A Cautionary (and true) Tale

When Jim and Sue Smith (all names have been changed) purchased their home in Eastern Canada, a major renovation was an important part of their plan. When the Smiths hired Mr. B as their renovator, they thought they had done everything right. Over the next eight months, they learned that even a seemingly well-planned project can go wrong, especially if important details are not completely clear and written down in a contract.

The house the Smiths bought had previously been a duplex and required major changes to convert it to a single-family home. Structurally it was in good shape, but it needed updating from top to bottom, including tearing out some walls and a lot of plumbing and electrical work.

Jim and Sue started their search for a renovator while in the process of buying their home. They interviewed three contractors, got customer references from each one and checked them. They also contacted the Better Business Bureau and the local Home Builders Association. Mr. B had a look at their new home before they finalized the purchase agreement and provided a ballpark estimate for the renovation work that was needed. The Smiths chose Mr. B because "we felt very comfortable with him and thought we'd work well together." Mr. B's customer references were also positive about their experience with this contractor.

Once the Smiths had completed the purchase, Mr. B gave them a written estimate for the planned renovation work. The estimate was not highly detailed, it simply listed various areas of work such as plumbing, electrical and specific alterations, and an estimated price for each area. "We assumed that this was the contract, this was the price we were going to pay", explained Jim. However, neither the contractor nor the Smiths actually signed this document.

Mr. B also gave them a "sample contract" which spelled out some of the responsibilities of the homeowners and the contractor, as well as other information that made reference to "the detailed contract", reinforcing their impression that the estimate was the contract.

Once the renovation work got underway, Mr. B submitted invoices every two weeks, each with an itemized statement of time worked, subcontractor charges and the materials used. Invoices were not tied to specific construction milestones, so it was difficult for the Smiths to know if their budget was on track.

Initially, when the work appeared to be going well, this was not a concern. However, as the job progressed, they became increasingly uneasy with this arrangement.

"About two months into the job, we began to get a bad feeling", noted Sue. "I wasn't sure why, but we began not to trust him. Some of the workers seemed to take forever to do things and some days there was only one worker on the job. When we brought up problems with Mr. B, his reaction was always that things were going very well. Later on, he started to knock money off his bills anytime we expressed concern".

Over time, the Smiths found that they had a growing list of problems with how Mr. B operated his business. When they wondered about full drawings for the construction work, they ended up with design drawings, but not a complete set of working drawings.

When a major load-bearing wall was removed, they were told that they didn't need a building permit and that a "friend" who worked for the City would come by to see that the work had been done correctly.

At this point, the work had been going on for four months and the project was supposed to have been completed. The Smiths had moved into their home. However, a great deal of work remained undone, including painting, doors, trim, new stairways and a third-floor dormer. Their roof was also partially covered by a tarp. The Smiths figured that two-thirds of the work was done, but they had spent their entire budget.

Alarmed with their contractor's inability to provide satisfactory answers to their questions and concerns, they held a series of meetings with him. He became increasing hostile and eventually stormed out of the house. Work on their project came to a halt.

The Smiths contacted a number of other contractors in an effort to find someone who would complete their project. None were willing to consider the job until there was an engineer's report on the house and all the required building permits were in place. This was a frustrating and stressful time. "We didn't even know if the house was going to come crashing down around us", noted Jim.

The engineer's inspection determined that while there were many deficiencies in the work that had been done, the home was structurally sound. The engineer also arranged with the City for the Smiths to obtain the various permits and inspections required to make their project "legal".

With the engineer's report in hand, the Smith's hired a well-established renovation contractor to correct the mistakes and finish the work. Their experience with the second contractor was extremely positive. "We had a signed contract, so we knew what we were looking at", said Sue. "We appreciated the contractor's knowledge and expertise and we could really work with him. Anytime we had an idea, we were able to sit down with him and talk about it. And any changes we made to the original plan were written down as a change order and signed by both parties."

The Smiths also decided to pursue Mr. B to recover the costs involved in correcting his construction mistakes. However, as they were about to go to court, Mr. B declared bankruptcy, making it highly unlikely they would ever collect a settlement. They subsequently dropped their case.

So what went wrong and what did the Smiths learn from their experience? They believe that Mr. B "got in over his head", taking on too many jobs in an overheated renovation market. They also speculate that the project was too large and complex for him. Jim added that, "we know now that the project wasn't planned properly from the beginning-the work wasn't spelled out in detail, there should have been blueprints and specifications so the work could be properly costed out and a realistic schedule developed. We had lots of paper, but nothing definitive and we never actually signed anything with Mr. B."

In the end, the Smiths are very happy with their home - they got what they wanted. And having their project completed by a professional renovation contractor provided them with valuable insight into how a well-planned renovation project works. Their advice to other homeowners is simple - it's OK to trust a contractor, but verify what you discuss and get ALL the details in writing.