Recently, the Home Construction Regulatory Authority (HCRA) revoked Mariman Homes’ license to build and sell homes in Ontario. This is the strictest action the authority can take against a licensed builder.
What happened
Due to complaints from purchasers, the HCRA suspended the Hamilton builder’s license last December. An inspection showed it had entered into agreements of purchase and sale for 108 homes without proper authorization and enrollment in Tarion’s warranty program (a requirement to legally build and sell homes in Ontario).
Also, the HCRA discovered that Mariman had allowed its creditors to seek improper price increases from purchasers and failed to hold the deposits it received in trust (as was required under the company’s purchase agreements).
To minimize the impact on purchasers, the HCRA gave Mariman the chance to enroll the homes and prove it could complete construction within the timeframe and price it had committed to. This was done to find a solution that would still allow purchasers to obtain their homes.
Unmet commitments result in revoked license and fines of $400,000
When Mariman was unable to satisfy its commitments, the HCRA revoked its license and ordered it to pay $400,000 in administrative penalties. In the end, the company sold over 100 homes it was not authorized to sell.
“Given these infractions, including a history of financial mismanagement, the HCRA has revoked Mariman’s license to build and sell new homes,” says Wendy Moir, chief executive officer and registrar of the HCRA. “This builder’s past and present conduct raises serious doubts about its ability to operate their business lawfully and with honesty and integrity.”
A ‘textbook example of why builders and sellers must go through the licensing and enrollment process’
Moir stresses, “This is a textbook example of why builders and sellers must go through the licensing and enrollment process. These standards are designed to ensure builders have the competency and financial capability to operate a business before they collect money from purchasers.”
Mariman is currently undergoing receivership proceedings in the Ontario Superior Court of Justice. Tarion is monitoring the situation for any impact on deposit protection coverage for purchasers.
