THUNDER BAY — A Thunder Bay couple has learned why the Canadian Home Builders Association says it's risky to hire a contractor without a written agreement spelling out all the details.
A dispute over the cost of an addition and renovations to the couple's house ultimately ended up in Superior Court, where the judge ruled in favour of the contractor.
The builder claimed there was a verbal contract for $186,000 plus HST.
The homeowners maintained the agreed-upon price was actually $173,000 including HST.
Several issues complicated the case - including changes that were made to the scope of the project, a disagreement over whether finishing work was included in the price, and the couple's claim for multiple deficiencies in the work that was done.
The homeowners had already paid out $145,000 before their relationship with the builder went off the rails.
In court, the company asked for a further $80,000, while his clients counterclaimed for a $36,000 overpayment.
The judge expressed some sympathy for the couple's position.
In her decision, she described the contractor's records as "confusing" in some instances, and added "Had an account summary of the amount remaining owing been provided after each payment, at least early in the contract the parties may have been alerted to the fact that they had a misunderstanding as to the scope of the contract and total price."
However, Justice T.J. Nieckarz also said the company's business practices did not cause a breach of contract.
"This was a fixed price contract. [The contractor] was under no obligation to provide a breakdown of what each item cost...Had [the owners] wanted to know what amount they could expect as credit for work they were doing themselves, then asking specifically this question would have been a more reasonable approach."
The judge found that it was difficult to precisely determine the price the parties had initially agreed on.
She noted that the builder's own handwritten records showed a variety of numbers, but that he struck her as "honest and forthcoming in his evidence," and determined that he had proven a contract price of $183,500.
The contractor acknowledged that the homeowners were entitled to a credit of almost $20,000 for unfinished work, deficient work or work they did themselves.
To that amount, the judge added a further $8,000 for incomplete and deficient work.
But she awarded the contractor a net amount of about $62,000 plus pre-judgment interest.
The Canadian Home Builders Association cautions homeowners that "not having a written contract is a real problem" when disputes arise with builders.
On its website, the association adds that although having a written contract doesn't prevent every problem, it can make problems less likely, and a lot easier and less expensive to resolve.
Otherwise, it warns, "The judge will have to decide who is telling the truth, and the final result may not be to your liking."
