By Staff
October 14th, 2022
BURLINGTON, ON
A call came in earlier today from a regular reader who lives close to the Martha Street – Lakeshore Road intersection – the site of the ADI Group Nautique development that has people in the area very upset with the noise and disruption.
Architects rendering of the Nautique, currently under construction at the intersection of Martha Street and Lakeshore Road.
The ADI Group was advised by the Home Construction Regulatory Authority (HCRA), that a Notice was being issued that they were subject to a possible license revoction
The caller mentioned that there has been no work done since the Thanksgiving holiday – at that time there were some 30 construction workers hurriedly putting things away.
Since then nothing – which pleases the neighbours.
The following was published on Storeys, a news web site that publishes content about the construction/development industries.
The Home Construction Regulatory Authority (HCRA), confirmed today that ASI is appealing the regulatory action.
In a release dated September 12, Adi, which has operated as a builder in the Greater Toronto Area for 15 years, states an appeal was filed on Thursday, September 8, emphasizing their “disappointment” in what they say has been an abrupt and uncommunicative course of action from the provincial regulator.
“The process undertaken by the HCRA in issuing the Notice has been incredibly disappointing, cursory and arbitrary. Typically, a Regulator is required to exercise their statutory powers with fairness and openness to those under investigation,” said Adi President Tariq Adi, in an emailed statement to STOREYS.
“In our case, we were given no notice of the impending proposal, no understanding of the grounds or documentation for their allegations, and no opportunity to respond or clarify issues before HCRA made the decision to issue a Notice that contained very serious allegations and would have very serious consequences for Adi. Adi Developments’ reputational damage due to this lack of due process and hasty move by the HCRA has been severe.”
The ADI Group brothers Tariq and Saud
In an emailed response to STOREYS, the HCRA stated, “The Home Construction Regulatory Authority is committed to protecting consumers and providing resources to help Ontarians.
The HCRA had made it clear that bad actors in the industry will face severe consequences as a result of the measures introduced by the Ontario government.”
On August 25, the HCRA issued a Notice of Proposal to revoke the building licenses of the nine builder/developer entities operating under the Adi Development Umbrella Group, making an exception for three in-progress developments, including the Nautique, a 26-storey condo located on Burlington’s lakeshore.
The ADI site at Lakeshore and Martha in May of 2021.
Under grounds for the proposal, the HCRA alleges that, after selling units in the Nautique between 2015 – 2020, Adi then sought to cancel existing purchase agreements, citing financing issues. The builder then allegedly failed to return consumer deposits, falsified documentation provided to the HCRA, and demonstrated they were relisting the units for a higher purchase price while refusing to issue deposit refunds until a unit was resold.
As a result, “Adi Development Group has demonstrated, through the conduct of its related entities and interested persons, that its corporations should not be licenced builders or vendors under the NHCLA,” states the regulator’s filing.
Revocation or refusal to renew a licence are the most severe consequences for a builder/vendor. Revoking a licence prevents a developer from legally operating in the new home construction sector. Should a builder continue to illegally operate without a licence, the regulator can take additional enforcement steps such as
Compliance Orders;
Restraining Orders;
Freeze Orders; and
Provincial Offences Act charges
In a statement regarding their appeal, Adi refutes the allegations. “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,” states the release.
They go on to say the HCRA’s proposal was actually spurred by steps taken by the builder to “ensure the ongoing success and completion of their 26-storey condominium Lakeshore project,” citing increased project costs due to the pandemic and “inflationary pressures”. According to Adi, the cost to build has ballooned to $43M, a 35% increase from the original budget.
“Adi was forced to seek additional financing and to cancel purchase agreements in order to secure the new financing,” states the release.
Construction crane being put in place
Adi says it consulted with the HCRA in regards to the situation, and that cancelled purchase agreements were done so lawfully and within the contractual terms and regulations set out by Tarion, as they gave purchasers “alternative options.” The builder refutes the allegations made by the HCRA that original purchasers who agreed to forfeit their purchase would only receive a deposit refund once the unit had been resold and a new deposit obtained.
“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,” reads their release.
As well, writes the builder, “In a demonstration of good faith and in order to mitigate the impact on purchasers,” it offered former purchasers who were not interested in a new purchase agreement an additional 6% interest on their deposits. Adi also says that for the “majority of purchase agreement holders who did wish to move forward,” they were offered to repurchase their units at 20% below market prices, and were also given $10,000 in “décor dollars” as an incentive.
The builder says they have been working with Lakeshore purchasers on their deposit returns, including interest, claiming that as of September 7, 85% have been returned, totalling more than $9M.
“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,” states Tariq. “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’s case will now go to the Licence Appeal Tribunal (LAT) for a case conference to reach a resolution, with a hearing to be held if one isn’t reached. If the LAT decision upholds the HCRA’s decision and the licensee does not appeal the decision in Division Court, then the licence is revoked.
Don.
Much of the blame should go to the Mayor, because it should not take 9 years to approve this development. The future purchasers were also to blame because instead of telling this Mayor to move this development along because the units had gone up with considerable gain for the purchasers. They sat on their hands and watched what they thought was the greatest investment they ever made. With only a small deposit and wanted to ride this wave as long as they could without having to close on the deal and put up the big money. Do we know if there was a clause in the offer that legally allowed the builders to back out of the offer and agreement. If there was, I see no problem in an agreement and deal signed by 2 parties if the purchasers were aware of this deal killing clause in the offer. Since no one of the purchasers have provided Pepper with a copy of the signed agreements. No one really knows what was in the contract. If licensed realtors were involved it would be interesting to know what the purchasers knew when they signed the deal. If the purchasers expect sympathy from us. Bring forth copies of the offer. Or stop crying wolf.
Don did you see a copies of the offers? If not you really have no clue what happened.
Cool sunglasses.
The true victims are those who purchased (and maybe repurchased) units in this development and had their capital tied up all this time with a still unknown future outcome. I feel bad for them! Adi brothers, not so much.
It is about time that someone stood up to the builders. Too bad the city doesn’t.
Does anyone at City Hall know what is happening?
If indeed, this construction site is closed for the duration, then perhaps as someone suggested to me the walkway that takes up a lane of traffic on Lakeshore Road should be removed. The traffic congestion in that area can be horrendous at times.
I would ask my current ward 2 councillor, however, she has BLOCKED me from her Facebook and Twitter Accounts so why would I think that she would answer an email from me. Guess I should not have challenged her “breach” or” coyote whistles”.