Abraam Construction Inc. v. Registrar, Home Construction Regulatory Authority, 2025 CanLII 35954

Licence Appeal Tribunal File Number: 16535/NHCLA

In the matter of an appeal from an Administrative Penalty Order made pursuant to section 76 of the New Home Construction Licensing Act, 2017, S.O. 2017. C.33, Sched. 1

Between:

Abraam Construction Inc.

Appellant

-and-

Registrar, Home Construction Regulatory Authority

Respondent

DECISION AND ORDER

ADJUDICATOR:

Rupinder Hans

APPEARANCES:

For the Appellant:

Ken Wise, Counsel

For the Respondent:

Alex Alton, Counsel

Heard by videoconference:

March 12, 2025

OVERVIEW

1On November 19, 2024, the Home Construction Regulatory Authority (the “Registrar”) issued an Administrative Penalty Order (“APO”) to Abraam Construction Inc. (the “appellant”) pursuant to s. 76 under the New Home Construction Licensing Act, 2017, S.O. 2017. C. 33, Sched. 1 (the “Act”). The Registrar alleges the appellant contravened s. 37(2) of the Act by actively holding itself out as a builder of new homes, as advertised on its website, without being licensed as a builder. The total amount of the administrative penalty is $8,152.17.

2There were two witnesses at the hearing, namely, Mr. Joseph Awad, the sole officer and director of the appellant, and Ms. Manveer Cheema, an investigator with the Registrar.

ISSUES

3The issues to be decided in this hearing are:

a. Whether the appellant contravened s. 37(2) of the Act by holding itself out as a builder of new homes without being licenced as a builder?

b. If so, is the APO imposed by the Registrar as a result of the alleged contravention of s. 37(2) reasonable under the circumstances?

RESULT

4I find the appellant did hold itself out as a builder of new homes without being licensed as a builder in contravention of s. 37(2) of the Act.

5I find the APO imposed by the Registrar as a result of the contravention of s. 37(2) by the appellant is reasonable under the circumstances.

6Pursuant to s. 77(4) of the Act, I confirm the APO.

ANALYSIS

A. I find the appellant contravened s. 37(2) of the Act by holding itself out as a builder of new homes without being licensed as a builder.

7For the reasons that follow, I find the appellant has contravened s. 37(2) of the Act. I find the evidence establishes the appellant held itself out as a builder of new homes without being licensed.

8Section 37(2) of the Act provides that “no person shall act or hold oneself out as a builder, offer to construct a new home or construct a new home unless the person is licensed as a builder and meets the other prescribed requirement, if any.”

9The parties agree that the appellant did not construct any new custom homes or offer to do so. Mr. Awad testified the appellant is in the business of project management/construction management, and it partners with architects, builders and subcontractors to put together a team for a project. He testified the appellant is a project management firm and does not build custom homes.

10I note the appellant has a master business licence with its business name listed as ACI Construction Management. There are references to its business name in its social media platforms.

11The Registrar submits that it discovered a website and social media for the appellant which revealed that it was actively advertising itself as a custom home builder. The Registrar presented an administrative penalty assessment form which notes that searches conducted on November 21, 2023, show that, on its website the appellant advertised itself as a custom home builder and states “custom homes” with over 10 years in the business. The website also states that the appellant will both design and construct your dream home and features a gallery page with photographs of six custom homes.

12The Registrar presented a letter, dated December 11, 2023, that was sent to the appellant notifying it of the contravention and advising that it must obtain a license if it is advertising or holding itself out as a builder of new homes on any website, social media or other advertising platform. The Registrar advised the appellant that the appellant must immediately stop advertising itself as a new home builder. The letter also offered an opportunity to apply for a licence as a builder.

13On January 26, 2024, the Registrar received correspondence from Joseph Awad, the sole officer/director of the appellant stating: “Thank you for the clarity. I will connect with our web builders to setup a meeting.” However, the issue was not remedied, and, on July 31, 2024, the Registrar issued a notice of intention to issue an administrative penalty order, dated July 31, 2024 (the “Notice of Intention”) in the amount of $13,847.83.

14I reviewed the presented screenshots of the appellant’s website and social media. In my view, a review of the appellant’s website and social media indicate that the appellant held itself out as providing custom home building. I note that a review of the appellant’s website reveals the following language “custom build homes” on top of a picture of a new home and further states:

“[w]hen building a custom home you have to work with the end-goal and customer in mind. We know our clients and we understand that this is one of the most important projects of your life. For many of you, you’re building your dream home. . . We will work with you to ensure that your dream home becomes a reality, and that when you step foot into your new home, you’re walking into everything you had envisioned.”

