Protect Yourself From Home Contractor Fraud
Published on 29 August 2022, 07:22:56 AM
You’re so supercharged about buying that new build home, you probably haven’t even thought about how to protect yourself from home contractor fraud.
Who could blame you? New build homes are pretty fantastic when everything goes right, and home renovations can add thousands to your home’s value.
Just watch out for home contractor fraud and contractor scams like these:
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Unregistered Builders
Tarion registration is mandatory for Ontario new home builders. Prevent home contractor fraud by checking the Ontario Builder Directory to confirm yours is registered under the Ontario New Home Warranty Plan Act. Buying a new home from a builder in Ontario.
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Unsolicited Renovation or Repair Schemes
Beware of contractor scams by renovators who knock on your door offering home repairs or renovations, particularly if they need a large deposit (limit any deposit to 10% or less).
Consumer protection laws in Ontario give up to 10 calendar days to cancel contracts you sign in your home that total over $50. No reason is required and, unless the work has already started, you can’t be charged cancellation fees.
If you start work before the cooling off period elapses but decide to cancel, you are only responsible for reasonable labour and materials charges, not the whole contract. Report fake contractor scams.
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Coercion or Intimidation
Contracts signed under coercion or through intimidation have been overturned in Ontario courts. Contractor scams that trick, frighten, or bully homeowners into agreeing to renovation or repair work may be voided by filing a lawsuit in a court, or filing a complaint with an agency that can assist you. Complain to Consumer Protection Ontario.
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No Informed Consent Given
You must be a mentally competent adult, able to understand the contract terms and conditions, and give informed consent to sign any contract. Services from a door-to-door salesperson or general home contractor must be in writing. Ontario consumer protection law requires that your contract include all the details of your purchase, and the credit terms. What is informed consent?
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Unfair Business Practices
Heard about the contractor scam where you receive a bill for goods or services you didn’t request? Negative billing practices are unlawful, making the bill void. You don’t have to pay for this brand of home contractor fraud.
If you are billed far more than you agreed to in a written (or verbal) contract, dispute the bill and ask for a written explanation. Your contract must include the terms and conditions you agreed to, and all of the charges (tax included).
You may be able to make your case in Small Claims Court (for claims under $35,000), or, for larger amounts, in Ontario Superior Court of Justice. You can also have a lawyer write a demand letter to put an end to this home contractor fraud. Consumer protections from home contractor fraud.
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New Construction Delays
New construction not ready by closing is a common complaint among Ontario home buyers worried about home contractor fraud.
Ongoing delays in completing your new home build can cost you money — lost time spent haggling with the contractor, or renting while you wait to take possession. You may even be owed compensation, or be able to take a contractor to court. Mandatory mediation for lawsuits in Ontario.
How many times can a builder delay closing in Ontario?.
Why Not All Contracts Are Equal
Yours may be misleading, misrepresent goods or services being provided, or have huge legal loopholes that could trip you up.
Using inferior building materials, inflating material costs, and delaying completion only to charge the homeowner more are common contractor scams. Forged invoices, fake environmental test results, and insufficient insurance? They’re right up there with the worst home contractor frauds.
Look before you leap by:
- asking for references
- checking Better Business Bureau (BBB) or Chamber of Commerce websites for construction scams
- searching the Ontario Consumer Beware List
- only accepting goods and services that satisfy the standards and expectations in your contract
- and not paying for services you didn’t get.
Having a real estate lawyer review the terms and conditions, before or after you sign, can help protect you from home contractor fraud. File a complaint with the BBB in Ontario.
What to Do If You’re a Victim of Contractor Scams
If you’re a victim of home construction fraud because your builder:
- failed to live up their written commitment
- skipped town with your deposit
- used substandard materials
- gave you a shoddy product or service
- or has cheated subcontractors out of their payment
contact a real estate lawyer pronto. The clock on your legal right to sue or take other action to fix contractor scams could be ticking.
What a real estate attorney for new construction does.
Why You Need a Real Estate Lawyer
Axess Law’s licensed real estate team reviews new build home agreements of purchase and sale for clauses that could trip you up. We go over the fine print with you, and liaise with the builder if amendments are advisable.
Having your agreement of purchase and sale reviewed.
Professional home inspections can point out deficiencies your builder should correct under your Tarion new home warranty before you take possession. Pre-delivery inspections are required under your Tarion warranty, but would you know what to look for? Axess Law reviews your contract for clauses about new build home deficiencies. Why you need to be careful how you word the home inspection clause.
If finding the right financing takes you longer than you planned, Axess Law can negotiate with your builder to extend the agreement of purchase and sale. We advise you on cancelling your purchase if you change your mind, or financing just isn’t available. Or we finalize mortgage documents if the sale goes through as planned and you need to discharge existing mortgages and accept a new offer from a lender. Discharge mortgages legally.
What title insurance does for your home.
Financial claims and construction liens can delay, stop, or complicate your real estate transaction. Your Axess Law real estate lawyer searches title to your property, and informs you if we find any encumbrances that need attention before your sale closes. We add title insurance for extra insurance against mortgage frauds and title errors. Title is transferred to your name at a local land registry office, and we hand you the keys to your new build home. What’s a construction lien?
Remove a property lien that’s blocking your title transfer.
Access Lawyers Remotely, Without Leaving Home
Axess Law video conferences online with you anywhere in Ontario. We can arrange a remote video conference call any time that’s convenient for you, using any compatible device at your disposal. Our secure, confidential video conferencing software works with home computers, laptops, tablets, or mobile devices. We witness your signature online, and email you a final copy for your records.
Using a virtual real estate lawyer.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
Find a real estate lawyer near you.
Book Online Appointments or Call Us Now
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