“I want to share a little secret with you. There is no authority in this Province that “licenses” builders or renovators. There is no one hired to check for credentials, experience or training of those who work in the residential construction industry as a builder or renovator or to protect you as a consumer.”
There is no agency that will help you if things go wrong with your contractor. It is a full-on “Buyer Beware” scenario when you engage a Builder or Renovator for your project. In fact in this Province like many others, anyone at all can become a builder or a renovator and set up a business with no training, experience or licensing, all they need are the tools, and a consumer willing to hire them. Does this trouble you?….. that’s good because it troubles us too.
That is where the Canadian Home Builders’ Association comes in. We are a not for profit, a self-funded and self-regulated association whose members voluntarily join the Association and meet a set of criteria. Our Members are obligated to provide new home warranty on all new homes, have liability insurance coverage, adhere to workplace health and safety standards and regulations, adhere to the requirements of the Canada Revenue Agency for collecting and reporting on employee deductions and HST and provide a written contract on all work they undertake. Our Members do business the right way! OUR MEMBERS ARE NEW BRUNSWICK’S PROFESSIONAL BUILDERS AND RENOVATORS!
Almost every week I receive calls from homeowners and homebuyers just like you who hired someone to do a minor to large renovation or new home construction and they have issues with their builder – most usually very expensive issues. In reality, their only recourse is the legal system. If the homeowner was naive enough to
participate in a cash deal (aka – opt out of paying the HST) that recourse may not be available either. I am actively involved in the residential construction industry so I am always looking for new construction companies and I see new half-tons advertising new companies weekly. I am not saying that all builders are disreputable, in fact, I am saying that many are Professional Builders who perform quality work and do business the right way with your interests in mind and are dedicated to constructing or renovating your home to meet and often exceed building codes and standards. But many are not. How do you tell the good from the bad?
Before you hire anyone to complete a renovation or construction project for you there are things you MUST DO to avoid the disappointment, stress and costs associated with a home renovation or new construction gone bad. It comes back to you the consumer to DO YOUR HOMEWORK. You are investing tens of thousands and in many cases, hundreds of thousands of dollars and you need to ensure that you are investing this money with legitimate companies who will deliver to you a project that is completed to provide you and your family with a safe place to live and does not put you in harm’s way in the process. Would you purchase a car for $25,000 that you know nothing about and worse yet, pay cash and get no proof of purchase? Think about that the next time you hire someone to complete your construction project.
How to Choose the Right Builder or Renovator
Your Builder or Renovator should be able to provide you with proof of the following:
a) New Home Warranty- If it is a new home construction ensure that your Builder subscribes to one of the two warranty companies that operate in New Brunswick – Atlantic Home Warranty – 1-800-320-9880 and Lux Residential Warranty – 1-877-854-4432. Ensure that your house has a warranty to provide you with coverage in the event of a structural issue after construction. In- sist that your Builder provide you with Warranty Coverage and ensure that it is part of your contract and ask to see the enrolment forms. Make sure you understand what your warranty covers and what it does not. Most warranties only deal with specific structural issues;
b) Renovation Warranty – Both LuxResidential Warranty and Atlantic Home Warranty offer coverage for renovations. This is a good consideration in large renovation projects and again, covers you in case things don’t go as planned;
c) Liability Insurance Coverage – Most builders’ carry approximately $2,000,000.00 in liability insurance coverage. Why is this important to you? Accidents happen sometimes to your property and even to the neighbors, make sure that these accidents don’t become your responsibility. Ask your Builder for proof of liability insurance coverage;
d) Adhere to Workplace Health & Safety Legislation- Does your builder subscribe to Worksafe NB.? If they do, ask them for proof. If one of their workers gets hurt on your property you could be liable. Make sure you are protected. Also ensure that your builder is aware that you expect that all required safety equipment and rules are to be followed while they work on your job site. Get it in your contract;
e) Avoiding Paying Cash – Paying workers cash for work done on your home is unethical and against the law if it is being done to avoid paying the HST on labor costs associated with your renovation or new construction. Ask for your contractor’s registration number with the Canada Revenue Agency. Remember if the job goes south and you have no receipts you have no recourse. Keep receipts for all payments made to your contractor;
f) References- During your discussions with your builder ask for 2-3 references from people for whom they have performed similar construction or renovation projects. Just don’t get them – check them! Most references will be only too happy to discuss their projects with you;
g) Is your Builder Familiar and Up To Date with the National Building Code of Canada – Every five years or so, the Government of Canada releases an updated copy of the National Building Code. This document provides the minimum standards to which a new construction or renovation must adhere to. With each release, there are a number of training providers who offer training on the new Building Code. When was the last time your builder has taken this training or an update? Ask for proof;
h) Is your Builder or Renovator a Member of the Canadian Home Builders’ Association – Our members are obligated to provide new home warranty on all new homes, have liability insurance coverage, adhere to workplace health and safety regulations and adhere to the requirements of the Canada Revenue Agency for collecting, and reporting on employee deductions and HST.