15The website also contains the following language: “designing custom homes”, “construction of custom homes”, “design/build”, “custom build”. This language gives the impression that the appellant’s services include designing and constructing custom homes.

16In addition, on the website there are pictures of a home and the heading states: “Custom Home . . . Design & Build – Port Credit.” Mr. Awad testified that the Port Credit home was his own personal home. I note the website does not state that this is his personal home. In my view, the reference to a custom home in Port Credit and pictures can lead to the conclusion that the appellant designed and built a custom home in Port Credit and offers custom home building services.

17The appellant submits that I should consider the appellant’s website in its entirety and not just select sections. I agree and I considered the website as a whole. I find that there are references to other design and builds including a restaurant, a jewelry store, and professional offices, and the appellant appears to provide services in relation to commercial or retail locations, and there are references to the appellant partnering with industry leading builders. However, in my view, the website contains clear references to custom home building, and I find that the appellant was holding itself out as a builder in contravention of the Act.

18I further note that the appellant’s LinkedIn states: “Abraam Construction company we specialize in four main areas, Commercial, Residential, Restoration and emergency.” The heading of the profile pages states “Design – build – renovate – restore.” Further, “[w]e take care of everything from design to construction”, and “we’re not just builders; we’re dream weavers.” While I note that there are also references to construction management, in my view, the appellant is holding itself out as a builder in contravention of the Act.

19I considered the testimony of Mr. Awad who testified the appellant markets itself as partnering with builders and architects, and any reference to custom built homes was meant to mean project management, not a new home builder. He testified that he did not believe the appellant was in contravention of the Act, but he had indicated to the Registrar that the website would be taken down for a few months until the appellant obtains its vendor and builder licence. At that point, he intended that the website would be back online.

20I note that while the appellant may be a construction management company or project manager specializing in project oversight and coordination of various construction projects, its website and social media give the clear impression to the public that it also builds custom homes for residential clients.

21It is possible that the appellant was inadvertently holding itself out as a builder and this was not deliberate on the part of the appellant. Nonetheless, I find that the appellant was holding itself out as a builder in contravention of the Act.

22I find that the appellant contravened s. 37(2) of the Act by holding itself out as a builder of new homes without being licenced as a builder.

B. I find that the APO imposed by the Registrar as a result of the contravention of s. 37(2) is reasonable under the circumstances.

23For the following reasons, I find the APO imposed upon the appellant is reasonable under the circumstances.

24Section 76(1) of the Act gives the Registrar authority to impose the APO. Among other things it provides that “[a]n assessor may, by order, impose an administrative penalty against a person in accordance with this section and the regulations made by the Minister if the assessor is satisfied that the person has contravened or is contravening, (a) a prescribed provision of this Act or regulations, . . .”

25Further, the purposes for which an APO may be imposed are set out in s. 76(4):

(a) To ensure compliance with the Act, regulations and by-laws;

(b) To prevent a person from deriving, directly or indirectly, any economic benefit as a result of contravening the Act, regulations or by-laws or the conditions of a licence.

26Section 76(5) provides that the amount of an administrative penalty shall reflect the purpose of the penalty, shall be determined in accordance with the regulations, and shall not exceed $50,000.

27Subsection 76(9) establishes that an APO is an absolute liability, that it applies even when the person upon whom the APO is imposed took all reasonable steps to prevent the contravention, or had an honest and reasonable belief in mistaken facts that, if true, would have rendered the contravention innocent. The APO applies even if the person had no knowledge of their obligations under the Act or had received information, they believed to be true, that led them to conclude they had no such obligations.

28The amount of any APO is determined by an assessor in accordance with s. 12 and 13 of the Regulation. The APO amount consists of two components: the base penalty, and the monetary benefit.

29The assessor’s determination of the base penalty amount is guided by the factors set out in section 12 of the Regulation, including:

i. The impact of the contravention on the Registrar’s ability to carry out its purpose;

ii. The impact of the contravention on purchasers or owners of new homes or other persons;

iii. In respect of the persons who carried out the contravention, their history, if any, of non-compliance and whether they acted to remedy the contravention, and if so, how quickly; and

iv. Whether the contravention was deliberate.

30The assessor’s determination of the monetary benefit amount is guided by the factors set out in section 13 of the Regulation. Section 13 focuses on the amount that accrued to the person as a result of their contravention, including:

i. The costs that they avoided by failing to comply, or the costs they delayed incurring by delaying compliance; and

ii. The gain the person accrued or losses they avoided by failing to comply with provisions of the Act.

