What New Home Buyers Often Miss

Anisa Rita
Nov 13, 2025
3 min read

Anyone who has practised real estate law long enough will tell you that buying a new home is both an exciting milestone and a minefield of details that most people never see coming. Everything looks simple from the outside. A shiny new build. A smiling sales representative. A promise that everything is covered by warranty. Yet the moment you look behind the curtain, the legal framework is full of complexities that can protect a buyer or expose them in ways that only become obvious years later. This year, the Home Construction Regulatory Authority’s (the "HCRA") General Counsel, James Ryu, offered an excellent reminder of what is truly at stake when buying a new home in Ontario.

The HCRA has had a remarkable impact since its creation in 2021. It is the independent authority that licenses every builder and seller of new homes in the province. It enforces the New Home Construction Licensing Act, 2017, oversees complaints, investigates misconduct, and holds licensees to a formal Code of Ethics. For buyers, this means that the person building or selling you a home must meet standards of honesty, competence, fairness, and professional conduct.

One of the most useful tools the HCRA offers is also one of the most overlooked. The Ontario Builder Directory is a public record that tells you who your builder is, whether they are licensed, and what their regulatory history looks like.

It is surprising how many people will sign a preconstruction agreement without ever checking whether the builder is actually permitted to sell them the home. The directory should be the first stop for every buyer and every agent.

Another issue that quietly fuels many of the disputes we see in real estate practice is the misuse of the owner-builder exemption. The law allows people to build a home for their own personal use without requiring a builder licence or warranty enrollment. The intention is reasonable. If you want to build your own house to live in it yourself, the law does not force you to become a licensed builder. The problem is that unlicensed builders have discovered how to hide behind this exemption. They present themselves as project managers or consultants while directing the entire construction. The homeowner pulls the permits, the true builder stays in the shadows, and the finished home falls outside the warranty program, leaving the buyer without protection.

The consequences of this only surface when something goes wrong—the roof leaks, the foundation cracks, the electrical work fails inspection during a resale. At that moment, buyers discover that their new home is not covered by the protections they thought they were entitled to because the person who actually built the home was never licensed.

Another growing issue is the illegal sale of new homes through what people casually call flipping. Selling a new home requires a vendor licence. Many individuals, often unintentionally, find themselves selling a newly built home without understanding that they are functioning as vendors under the statute. When they do so without a licence, the sale is illegal. For buyers, this usually means they are not getting the warranty protections they believed were built into their purchase. The HCRA has been responding through administrative penalties and enforcement actions, but by the time the regulator becomes involved, the buyer is usually already living with the consequences.

All of this unfolds within the larger structure of the HCRA Code of Ethics, which imposes enforceable standards of honesty, integrity, competence, and fair dealing. It prohibits intimidation and misrepresentation and gives buyers meaningful recourse when conduct falls short. In a market where optimism can overshadow caution, this framework ensures that buyers are not left to address problems on their own.

The reality of the new home market is that buyers rarely know the full picture when they sign an agreement. They are presented with floor plans, incentives, samples, glossy marketing, and an impression that everything is turnkey. Yet the legal side of the transaction is far more complex. Before signing anything, a buyer should know who the builder is, whether the builder and vendor are licensed, whether the home is properly enrolled in the warranty program, whether the person selling the home is even permitted to sell it, and whether any risks are being hidden in the agreement.

A new home is a foundation for a family, a financial commitment, and one of the most meaningful investments a person will make. The law gives you tools. Use them at the beginning rather than the end. We will ask the questions that marketing will not answer. The new home market rewards informed buyers. The best protection is knowledge and the right guidance before a signature ever hits the page.

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