Inside HCRA: Ontario’s new home regulator
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Ontario’s Home Construction Regulatory Authority (HCRA) is reshaping risk in new home files, from illegal flipping to builder insolvencies. Its Code of Ethics, penalties, and online Builder Directory give real estate lawyers new tools to protect clients before the deal closes
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IF THERE'S one thing James Ryu can say for certain about his role as general counsel for the Home Construction Regulatory Authority (HCRA), it’s that he’s never bored.
Originally from the financial services sector, Ryu jumped at the chance to help set precedents for a new regulator that is responsible for licensing new home builders and sellers in Ontario. HCRA uses licensing, enforcement, and education to protect what is often the largest purchase of a consumer’s life.
For Ryu’s part, he advises the HCRA’s registrar and deputy registrar on whether enforcement is warranted and what message it sends to builders, vendors, and consumers.
The Home Construction Regulatory Authority is responsible for regulating and licensing the people and companies who build and sell new homes in Ontario. The HCRA enforces high professional standards for competence and conduct in the home-building industry, giving new homebuyers confidence in one of the biggest purchases of their lives. The HCRA also maintains consistency across the sector, curtailing unethical and illegal builders. In addition to licensing, the HCRA provides educational information for consumers on their home-buying journey and hosts the Ontario Builder Directory – the authoritative source of background information about each of Ontario’s 7,000 new home builders and sellers.
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Ontario Builder Directory
a builder’s licence status
Hosted by the HCRA, this free, searchable tool provides background information on more than 7,000 licensed home builders and vendors across Ontario, including:
“We want to treat consumers with fairness, honesty, and integrity – but how does that hit the road in practice? That’s what we need to figure out, and that’s why we have an ongoing dialogue with all stakeholder partners”
James Ryu,
home construction regulatory authority (HCRA)
“It’s an interesting mix; there are always new issues, and that keeps it fresh,” Ryu, who’s been in his role for three years, explains. “It’s really an opportunity to engage in some blue-sky thinking and help steer regulation in this sector in a principles-based way.”
The HCRA is Ontario’s home-building regulator, created in 2021 when the province split licensing and regulatory functions for new home builders and vendors away from Tarion, which retained responsibility for administering the province’s warranty program.
In its enabling legislation, the government armed HCRA with new tools – notably a Code of Ethics, a mandated research and education program, and administrative penalties – to maintain and enforce standards. Ryu says it’s exciting to work with industry, government, and consumer stakeholders to fit the new code into the overall framework, including testing the right cases at tribunals and courts to set the HCRA’s benchmarks. He also enjoys the challenge of establishing the internal legal workflow, always with the support of everyone pulling toward a common goal: to protect consumers and support responsible builders.
“We all agree on the basic principles; we want to treat consumers with fairness, honesty, and integrity – but how does that hit the road in practice?” Ryu asks. “That’s what we need to figure out, and that’s why we have an ongoing dialogue with all stakeholder partners.”
responded with prosecutions and administrative penalties that can both fine and disgorge profits, and Ryu stresses this is something “both initial purchasers and their lawyers need to understand because there is risk on both ends of the transaction.”
On the construction side, Ryu points to misuse of the owner-builder exemption as another ongoing trend. Licensing is designed to ensure builders have the technical, financial, and legal competencies needed for projects that can span months to years, but owner-builders have historically been exempt because they assume the risk. HCRA is seeing exploitation of that exemption, where an unlicensed actor brands themselves as a “project manager or a construction manager” and asks the landowner to name themselves as the owner-builder on the permit application.
“The promise is a saving of a few thousand dollars, but homeowners are not being educated about the risks they’re assuming – from lack of statutory warranty coverage, to WSIB exposure, to responsibility for failed municipal inspections – by effectively naming themselves on the top line as being responsible for that project,” Ryu explains. “Many have come to HCRA after the fact quite upset to learn about their predicaments. Any situation where the real builder is hiding in the shadows and avoiding licensing obligations is a giant red flag.”