Get a Contract – Get It in Writing! Get It in Writing! Get It in Writing!
Get a Written Contract – No job is too large or too small for a contract. Take the time to ensure that the details of the job that you want completed are clearly outlined in a contract that is signed by both you and your contractor. In addition to a detailed outline of the work to be completed ensure these other details are also included:
a) How are Change Orders to be handled? Let’s face it, we all change our minds and it may be that once the construction or renovation is underway you decide you want to add or change something. These changes should be in written form and attached to the contract. Remember changes and additions cost money so be prepared to pay the extra labor and material costs associated with these changes and additions;
b) Building Permits – New Construction requires a host of permits from various provincial and municipal authorities depending upon where the home is to be constructed. Likewise a renovation also requires building permits. Make sure your contract specifies whose responsibility it is
to obtain these permits – the builder’s or yours. These permits also protect you the homeowner as the Authority who issues the permit will often send a building inspector to the site to ensure that the work is being done to meet the National Building Code of Canada. Ultimately the law says it is your responsibility as a consumer to ensure that building permits are in place;
c) Cost – Ensure that there is a detailed list of the costs to complete your project. Be aware that the lowest bid is not always the best choice as it might not be inclusive of everything. Take the time to compare apples with apples and when in doubt ask the questions;
d) Payments- Make sure your contract specifies items such as a schedule of payments, depos- its and holdbacks. Most projects are paid in installments based on the amount of the work completed. NEVER PAY CASH for a deposit or an installment and it is rare to be asked to pay the whole amount up front;
e) Time Lines – Ensure your contract provides an estimated completion date. Remember that weather, material availability, change orders and just plain old Murphy’s Law all take an effect on getting a job done exactly on time. If other factors are riding on that special completion date allow for a two to four weeks on either side of the completion date to avoid frustration should things not go exactly as planned;
f) Visitations to the Site – Make sure your contract specifies when you can visit the site to check on progress. Remember that workers are required to use safety equipment and you may as well when you visit. Even though it is your new home, renovation or addition, you should check with the contractor to schedule a time when it is convenient and safe for you to visit and inspect the progress. Just don’t assume it is okay to show up on the site;
g) Energy Efficiency – Discuss how your home will perform once it is renovated or constructed. Will it be comfortable and how much energy will it consume once completed. Ask your contractor to have an energy evaluation completed by a third party to ensure that your new home or renovated home meets with your expectations for comfort and energy costs. Provincial incentives are also available for qualifying energy-efficient homes. Visit www.nbpower.com for details.
There is no way to avoid all disputes when it comes to a home renovation or new construction but these tips will certainly go a long way in helping you to avoid the major pitfalls.
Remember it is up to you to be informed and DO YOUR HOMEWORK. If asking these questions is hard for you, ask someone to help you who may have an easier time negotiating your contract and asking the tough questions.
The Canadian Home Builders’ Association New Brunswick has builders and renovators who are ready to help you with your next project and a full list can be found at the back of this magazine.
Remember, our Members voluntarily join the Association and meet a set of criteria. Our Members are obligated to provide new home warranty on all new homes, have liability insurance coverage, adhere to workplace health and safety regulations and adhere to the requirements of the Canada Revenue Agency for collecting, and reporting on employee deductions and HST and provide a written contract on all work to be performed.
Our Members do business the right way! Call or email for a list of builders in your area!
506-459-7219 ext. 200