HCRA Advisory – Price Escalations And Contract Terminations

Earlier this year, the Home Construction Regulatory Authority (HCRA) updated one of its advisories with respect to Price Escalations and Contract Terminations. Much of the advisory is not new, but it highlights HCRA's focus on being the "watchdog" for consumers. This note will briefly discuss two items in the Advisory, being (1) Price Escalations, and (2) Adjustments; however, readers are encouraged to read the entire Advisory for further information and guidance from HCRA. The advisory can be found here.

The Advisory emphasizes that licensees must honour their agreements and must not try to coerce purchasers for more money than agreed upon – particularly by threatening to cancel the sale agreement if the purchaser does not pay more. The Advisory sets out that HCRA may have some leniency for a licensee to request a price increase with existing purchasers, but the licensee must (a) provide significant information about how the price increase was determined, (b)