HCRA Ruling Sends Warning: ‘Unavoidable Delay’ Not a Shield for Builder Mismanagement

By Sharon Henderson

TORONTO, Nov. 10, 2025 – The Home Construction Regulatory Authority (HCRA) has delivered a stark warning to developers, refusing to renew the license of The Landing Development Group after finding the builder improperly invoked “unavoidable delay” provisions to mask financial instability and stall a 137-unit Barrie condominium project. The ruling, upheld by the Licence Appeal Tribunal (LAT), underscores a growing concern within the Ontario housing market: the potential for developers to exploit pandemic-era clauses to shield themselves from accountability, leaving homebuyers vulnerable.

The case, which centers on “The Landing at Little Lake Condos,” highlights a complex interplay of economic pressures, regulatory oversight, and the risks inherent in pre-construction home buying. While the HCRA successfully intervened to ensure purchasers eventually received their deposits, the years-long ordeal serves as a cautionary tale for prospective homebuyers and a signal that the regulator is taking a tougher stance on developer misconduct.

Financial Strain and the ‘Unavoidable Delay’ Clause
The HCRA determined that The Landing Development Group defaulted on construction loans, leading creditors to withdraw financing. Despite this, the builder retained purchaser deposits, effectively freezing funds for years while the project languished. The developer attempted to justify the delays by citing “unavoidable delays” related to the COVID-19 pandemic, a clause intended to protect builders facing legitimate disruptions. However, the HCRA and LAT found this to be a pretext for covering up deeper financial problems.

“The builder wasn’t facing genuine, unforeseen disruptions,” explained one source close to the investigation. “The delays were a symptom of poor financial planning and an inability to secure continued funding. They attempted to use the ‘unavoidable delay’ clause as a lifeline, but the regulator rightly saw through that.”

The LAT’s decision affirms that the “unavoidable delay” provision is meant to address genuine external factors, not internal financial issues. This clarification is crucial in a market where developers have increasingly relied on such clauses to navigate economic headwinds.

A Growing Risk for Homebuyers
The saga of The Landing at Little Lake Condos isn’t isolated. Experts warn that the current economic climate – characterized by fluctuating construction costs, rising interest rates, and supply chain disruptions – is creating a breeding ground for project delays and potential developer insolvencies. This puts pre-construction homebuyers at significant risk.

“The biggest vulnerability is the deposit,” explains a real estate lawyer specializing in pre-construction agreements. “Deposits are often substantial, and buyers may not realize the extent of the risk they’re taking until a project stalls. Even with deposit protection through Tarion, there are limits to the coverage, and the process of recovering funds can be lengthy and frustrating.”

Recent changes to Tarion’s deposit protection program aim to mitigate some of these risks. As of January 1, 2026, new freehold homebuyers are encouraged to register their purchase agreement with Tarion within 45 days to qualify for maximum deposit coverage (up to $100,000, depending on the home's price). This allows for earlier detection of potential issues. However, the onus remains on buyers to conduct thorough due diligence before signing any agreement.

Regulatory Scrutiny Intensifies
The HCRA, established in 2021, has been steadily increasing its scrutiny of developers. The authority’s mandate includes licensing, setting professional standards, and investigating complaints. The decision in The Landing Development Group case sends a clear message that the regulator is willing to take decisive action against those who attempt to exploit the system.

“The HCRA is demonstrating a zero-tolerance approach to financial mismanagement,” says one industry insider. “They’re sending a strong signal that developers will be held accountable for their actions, and that homebuyers’ interests will be protected.”

The HCRA's increased enforcement is coupled with a growing emphasis on transparency. The regulator maintains the Ontario Builder Directory, providing public access to information on licensed builders, including any regulatory actions taken against them. This allows prospective homebuyers to conduct informed due diligence before entering into agreements.

Navigating a Challenging Market

The current Ontario housing market presents a complex landscape for both developers and homebuyers. Fluctuating construction costs, rising interest rates, and supply chain disruptions have created significant challenges. While some indicators suggest a potential recovery in the construction market in 2025-2026, affordability remains a major concern.

“Developers are facing immense pressure to manage costs and maintain profitability,” explains an economist specializing in the housing market. “This is leading to a race to the bottom, with some developers taking on excessive risk. It’s a precarious situation, and we’re likely to see more projects stall or fail in the coming months.”

For homebuyers, the key to navigating this challenging market is caution and due diligence. Thoroughly research the developer, review the purchase agreement carefully, and consider the risks before signing any agreement. Be wary of overly optimistic promises or unrealistic timelines.

“Do your homework,” advises the real estate lawyer. “Don’t be afraid to ask questions, seek legal advice, and understand your rights. A little caution can save you a lot of headaches down the road.”

The HCRA’s decision in The Landing Development Group case serves as a stark reminder that the dream of homeownership can quickly turn into a nightmare if caution and due diligence are not exercised. The regulator’s commitment to holding developers accountable is a welcome sign, but ultimately, it is up to homebuyers to protect their own interests in a complex and challenging market.