Home Renovations - A High-stakes Game

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If you were making a list of the top five riskiest financial ventures open to private people, major home renovations would be right up there. The potential for a train wreck is high unless you make absolutely sure it doesn’t happen. Let me show you what I mean by inviting you into a real-world renovation nightmare that’s unfolding right now.

Back in early September, I got a desperate email from a Toronto homeowner that I’ll call Peter (not his real name). He’d hired a contractor to complete a backyard addition and to add a second story to his house. On September 5, Peter settled on a deal and gave Mr. Contractor a $30,800 deposit. Twelve weeks later, the two men can’t agree on anything, not even what actually happened and what was said.

“I came home to find one of Mr. Contractor’s men sleeping in my basement, and another guy drinking beer from my fridge,” explains Peter. But for his part, Mr. Contractor says these claims are all lies (even though he wasn’t on the site). His workers aren’t allowed to drink on the job. And “there’s nothing wrong with a guy closing his eyes for a few minutes on his break, is there?”

“When I became concerned about the quality of work happening on my home,” explained Peter, “I fired Mr. Contractor and asked for my money back. At first he offered to give me all but $8,000 to cover his costs. We agreed. Later he changed that to a $16,000 hold back. Two weeks later, Mr. Contractor said he would be keeping $25,000. Now he says he’ll be refunding nothing.”

On his side, Mr. Contractor explains that “Peter never told me about an underground river running beneath his house. He wasn’t honest with me and he never did terminate the contract. Peter got a new builder that offered a cheaper price. That’s why he fired me.”

But Peter says he repeatedly warned Mr. Contractor of the high water table in the area and says his new price for the project is 30% more money, not lower.

“We eventually ended up agreeing on a refund of $20,800,” maintains Peter. Mr. Contractor agreed to come to my house at 10 am on Oct. 24 and give me a certified cheque, then I’d give him back the tools I’d been holding as leverage. He never showed up, claiming to be detained, but sent his guy to get the tools at 10:30 am. After I refused to hand over the gear, Mr. Contractor called me back, furious, claiming that 'we had a deal’.”

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