Builder beware, construction association warns

With Sudbury’s red-hot housing market in desperate need of new construction, anyone building their own home should be aware of the protection they’re entitled to when dealing with contractors.

That was the message of Howard Bogach, president and CEO of Tarion Warranty Company, the body in charge of regulating new home building in Ontario.

“My concern is that people should know if they’re buying a home, it should be registered, and they should get the benefit of the protection that goes with it,” Bogach said, speaking at a press conference Sept. 11 at the office of the Sudbury Home Builders’ Association.

“If you want to get a home built, you should get it done by a professional, not an amateur. Would you hire an amateur to work on your teeth?”

Illegal builds, as they’re known, expose homeowners to major risks, Bogach said, and don’t cut costs by a significant amount. Builders pay about $500 to register with Tarion, while a seven-year warranty on the home costs $500-$1,000, depending on the value of the home.

Tarion also requires builders to put up $10,000 as a deposit, which is refundable once the home is complete.

“And if you’re getting someone to build a home for you, don’t you want to know that they have at least $10,000?”

It’s a major problem in Sudbury, Bogach said, where anywhere from 35 to 50 per cent of building permits are taken out in the homeowner’s name. That means they’re the builder, not the contractor, and they will be liable for accidents or any other problems associated with the project.

“In the last few years, we’ve had to deal with some pretty serious situations (in Ontario),” he said. “There was one where the entire home had to be lifted off its foundation, redo the fill, repour the basement, put the home back down, then redo the drywall.
“We’re talking about hundreds of thousands of dollars in repairs. So we do believe that consumers should know they require some form of protection along the way.”

Education is the most important thing in places like Sudbury, where a boom in residential housing construction is expected as the local economy thrives.

“The more we get people to understand that if they’re buying a new home, it’s supposed to have a warranty attached to it that’s good for seven years, the better we’re going to be,” he said. “If people know the right questions to ask, they could save themselves a lot of trouble.”

Doug Tarry, president of the Ontario Home Builders’ Association, said it’s a big red flag if your contractor wants you to take the building permit out in your own name, or if they want to work for cash. And get everything in writing.

“If there’s no contract, you’re likely involved in an illegal build,” Tarry said. “Get it in writing. That’s one of the most important things we talk with consumers about. Understand what you’re agreeing to and get it in writing. Otherwise, it’s Russian roulette.”

The association is also calling on the federal government to bring in a permanent tax credit program that rewards people who renovate their homes. The program was so successful when it was introduced a few years ago, it quickly ran out of money.

Tarry said it’s one of the most effective ways of combating the underground economy.

“And the underground economy is robbing the government of money, it’s harmful to our industry, for those who are trying to operate properly, and you’re walking away from consumer protection again.”

In that light, he said the program is revenue neutral for the government, since it discourages under-the-table deals in which no taxes are paid.

“They would be helping combat the underground economy by having this in place. And it’s a very good way to get control over how people are renovating their homes, to ensure the government isn’t getting major tax bleed out.”

On a related topic, Tarry said he has a major problem with the College of Trades, a new provincial body for Ontario’s apprenticeship and skilled trades system that’s slated to begin operating next year.

Tarry said that in addition to adding new fees he says are unnecessary and will increase the cost of building a home, the college has some unrealistic plans for training. For example, when a new bricklayer is being trained, the college is setting a standard of having four experienced bricklayers working with one apprentice.

“They want a 4:1 ratio, in an industry where the average age of a journeyman bricklayer is 74,” he said. “That may work on some massive jobsites in Toronto, but when you’re talking rural Ontario, Northern Ontario, small-town Ontario, that number simply doesn’t work. It doesn’t fly.

“This is a raw deal for rural Ontario, Northern Ontario and small-town Ontario.”