31The APO not only penalizes non-compliance, it further signals to new homes sellers, buyers and owner that failing to abide by the licensing scheme could carry a significant financial penalty.

32I find that the amount of the penalty is reasonable given the circumstances. I note that after reviewing additional information provided by the appellant on August 9, 2024, the Registrar was satisfied the appellant had made significant attempts to remedy the contravention and its impact. Specifically, in an email dated August 9, 2025, the appellant advised that the legal course and customer service course had been successfully completed, the appellant had never accepted any new home building projects, and that the appellant was in the process of finalizing certification steps. Further, that the website was offline, and Mr. Awad had asked his web manager awhile back to take it offline, but the web manager had had an emergency. The appellant’s efforts were taken into consideration when determining a base penalty and monetary benefit amount, and the amount was reduced from $13,847.83 to $8,152.17. The base penalty amount was assessed as $8,152.17, and no monetary benefit amount assessed.

33In making its assessment, the Registrar took into consideration the impact of the contraventions on its ability to carry out its purpose, the impact of the contraventions on purchasers of new homes, history of complying or not complying, remedied the contravention or in the process of remedying the contravention, whether the contravention was deliberate, and the length of time the contravention continued. I find Registrar’s evaluation in this regard to be reasonable.

34The Registrar took into account that the appellant does not have a history of non-compliance with the Act, and this was the first instance of non-compliance. Further that the appellant is in the process of remedying the contravention, and once the Notice of Intention was issued the appellant removed its website and applied to become a licensed builder with the Registrar. Also, the Registrar took into account while the initial contravention may not have been deliberate, the subsequent failure to remove the advertisement from its website and social media after notification of contravention was a deliberate act.

35The Registrar found that the costs avoided by failing to comply with the Act included a $3,000 licensing fee and $250 examination fees. However, as of August 20, 2024, the appellant had applied for a licence with the Registrar. Thus, there are no ultimate gains the appellant accrued by failing to comply, so the Registrar did not assess any monetary benefit amount.

36The appellant submits that there is no evidence it acted dishonestly. The appellant relied on Mr. Awad’s email to the Registrar on August 9, 2024 which indicated that its website is offline, and that Mr. Awad had asked his web manager a while back to assist but he had an emergency. Mr. Awad further confirms that the appellant never accepted any new home building projects, and the appellant was in contact with the Register to finalize steps to become licensed as a builder.

37The appellant submits that it took significant steps between November 23, 2023 and August 2024 to meet compliance requirements by removing marketing materials that could be misconstrued as advertising builder services, completed relevant licensing courses and certification and submitted an application for licensing on or about August 20, 2024.

38I considered the testimony of Mr. Awad, who testified that he asked the web designer to take down the website and that he thought it had been taken, but that he did not follow up to ensure steps were taken. He testified the web designer is usually on top of things but he had an emergency and had left someone else with the task.

39The Registrar does not dispute that the appellant has no history of non-compliance, but submits the appellant made no efforts to remedy the contravention of the Act for several months after it was made aware of it. In my view, the appellant was educated on the Act and given an opportunity to comply, yet continued to hold itself out as a builder of new homes for a period of several months and until it received the Notice of Intention. Only then, were corrective measures taken to bring itself into compliance with the Act.

40I find that, although it does not appear the appellant’s contravention of the Act was deliberate, it did have reasonable time and sufficient information to remedy the contravention. Yet the appellant did not take the appropriate steps to bring itself into compliance for a period of several months, which I conclude is a deliberate act. It appears the appellant only took remedial action after receipt of the Notice of Intention. The imposition of a monetary penalty is what finally motivated the appellant to take bring itself into compliance with the Act.

41In my view, a monetary penalty serves to achieve compliance with the Act, and that is what occurred here. The amount of the penalty was reduced when the appellant presented new and additional information demonstrating belated compliance. I find that the Registrar took the appellant’s compliance into consideration and considered the mitigating factors including the completion of courses and removal of advertising materials.

42After weighing the totality of the evidence, I find that the APO imposed by the Registrar as a result of the contravention of s. 37(2) is reasonable under the circumstances.

CONCLUSION

43I find the appellant contravened s. 37(2) of the Act when it held itself out as a builder of new homes without being licensed as a builder. The APO imposed by the Registrar as a result of the contravention of s. 37(2) of the Act by the appellant is reasonable under the circumstances. I confirm the APO.

ORDER

44Pursuant to s. 77(4) of the Act, I confirm the APO.