you lose the deposit protection, delayed-occupancy compensation, and the 1-year, 2-year, and 7-year warranty coverage that legal new-home buyers get.

This is the single most important thing in this whole article. Before you sign any contract with a new-home builder, look them up on the Ontario Builder Directory.

How to do it:

1. Go to the Ontario Builder Directory.
2. Type in the builder's or seller's exact company name (as it appears on the contract you're about to sign).
3. Check that they show up as licensed and active — not "revoked", "suspended", or "not found".
4. Read their recent history. HCRA lists disciplinary actions, complaints, and any conditions on their licence right on the profile.

If the builder doesn't show up at all, or if their status is anything other than active, walk away. Don't sign, don't put down a deposit, don't wait for them to "sort it out". Contact HCRA to report it (see below).

If you suspect someone is building or selling a new home without a licence — whether you're a potential buyer, a neighbour who noticed something off, or a professional in the industry — HCRA wants to hear about it.

Fastest path: file an illegal building complaint form on HCRA's website. You can also reach HCRA through their contact page.

Include everything you have: the person or company's name, address of the property being built or sold, any contracts or marketing materials you've seen, and screenshots of listings if there are any. Complaints can be submitted anonymously.

Different problem — a licensed builder behaving badly? That's not "illegal building". It's a professional-conduct concern. Report those through HCRA's regular complaints page instead.

HCRA takes illegal building seriously. Their Investigations team has been growing, and they use a full range of tools:

• Charges. HCRA can lay formal charges against individuals and companies. Repeat offenders face bigger penalties.
• Administrative penalties (fines). Similar to a fine, but issued by HCRA directly without going to court.
• Returned funds. In some cases, HCRA has returned money to purchasers who were harmed by illegal builders.
• Voluntary compliance. Not every case ends in a penalty. HCRA also pushes unlicensed builders to get licensed and enrol their projects with Tarion — bringing them into the legal system rather than driving them further underground.

HCRA also works with municipalities, city building officials, real estate professionals, and other regulators to catch illegal activity earlier.

All of the disciplinary decisions HCRA has issued are publicly available on the Ontario Builder Directory — so a licensed builder with a bad track record is visible to any buyer who looks.

• "The developer's a big name, so they must be licensed." Not always. Big developer names are usually fine, but the actual selling entity might be a numbered company that isn't the parent. Always look up the exact company name on your contract.
• "Once I've signed, I'm locked in." If you signed with an unlicensed builder, you may have grounds to void the deal. Talk to a real estate lawyer immediately — don't just accept it.
• "My builder said 'Tarion is expensive, we skipped it'." That's the definition of illegal building. Walk away. Report them.
• "It's just a small renovation, HCRA doesn't apply." True — HCRA is about brand-new homes. Renovations to an existing home are handled differently. But if the "renovation" is really tearing down 90% of a house and building fresh, the line gets blurry. When in doubt, ask a lawyer.
• "I checked once when I signed. I don't need to check again." A builder's licence can be suspended or revoked between when you sign and when the home closes. If closing is more than 6 months away, check again a month before your closing date.