It’s A Bad Bet To Buy An ‘Illegal’ Home, Builders Warn

  • 11/17/17
  • |          Waterloo

Home builders worry that as the region grows and house prices soar, buyers may be more tempted to save a few bucks by turning to unlicensed builders.

Don’t do it, home builders and building officials warn. Ask questions. Research your biggest purchase. Ponder risks such as shoddy construction and warranty headaches.

While it’s OK in Ontario to build your own home without licensing, it’s illegal for an unlicensed contractor to build a new home and offer it for sale. Ontario’s homebuilding regulator, Tarion, has opened eight investigations into 11 local homes since 2015, resulting in three convictions for illegal building.

“That is only based on the tips that we get,” said Siloni Waraich, a Tarion vice-president. Looking beyond these small numbers, she cites heart-wrenching stories of buyers who lost life savings because they didn’t have a proper contract.

One example: an elderly couple in North Bay was forced to live in their garage after an unlicensed contractor abandoned them. “They were too embarrassed to tell people,” she said.

Home builders and municipal building officials gathered Thursday to complain about unlicensed builders who they fear will sour people on the industry. They pressed for Ontario legislation to close loopholes, amid proposed reforms to the home warranty program.

“How many of these illegal buildings are out there? We’re not sure,” said Mike Seiling, director of building for the City of Kitchener. “We have people that say they’re going to build for themselves. They have every intention of selling it as soon as possible.”

Unlicensed contractors may hide deficiencies or create workmanship problems that don’t violate the building code but may haunt future owners, officials warn.

“When you have builders that fly by night, the illegal builders, they’re coming in and in six months they’re turning around and leaving. There’s a lot of shortcuts they can take,” said New Dundee home builder Rick Martins, a vice-president with the Ontario Home Builders’ Association.

Tarion paid out more than $1 million last year on warranty claims related to homes built illegally in Ontario.

Homebuyers are urged to be suspicious of builders who say:

•You don’t need a Tarion warranty because I offer my own.

•I built the home for myself but decided to sell it instead.

•You don’t need a warranty if you leave my name off the building permit and say you’re building it yourself.

Builder registrations can be found in the Ontario Building Directory on Tarion’s website at

“We’re trying to provide a greater sense of consumer protection and awareness,” said Joe Vaccaro, chief executive of the Ontario Home Builders’ Association.

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