By Ted McIntyre

Walking into a botched reno is not for the feint of heart

No renovation is routine, but none are more challenging and stress-inducing than reno rescues—when a client has either hired an incompetent contractor and is now worse off than when they started, or attempted to undertake the project themselves, with disastrous consequences.

Although most people accept that the price is the price when it comes to something like dentistry or a new suit, and that even a luxury vehicle has only marginal room for haggling, they will all too often opt for a cheaper quote for a major renovation, even if it comes without a warranty and could theoretically put them at financial and physical risk in the future.

The trust factor has to be paramount, explains Tony Gatti of The Gatti Group Corp., a general contracting firm in Mississauga. “It sounds weird, but I tell people not to look at the dollar value when interviewing contractors. You’ve got to be able to work with the guy and trust them. Then you can work on the dollar value. At the end of the day, I tell people it’s not just you interviewing me as me interviewing you. I may not want to work for you, because we could be in each other’s face for six months to a year and we have to be able to resolve issues—and there will always be issues.”

Clients also make the mistake of assuming the one-man-show is automatically cheaper, says Peder Madsen, owner of CCR Building and Remodeling in London and president of the London HBA. But time is also money. “We have 16 employees—14 out in the field. But just because we have more overhead doesn’t mean we’re going to be more expensive, because we’re getting a lot more work done than that single guy,” explains Madsen. “Someone who has less overhead than us gets less work done. If everything is being done properly, we should be priced competitively. I try to articulate that to potential clients.”

“People ask us if we’ll do partial cash,” Gatti says. “Well, no we don’t. First, it blurs the lines. Even if I’d ever consider it, I can’t do half the job in cash and half on the books, because how do I warranty the work? And it would be hard to get a contractor to do follow-up repair work if they couldn’t get their plumber or electrician out because they were paid cash.

“I’m sick of seeing the TV shows where the bad contractors are being bashed,” Gatti adds. “We need a show that demonstrates how people get themselves into trouble by cutting corners and thinking they can do things themselves.”

What follows are four stories of homeowners who didn’t follow that advice and paid a big price for trying to cut corners—and the professional renovators who helped stop the tears and save the day.

An $800,000 Reno…With No Permit?
by Chris Phillips, President, Greening Homes Ltd.

This story began in 2013. The home, a 100-year-old semi-detached unit of masonry construction, had just been purchased. The new owners decided to undertake a whole-house renovation. One of the new owners had a medical condition that made indoor air quality very important, so they understood the need to select building materials that would keep chemicals out of the indoor air.

They met with 12 different contractors and gave themselves two months to decide who was best able to do the work. Although this was a major renovation costing approximately $800,000, the contractor they chose insisted that no building permit was needed. The house was gutted, new plumbing, heating, ventilating and air conditioning added, and new walls and drywall put up. At this stage a painter was called in and he noticed that some aspects of the construction just weren’t right—that some of the construction work seemed to be out of sequence compared with typical building construction progression.At this point the homeowners had spent about $500,000 and were not liking what they were hearing.

The painter contacted me and I met with the homeowners and looked through the home. Evidence of shoddy workmanship was everywhere, including structural problems such as cut floor joists to allow for heating duct runs. Compromising structural components to put in heating or plumbing is never the correct thing to do.

I brought in the municipal building inspector to get a third-party assessment. Unfortunately for the homeowners, the inspection made it clear that the entire house had to be re-gutted and re-done with proper permits and licensed trades for plumbing, wiring and gas fitting. By this time the original contractor had changed his company name and would not return messages.

Even though the homeowners were clear with the original contractor about the importance of protecting indoor air quality for health reasons, no effort seemed to have been made to address this, and many of the materials chosen would have made matters worse. During the planning process we looked at over 50 different materials, including the chemicals from which they were made, and cross-referenced that information with the known triggers for the client’s medical condition.

The clients have been unable to get their money back from the original contractor. As a result, they have had to refinance their home to complete the work and take other financial measures that have made their life more difficult than it should be.

While they went through a significant vetting process, their contractor’s insistence that no building permit was needed should have been a red flag. A renovation project of this scale and complexity will always require permits and multiple inspections.

