Lack of contract invites heartbreak

Lack of contract invites heartbreak.

Bob Aaron

Bob Aaron

For Ken and Lori Bryden, the climax of a sad and costly tale is set for Jan. 29; that’s the day the local sheriff in Brockville is slated to auction off their dream home-turned-nightmare.
They never even got to move in.

 

building a house

The saga began in 2002 when the family hired a close friend, Bob Pollard, to build a house for them on North Shore Rd. in Westport, Ont. Relying on goodwill rather than a solid contract and detailed plans, the parties agreed to build the 2,000-square-foot house for $200,000.

Excavation was completed and the footings poured in August 2002. But it wasn’t long before disagreements arose about alleged defects with the footings, foundation, dormer framing, porch roofline and other issues. All work stopped in December of that year.

In 2003, Pollard sued the Brydens claiming $81,000 for work and materials supplied to the house, and the Brydens counterclaimed for $249,070, the amount they wanted to correct deficiencies and complete construction.

A seven-day trial took place last January before Justice Kenneth E. Pedlar in Brockville. After reviewing the evidence, the judge awarded the builder $78,000 for work performed, despite the owners’ claim that the work was defective.

In a 6,300-word decision, the judge ruled that a number of construction matters were incomplete and needed remedial work, but Pollard was entitled to be paid for work done to the date building stopped.

According to a statement issued recently by the Brydens, the former chief building official of the Township of Rideau Lakes declared in 2002 that the house met all building code requirements while it was under construction. The Brydens say he was wrong and recently commissioned four engineering reports that indicate significant deficiencies with the structure.

Based on those reports, the house is now subject to an Order to Comply, a Stop Work Order, an Unsafe Order and an Order Not to Occupy, all issued by the new chief building official of the township.

Today, the Brydens face a judgment against them for damages and costs totalling about $120,000, plus $300,000 or so to finish the house – on top of their lawyer’s bills. For five years they’ve paid taxes and a mortgage on an empty house, hoping for help from local and provincial politicians.

No assistance is available from the Tarion Warranty Corp. Tarion spokesman Robert Mitchell says there are two kinds of new home warranty coverage relevant to cases like this, where a property owner hires a contractor to build a house.

Financial loss protection is available when homeowners advance money to a builder who reneges on the contract, leaving them with less than they paid for. This wasn’t available to the Brydens, Mitchell says, because the court and the Licence Appeal Tribunal ruled “the value of the work done by the builder exceeded what (the Brydens) had paid” and, as a result, “the Brydens did not suffer any financial loss.”

Tarion’s construction coverage is not available to the Brydens until the house is finished. Under the governing legislation, an incomplete contract home is ineligible for the warranty until the construction contract is “substantially performed,” and the house is occupied.

In the fall of 2005, Pollard was convicted in provincial court and fined $750 for failing to enrol the home under the Tarion warranty program.

For now, the house is incomplete and exposed to the elements. The outstanding municipal orders will not permit occupancy until the problems identified by the engineers have been rectified.

To collect the money owed to him, Pollard has obtained a writ of seizure and sale. Acting on the writ, the sheriff will auction off the Bryden’s equity in the property.

The lesson to be learned from this tale is to never retain a contractor to build or even renovate a home without having a full set of construction plans prepared by an architect or engineer, and a detailed contract. Standard industry template contracts are available from the Canadian Construction Documents Committee (www.ccdc.org).

I also recommend hiring an architect or other professional to monitor ongoing construction.


Bob Aaron is a Toronto real estate lawyer whose column appears Saturdays. He can be reached at bob@aaron.ca. Visit his website at aaron.ca.

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