"A number of homes sold and occupied and not one single trade or supplier received a red cent."
Drywall contractor Sean Keane explains Ontario's lien act, and how it contain loopholes that can make it very difficult for a sub trade to collect from a builder/developer.
December 11, 2014 by Steve Payne
Last week, Rob Koci posted his experience, many years ago, placing his first lien as a framer in an attempt to collect $1,800 he was owed. He got sued for $250,000 by the developer/GC he was working for.
Sean Keane, Durham, Ont. drywall contractor (who in an unrelated story is currently suing Ontario’s WSIB for $6-million) had this to say about the power of developers and a loophole in Ontario’s lien laws.
“(Re: Not Getting Paid.)
I can pretty well guarantee that just about every contractor and supplier in this province has faced this. I guess over the past few years someone in government has paid it some attention. Just prior to our last Ontario election, a “prompt payment” bill was introduced at Queen’s Park. Though it got to a second reading, like a number of bills brought forward, it died on the floor when parliament was dissolved.
I can offer you this little intrigue: I know as fact that over the years, right here in Durham, there are a number of homes sold and occupied (in which) not one single trade or supplier ever received a red cent. You can bet every penny you have that Durham is not unique…
You (may) question why there were no liens on these properties. The reason is simple: the liens could not be legally registered. Some bright government official back in the late 80’s or early 90’s, to protect he purchaser and the bank, decided to change the lien act. The 45 days was still the rule of thumb – but with a twist: you could no longer lien a home that was occupied or financed by a third party. You could however lien the land adjacent if it was owned by the builder.
Hence a new loophole was created: the developer is the owner of the property not the builder – even though both may be owned by the same person or group of persons. Canadian law dictates that an incorporated company is a separate individual. Therefore the lots are provided to the builder on consignment.
There that went!
Over the past 25 years in this business I have seen it all and will add another little tidbit. This industry was a once wonderful career – you question why there are no young workers replacing the old. This is one of the reasons. Do you think any of us would want our children to partake in this madness? From the taxation and government nanny-state red tape, to this treatment, we would never allow our kids to face (this). How many young men and women have seen their parents beaten and broken by this industry? A lot more than you think. Every day, I question why we even continue. It’s no longer a career: It’s a task to stay afloat.”
Visit Sean Keane’s website, www.wsibdefence.ca, if you would like to learn more about his – and other contractor’s – struggles to get fair and legal treatment from Ontario’s WSIB (especially when getting audited or fined).