The TV renovation shows make it look like a complete reno can be done in very little time. This isn’t how things actually work. Even preparing a proper estimate for a project of this size takes me 40 to 50 hours of work. Homeowners should expect to pay for estimates on major renovation work. The idea that a contractor can simply walk through your house and give you a firm price when a significant renovation is involved is simply not realistic.

 The Invisible Underpinning
by Jack Torossian, owner and founder, Golden Bee Homes

In March 2016, a lady called us—she had horizontal cracks on the main floor and diagonal cracks on the second floor of her home in Toronto. We came in to look and I said, “Something’s wrong with the foundation; the cracks shouldn’t go this way.”

Well, she’d had a renovation the year before where a cabinetmaker had removed the walls on the main floor. I asked if she got a permit, but she said no. I asked, “Is he a licensed, insured contractor with RenoMark or BILD?” Same answer.

She said she was a lawyer but not in this field. She had a simple contract for the parts and kitchen work, but nothing for the underpinning work.

I said, “The wall that was removed was a structural wall and that the span is too big, and that’s why you’re having cracks on the ceiling of the main floor. And you have a problem with your foundation of your addition.”

She said, “No, it has been underpinned.” So I asked, “Do you have a permit for it?” She said no. I asked, “How did you pay for it?” And she said cash for that section, but that she had emails confirming the work had been done, and thought that I was just “trying to make extra work.”

I said, “I’ll pay for this part—I want to see if it was underpinned properly.” So we went under the deck, and on our knees we starting digging down—and there was no underpinning at all. The people just took her money and ran away. They charged her a ridiculous amount for that small section of an addition. And I said, “We’ll need a structural engineer.”

She tried to get in touch with her contractor, but he didn’t pick up the phone. So we applied for a permit, underpinned that section properly, removed the drywall on the second floor, did the framing and spray-foamed everything, installed new wiring on the second floor and fixed the problem.

After that, just to help her out, we recorded all this with photos and reports from the structural engineer, myself and the architect, and gave it to her and said, “Now you’ve got a case. You have to go after this contractor so he doesn’t do this to someone else.”

The contractor hired his own lawyer, (but there were always delays). The first time we went to court he said his mother-in-law had just passed away. The second time a very close member of his family had died. After that the judge said to the guy’s lawyer, “Every time you come here, someone’s gotten killed. Next time bring me proof, or else you’re in trouble!”

A day before the judgment, the contractor settled. But my client probably would have saved $21,000 if she’d just gone with me first.

Ten or 15 years ago, I was doing a project in west-end Toronto. The homeowner from a house down the road said he’d like me to do their basement wiring. He said he had a family member who lived next door and asked if I could give them a deal for doing both. I said, “Sure, I’ll do it for $12,000 each.”

The profit was only going to be about $2,000—no exaggeration. But after a couple days he called and said, “No thanks—we found a cheaper guy.”

I said, “OK, good luck—I was giving you a warranty too.”

While we were still working on the first house, that guy passes by and says, “Jack, can you come over again?” So I go over there and I see two rows of wires on the ground. They paid the electrician $5,000 for each house, and now couldn’t find him. I said, “Electricians have licence numbers; you can track him.”

So they tracked him through the electrical safety authorities and this guy shows up, and the authorities say, “Is this the guy who took your money?” And they said, “No!”

The number belonged to another contractor. Putting licence numbers on trucks became an Electrician Association rule, but I think it’s a really stupid rule. The (perpetrator) took one of those numbers and put it on an invoice and went out there and started cheating people. They never found him.

Walking On Eggshells
By Joe Gatti of The Gatti Group Corp.

It was a 700-800 sq. ft. wartime bungalow late last summer in Etobicoke. We were referred by a good friend of the family, who called us and said he knew some really nice people who had started a renovation that was becoming a disaster. The contractor had started demo’ing everything and was bringing them an amended contract every two weeks with a higher price. He’d already taken them for $15,000 to $20,000 by the time we came in. We found out they had no contract or permits and the guy wasn’t licensed, and we thought, “Do we even want to bother with this?”

The first thing we told them was, “Stop! Don’t touch anything!”

We got our engineer in there to do an as-built drawing and make sure things were structurally sound, and then applied for a permit. Their contractor had also had his engineer do some drawings, but when our engineer looked at them, he said they were absolute garbage. And they were (drawn) on the drywall!

