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While no property is perfect, buyers of both new and older homes should be sure to do their due diligence before purchase to guard against future construction-related disputes, says Toronto area real estate litigation lawyer Raong Phalavong.
In a recent case, a Toronto area man sued a homebuilder and the City of Vaughan after he discovered that his nine-year-old semi-detached house had no insulation in the attic and was full of mould. The city in turn sued the builder, while the builder is suing the insulation installers and the city, with each reportedly saying the other should pay if a judge rules in the homeowner’s favour. Read Toronto Star story
“This is a cautionary tale for not only home buyers but to all parties involved in this cycle (sometimes vicious) of finger-pointing when something goes wrong with a house,” says Phalavong, a lawyer with Cambridge LLP.
Disputes like this are not only restricted to older homes. Lately, Phalavong says she has been seeing more claims arising from new home builds.
“This may be a product of too many houses-too little time, anxious home buyers who ignore the old adage, “if it is too good to be true, it probably is”, trusted relationships with builders and city officials that lend itself to a backdrop to lackadaisical attitudes and time is money…the less time a new project takes the more money to be had by all involved. Unfortunately, speed comes at the cost of due diligence for all parties involved,” she says.
In terms of who is generally liable where something ends up ‘missing’ from a new house or building isn’t done to code, Phalavong says it depends on what is missing and what, if anything, was represented.
“When things go missing, it depends on the contract and the duties owed to the homeowners by various third parties. City officials sign off at certain stages, so do architects, and a slew of other parties who may have worked on the home. I highly recommend engaging with a lawyer rather than a real estate agent before you sign an agreement of purchase and sale to ensure you have the right verbiage to protect or highlight your concerns,” she says.
Also, Phalavong adds that while Tarion is an entity that was designed by the government to protect homeowners of newly constructed homes, they will not assist buyers of older homes.
Ultimately, she says, homeowners should be extra diligent in protecting their own rights and should seek referrals from friends or family members when it comes to finding qualified home inspectors.
This includes asking questions such as whether the inspector is a member of the Ontario Association of Home Inspectors, how long have they been inspecting, any other degrees or designations they have – in engineering, for example, or a specialization in some aspect of the construction phase – and any current law suits.
“The key is the more you know, the more confident you feel in your decision. If inspectors do not have ready answers to any of these questions, walk away. Homeowners should do the inspection with the home inspector and yes, home inspectors (good ones) will go to the trouble of going on roofs, going in attics and pulling access panels even if they are somewhat obstructed,” she says.
“The reality is that nothing is perfect. What you are owed as a potential homeowner is information, good or bad, that will help you weigh the costs and benefits of purchasing that home,” she adds.