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ADI Developments
September 14, 2022

ADI Developments launches appeal of Home Construction Regulatory Authority proposal to revoke building licenses

In response to the HCRA proposed regulatory action, Adi Developments filed an appeal on Thursday, September 8th, 2022. The HCRA proposal arose from steps taken by Adi to ensure the ongoing success and completion of their 26-storey condominium Lakeshore project located in Burlington, ON. It seeks to revoke the licenses of eight unrelated Adi entities in addition to that of the one entity involved in the matters relevant to the HCRA action.

With increased project costs associated with the pandemic and inflationary pressures totalling $43 million (a 35% increase from the project’s original budget), Adi was forced to seek additional financing and to cancel purchase agreements in order to secure the new financing.

“The rising costs driven by trade subcontractors, supply chain slowdowns and associated increases in raw materials forced Adi into making a difficult decision for the project to survive,” said Adi, “but the alternatives, including project failure, would have led to a more precarious situation for purchasers. We put their interests at the forefront as we dealt with a difficult industry-wide situation not of our making”. The HCRA proposal makes allegations against Adi that are not borne out by the facts. Adi’s side of the story in response to the HCRA proposal is set out in its Notice of Appeal.

In a demonstration of good faith, and in order to mitigate the impact on purchasers, Adi gave former purchasers, who were not interested in the new purchase agreement, 6% interest on their deposits, which Adi did not have to do. For the majority of purchase agreement holders who did wish to move forward, Adi provided them with the opportunity to repurchase the units at approximately 20% below market prices and in addition $10,000 in décor dollars should they choose to remain. Adi has always operated with honesty and integrity in the conduct of their business and within the broader community; it is the foundation of their success. They have continually carried on all business in compliance with NHCLA, and the ONHWPA and continue to meet all competency requirements. Any suggestion to the contrary is groundless.

Adi consulted with the HCRA with respect to the situation and lawfully cancelled purchase agreements according to their contractual terms and the regulations set out by Tarion giving those purchasers alternative options. At no point did Adi tie the return of deposits to the resale of the units, as HCRA alleged. It shocked Adi that this proposal was the path taken by HCRA in respect of the Lakeshore development without prior notice or discussion and that it included eight other unrelated projects within the Adi group of companies in the regulatory net.

“We are extremely upset by the process. The proposal published by the HRCA is disappointing, to say the least,” said Tariq Adi, President and CEO of Adi Development Group. “We have cooperated fully with the HCRA up to this point and remain willing and hopeful that despite the appeal we can reach an expedited resolution on all issues with the HCRA so that we can complete the Lakeshore and other projects. Many builders out there require guidance from HCRA in order to get through this, not to have their licences pulled.  We feel we have been unfairly singled out.”

Adi has been working with Lakeshore purchasers on deposit returns, including interest (as of September 7th, 85%, totalling more than $9M, have been fully refunded, with the balance of deposits to be returned 100% by the end of September) and, until the HCRA issued its proposal , it has been focused on completing the project. The suggestion that Adi acted unethically or that it provided incomplete or false information to the HCRA as part of this process is ludicrous as well as defamatory.

The Adi Development Group Inc. has been operating in the GTHA market for over 15 years and has built over 1200 new housing units.  Adi has forecasted to build over 8,000 homes in the GTHA over the next six years. Adi has plans to launch two new projects in the Fall.

“Given the current housing shortage in the GTHA, these actions seem arbitrary and came about entirely without any dialogue,” said Adi. “The Provincial Government has been working diligently at supporting efforts to create new housing and meet the 1.5 million home targets in the next ten years. With the number of developments we have underway, we are ready to help make these targets a reality.”


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