The one scary thing—and we always tell people this—is to stay away from the one-man show. We have a booth at the Ontario Home Show and a lot of people see it as a bad thing that we hire trades and aren’t hands-on, doing everything ourselves. Well, you cannot be an electrician and a plumber and a gas-fitter and a carpenter and a drywaller. I’ve never met anyone who carried four licences! You’d be 40 years in apprenticeship. You don’t want anyone who says they can do everything—manage the project, buy the materials, do inspections, deal with you, deal with the designers, swing a hammer and do the electrical and the plumbing.

The project was to gut the main part of the house—550-600 square feet—and open it up. Take a load-bearing wall down, a little partition wall and open up the kitchen. The two bedrooms just needed new flooring, paint and doors. All new electrical. We repositioned some new components in the bathroom and everything was upgraded—a small but quality project.

But it was a long process, including waiting for one of the trades we deal with, as well as dealing with the city—that took an extra month.

So now the clients are two months in, living in the basement and using the laundry as a kitchen sink. And with every delay they go, “Oh great, you’re no better than the other guy.” You can’t win for trying. But those are the sort of situations you find yourself in if you do these jobs, which is why we don’t do many of them. But it’s sad to see people getting hosed, especially when it’s so blatant.

In the end, they were happy to see us go, but grateful too. The other day I got a call from them to do another renovation.

Getting Off On the Wrong Foot
by Sam Lapidus, president, Keystone Ridge Developments Ltd.

A year ago I had a very nice couple in the Dupont/Bathurst area who decided they were going to do an addition on the back of their house.

They had permits, but the contractor they hired decided not to follow the permit drawings and was building them a bigger addition than originally decided. They told me they didn’t ask for that—that the contractor had decided to do it on his own. He’d dug down to the foundation and had started to prepare the footings, and then they got a stop-work order.

In the period between receiving that order and finding me to do the work, they had water penetration into the basement, which caused all kinds of damage to areas of the house they weren’t intending to renovate.

The contractor had taken a deposit for greater than the amount of work that had been done to date and disappeared. And not only had the footings been prepared to be poured in a larger footprint than they had a permit for, they were also done completely backwards. Had they actually poured the footings and done the foundation walls, the possibility of the addition sinking was very high.

We had to remove everything that was there and start fresh. The engineer said we needed to do some further excavation to get down to get to native, undisturbed soil, so they ended up with larger footings. And, of course, we had to build to the specs of the permit. The whole project—a simple one-storey addition, moving their kitchen back, at the back of the house—took about two months.

Between what they paid their previous contractor and what they had to pay us to get them back to where they were to begin with, it probably cost them $50,000—on what should have been a $60,000 job total! So pretty much double the price.

It’s all the wasted time too. The previous contractor had probably been working there a few weeks. But he wasn’t showing up every day and wasn’t making progress. I was able to bring a Bobcat around the side of the house with a deep arm and shovel. I could have dug that out in two days, put the footings and steel down on day three, and on day four I could have had the inspection.

I know there must have been tears with all they had to go through—fighting with this guy to show up, to give them back money, to rectify the situation. Plus, he’d left them in an unsafe condition.

Through the OHBA, I sit on the Health & Safety Committee and I’ve been working with the Ministry of Labour as a member of the Construction Health and Safety Action Plan. The violations were everywhere. I’m shocked the inspector didn’t call the Ontario Ministry of Labour.

We had another interesting one that we turned down. The husband had decided to take on the whole renovation. His wife said. “Don’t do it.” But he started it, ripping out parts of the house, running electrical. He didn’t have a permit, and the wife is like, “Get a contractor or I’m leaving you.”

It might not have been quite that extreme, but it looked like someone had gone in with a sledgehammer and punched holes in the wall so they could access places to run electrical, except that he was running extension cords! I guess he figured that was easier than running proper Romex cabling.

The house was a firetrap. And it was a semi, so they put their neighbours at risk too. I looked at it and thought it was going to be a headache with the physical situation, and I didn’t think the domestic situation was going to be easy to navigate either.

Originally published Renovation Issue 2018 Ontario Home Builder.

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