Ontario Developer Ordered To Repay Buyers After Selling Homes Without License

  • The case shows Ontario’s regulator recovering purchaser losses through prosecution, but only years after the developer’s licence renewal was refused and money continued changing hands.

An Ontario developer and its director have been ordered to return $215,000 collected from homebuyers after continuing to conduct new-home transactions despite having their licence renewal refused more than five years ago.

The Home Construction Regulatory Authority said Exquisite Bay Development Inc. and director Ahmed Raza Yousufpleaded guilty on June 19 to four charges of selling new homes without an HCRA licence. A court ordered $215,000 in restitution to purchasers, along with a combined $18,750 in fines and victim surcharges.

The restitution corresponds to two payments identified by the regulator. One group of purchasers entered into an agreement for a pre-construction home and paid Exquisite Bay a $200,000 deposit. In a separate transaction, purchasers attempting to assign their purchase agreement to another buyer were charged a $15,000 assignment fee, according to the HCRA.

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Neither home was ultimately built. The regulator said Exquisite Bay later sold the development lands and did not return the two payments.

The transactions occurred after Exquisite Bay’s licence renewal had been refused in March 2021.

Under Ontario’s New Home Construction Licensing Act, a person or company cannot offer to sell, transfer, or sell a new home without being licensed as a vendor. The legislation also allows a court to order compensation or restitution following a conviction.

The prosecution comes against a broader history of litigation involving Exquisite Bay and pre-construction purchasers, although the regulator has not said whether those cases involve the buyers covered by the latest restitution order.

In a November 2024 decision, the Ontario Court of Appeal said a group of appellants had entered agreements with Exquisite Bay to purchase pre-construction homes. The court’s summary of the underlying facts said Exquisite Bay did not complete construction and later sold the development to Vandyk – The Ravine Limited.

Exquisite Bay subsequently terminated the purchasers’ agreements while retaining their deposits. Those purchasers sued multiple parties connected with the failed development. The 2024 appeal itself concerned claims against three Vandyk directors rather than the liability of Exquisite Bay or Yousuf, and the Court of Appeal dismissed the appeal.

The HCRA said its separate regulatory investigation began after receiving purchaser complaints concerning a Mississauga residential development. The regulator found Exquisite Bay had entered into or assigned two agreements while it was unlicensed, eventually resulting in the four guilty pleas and restitution orders.

Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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