In these scenarios, HCRA’s Ontario Builder Directory is an easy way for consumers and their lawyers to protect themselves.
Hosted on HCRA’s website, it lists over 7,000 licensed builders and vendors, including how long they’ve been licensed, how many homes or units they’ve delivered, whether they have a history of regulatory contraventions with the HCRA, and whether they have disputed warranty amounts. The directory provides a quick snapshot of a builder’s track record, and it can be an early red flag if they don’t appear in it at all.
“We inherited the bones from Tarion, but it’s certainly evolved over the years,” Ryu says. “Over the course of our existence, we’ve made improvements to keep pace with the market changes. We know there’s still some road to go, but we’re always trying to make it as easy and user friendly as possible.”
One example Ryu points to is the addition of an insolvency warning flag. Added in response to the recent rise of builder insolvencies in a tough real estate market, whether a licensee is in insolvency proceedings can now be searched through the Builder Directory. Other enhancements include direct links on the homepage to HCRA regulatory actions, increasing transparency and simplifying navigation for users seeking information on enforcement activity, including court charges, convictions, and registrar orders.
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What is the HCRA?
Flips, ‘owner-builders,’ and other red flags lawyers can’t afford to miss
Published March 16, 2026
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“We’re still finding our footing in the space, so the more we hear from the real estate bar, the better for everyone. We greatly value and appreciate lawyer engagement because we know they have perspectives that we need to hear”
James Ryu,
home construction regulatory authority (HCRA)
the number of homes built
whether projects are enrolled in Ontario’s new home warranty program
any HCRA regulatory actions, including charges, convictions, or registrar orders
If a builder isn’t listed in the directory, it’s a strong warning sign they may be operating illegally.
Ryu says one of the issues HCRA sees regularly is illegal selling through flipping, driven in part by a lack of understanding among both purchasers and the lawyers who advise them. To build or sell a new home in Ontario, a licence from HCRA is required. If a purchaser buys directly from a licensed builder or vendor and then turns around and resells the home without ever occupying it, that can be a contravention of the law.
The real consumer protection concern arises for the ultimate end user who may lose the important 30-day reporting period for deficiencies. The regulator has
HCRA’s Ontario Builder Directory
“If you’re a lawyer serving clients in the new-home residential market or the resale market, it’s a useful tool,” Ryu says. “For builder due diligence or confirming warranty enrollment and expiry dates, it should be your starting point.”
One of the key stakeholder groups HCRA is keen to work with is the real estate bar, whose members Ryu views as partners in the regulator’s mission to protect consumers and support a healthy industry.
“Real estate lawyers have the most impact in terms of direct contact with clients,” Ryu says. “To the extent that we can reach out to these lawyers and make them aware of who we are and what we do, the better off we’ll all be.”
That outreach is already underway, through forums such as HCRA’s Consumer and Industry Advisory Councils, webinars, and Ryu’s willingness to connect on various stages. For example, he recently had the privilege of speaking at a Law Society of Ontario event for the real estate bar.
‘We greatly value and appreciate engagement with the real estate bar’
Providing clarity on expectations is a core part of that relationship. Ryu acknowledges that a principles-based Code of Ethics creates understandable anxiety about how it will be applied in practice, and HCRA is cognizant of that apprehension. To address it, the regulator published a suite of advisories on its website, many of which tackle the common issues now surfacing in new home files, from price escalation and intimidation to illegal selling and flipping.
For Ryu, every effort comes back to HCRA’s core purpose: to support consumers and their lawyers, with no mystery involved.
“We’re still finding our footing in the space, so the more we hear from the real estate bar, the better for everyone,” Ryu says. “We
greatly value and appreciate lawyer engagement because we know they have perspectives that we need to hear.”
Learn more about the HCRA and its consumer protection mandate at hcraontario.ca and follow them on social @hcraontario.
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If a builder isn’t listed in the directory, it’s a strong warning sign they may be operating illegally.