Last spring, widower Wendy Wazny, 54, was approached by a "cash-only" contractor when she was looking to renovate her Burnaby home.
"He said I didn't need permits and I would save on the HST," she said.
But Wazny was skeptical and turned instead to Vancouver's RJR Construction Ltd., a member of the renovation council of the Greater Vancouver Home Builders' Association (GVHBA.) The 150 council members are branded as RenoMark renovators, which means they must carry at least $2 million in liability insurance, post a bond and guarantee their work for two years.
This June, after $160,000 in renovations in the kitchen and most of the upstairs of the 22-year-old home, Wazny's house was featured in the annual parade of renovated homes that the renovation council presents each year.
"I am delighted with the work," Wazny said. "It was finished on time and at the budget quoted."
Not so lucky
But Coquitlam homeowners Betty and Rob Wang, both 30, had a much different, must worse experience – one that is all too common in Metro Vancouver's $3.8 billion home renovation industry.
The Wangs had just bought their first home and wanted to renovate the Linton Avenue two-storey house before they moved in. A two-man contracting team they had hired through Craigslist to install heating equipment offered to handle other renovations in the home, including finishing the basement and adding decks.
The contractors said they would get all the necessary permits.
"They told us not to worry," Betty Wang said.
The Wangs paid for materials and labour as the work progressed.
But City of Coquitlam city building inspectors, acting on a tip from a neighbour, discovered that no one had applied for permits, even though the work involved electrical and plumbing alterations and changes to the home's exterior. On May 31, the city stuck a stop-work order on the home's front door – a process they have repeated an average of seven times a month this year.
The Wangs are now living with relatives while they wait "four to six weeks" for permits. The contractor has disappeared with $42,000 of the Wangs' money, leaving the renovation incomplete and the house torn apart and unlivable.
"We trusted the contractors," Betty Wang said, "but now they won't even return calls."
The "Wild West"
Consultant Glen Duxbury, president of Glenn Duxburg & Associates of New Westminster and a certified home inspector, is now helping the Wangs through the permits and renovation process. He said he sees many homeowners in similar straits.
"Metro Vancouver's renovation industry is bit of a Wild West," said Duxbury, adding that there are few guarantees, even with renovation council members.
"RenoMark is all voluntary."
Homeowners must take responsibility to check out any contractor, Duxbury said, which includes seeing if the company is a member of the Better Business Bureau, has had any trouble in the past and carries liability insurance.
When a contractor is hired, simply asking for a written contract is not enough, added Duxbury, who has consulted on scores of renovations gone bad.
"The contract is often heavily weighted in favour of the contractor," he said.
Homeowners should insist in putting their own requirements in the contract, he advised, such as a $100-per-day penalty for every day the work exceeds the agreed completion date. (See sidebar "Five tips for choosing a home renovation contractor.")
Duxbury said that single, elderly women are most at risk of ripoff renovators.
"Sometimes these contractors can use physical bullying," said Duxbury, who has personally stepped into such situations.
Duxbury fears that the number of illegal renovations is increasing.
"Homeowners must realize that if no permits are taken out, there is no oversight from city inspectors and [homeowners are] setting themselves up for trouble if the contractor has not done the work properly."
Renovation council chairman Jeff Bain also highlighted the risks to the customer.
"It only takes printing a business card to call yourself a renovator," he said.
Bain was recently called in to fix a six-figure Vancouver renovation – done as a cash deal – that had gone wrong.
"It turned out the [rogue] contractor was a barista."
City of Vancouver assistant building inspector Carli Edwards, whose office plastered stop-work orders on 165 home renovations in the first six months of this year, is all too familiar with these situations – and believes there are many more offenders who never get stop-work orders. She said most offenders are discovered only when neighbours complain.
If caught, the homeowner faces two options: either get the proper permits, which will then cost double the original fees, or have the work removed.
Insurance coverage
Edwards said the two most common stop-work orders in Vancouver renovations are for illegal rental suites and non-conforming decks.
"Many people don't realize that the permit is for their own safety," she said.
For example, when city inspectors discover illegal rental suites, they often find inadequate fire separation between the rental suite and the rest of the house. Aside from safety concerns, Edwards said that could negate insurance coverage if the work has been done outside the law.
Generally, Edwards said, city permits are required when there are changes to natural gas lines, even installing new gas appliances, as well as plumbing and electrical changes and work that affects the foundation or the footprint of the house.
Some suburban municipalities force "unnecessary delays" sometimes for months, before awarding renovation permits, said Peter Simpson, GVHBA president and CEO. "Homeowners often want the renovation to start right away."
Simpson added that they will avoid permits if they fear delays.
He said GVHBA surveys show increased demand for home renovations:
- 56% of those attending a renovation seminar this spring said they planned to renovate within 12 months;
- nearly one in three plans to spend between $50,000 and $100,000; and
- nearly 12% estimated their renovation would cost more than $200,000.
Simpson said legal renovations in Metro Vancouver could top $4 billion in 2012, but that under-the-table work could easily represent $1.2 billion.
