The Ins and Outs of Suing Your Contractor in Ontario

Renovating a home can be a daunting and often stressful experience for homeowners, not to mention a significant financial investment. However, when everything goes according to plan, and the hammering and sawing finally cease, the end result can be well worth it. Picture stepping into your stunning new kitchen, indulging in the luxurious shower you’ve always dreamed of, or finally enjoying that mini-bar you’ve been saving up for for years.

But what if your kitchen remains unfinished, your shower leaks and doesn’t drain properly, or your mini-bar looks like it was rushed? If you find yourself in such a scenario, your best bet may very well be to file a lawsuit. So, here's everything you need to know suing your contractor in Ontario.

Key Terms to Understand

Contract

A contract is an agreement between two or more people or parties where one party promises to do something in exchange for something valuable. In this case, that would be money.

Statement of Claim

In Ontario, a statement of claim is required to initiate legal proceedings for claims over $35,000. It must be prepared and filed with the court, then served to the defendant(s). 

This document outlines the remedies and damages sought, provides formal notice of the lawsuit, and sets the stage for the legal process. It should include clear statements of the requested remedies, relevant background information, and identification of all parties involved.

Civil Case

A civil case is a private legal matter in which one party sues another, commonly referred to as a lawsuit or action.

Cooling-off Period

A cooling-off period is a designated timeframe during which you can cancel a contract without giving a reason or facing penalties.

When Can You Sue Your Contractor?

The contract between you and your contractor—whether written, oral, or implied—is central to your ability to sue them. For renovations, the contract between the homeowner and contractor details the agreed-upon scope of work, cost, timeline, and more, in exchange for payment.

The contract between you and your contractor is the crux of your lawsuit. If they failed to complete the agreed-upon work or if it was done inaccurately or negligently (poor worksmanship), you have valid grounds for a lawsuit. The primary consideration when pursuing legal action against your contractor is the damages at stake.

Make sure to also check out our article "How to Avoid Being Cheated by a Renovation Contractor."

What Are Damages?

In common law, damages refer to the monetary amount awarded to a successful party in a contract dispute. For example, if a renovation error caused $8,000 in fire damage to your kitchen, your damages would total $8,000. Damages aren’t always clear-cut, and the court may need to evaluate additional types. Unfinished or poor-quality work, along with the costs to address these issues, can significantly raise your total claim.

What Does the Law Say About Homeowners' Rights?

Fortunately for you, as a homeowner in Ontario, the province has rigorous laws to protect you in such situations. In fact, some of these laws not only outline your rights but also offer specific remedies that can form the foundation of a claim if you decide to sue your contractor.

Here are some key laws to be aware of and how they protect homeowners:

Consumer Protection Act

• Ensures consumers have rights to honest and fair dealings.

• Requires services to meet a reasonable standard of quality as per the agreement between the consumer and the supplier.

• Prohibits contractors from demanding payment for goods or services that were not ordered, even if the consumer used them.

• Protects consumers from false, misleading, or deceptive representations, such as falsely claiming that a service or repair is needed or misrepresenting the qualities of services.

• Defines unconscionable representations as unfair practices, including exploiting a consumer’s language barrier or impairments and overpricing services.

• Allows consumers to cancel agreements if they enter into them after an unfair practice has occurred, entitling them to legal remedies, including damages.

• If cancellation is not possible due to services already being provided, consumers can recover any excess amount paid or damages.

Construction Act

• Relevant for construction disputes, defining when work is considered substantially performed.

• States that if the work is mostly done and the space can be used for its intended purpose, it is deemed substantially performed, even if minor defects remain.

• Requires proper invoicing to establish agreed-upon work and its satisfactory completion.

• Discusses liens and holdbacks, which are financial provisions to ensure contractors are paid and can be used to enforce completion of unfinished or incorrect work.

New Home Construction Licensing Act  

• Requires all builders to be licensed and meet prescribed requirements for added consumer protection.

• Mandates that all terms or conditions must be included when a builder enters into a contract with a new homeowner.

• Prohibits false, misleading, or deceptive claims in advertising, documents, or materials by contractors.

Ontario New Home Warranties Plan Act  

• Requires contractors to warrant that the home is free from defects in materials and constructed in a workmanlike manner.

• Allows homeowners to claim a refund from the guarantee fund (excess payment over the value of work and materials provided) if the builder fails to substantially perform the contract.

How to File a Successful Lawsuit Against a Contractor/Renovation Company

Although you don't need to follow these steps in this exact order, for the best chance of coming out on top, you're still going to want to accomplish each one. 

Determine Your Desired Outcome

While it was previously stated that you don't need to follow the exact order of these steps, it's still a good idea to start by figuring out what you want. So, ask yourself: what do you want from your contractor? 

If you want them to complete or redo their work, keep in mind that you'll be interacting with them in your home, which may make suing less advisable. On the other hand, if your primary goal is to recover your money, pursuing a lawsuit could be the more appropriate course of action.

Consider Pursuing a Settlement

If you find yourself in a situation where your contractor hasn’t completed the work or has done it poorly, it's advisable to first seek resolution outside of a potentially costly and lengthy civil case.

Start by sending a letter of demand. This letter should outline the issues encountered during the renovations, specify how you want to be compensated (whether by having the work redone, completed, or refunded), and include a deadline for resolution. Be sure to conclude the letter with a clear indication of your willingness to pursue legal action if necessary.

After sending the demand letter, you might arrange a meeting with the contractor to discuss potential solutions that could satisfy both parties. If these discussions seem unproductive, you may want to involve a lawyer who can negotiate on your behalf in a more formal manner.

Gather All Records

Whether you're suing or settling, it's crucial to have all your facts straight. So, collect all your records to establish a clear timeline of events. Note when you initially hired the contractor, when you first identified any issues, and whether you attempted to address these issues with the contractor before considering legal action. 

Keep track of any bills, documents, contracts, and communications related to the work performed by the contractor. This information is essential in building and supporting a strong case and demonstrating any issues that arose during the project.

Hire a Lawyer

Filing a lawsuit can be a challenging process, so if you decide to proceed, it’s advisable to hire a lawyer. Look for someone who specializes in Construction Act claims to ensure you receive the best guidance and representation.

If Your Damages Are Under $35,000

If your damages are $35,000 or less, you can take your case to Small Claims Court. This option is faster and more cost-effective than going to Superior Court, though it only awards monetary damages. A licensed paralegal can represent you in Small Claims Court for lower fees than those typically charged by lawyers in the Superior Court.

FAQ

Can You Get Your Money Back From a Contractor?

Under the Consumer Protection Act, you have the right to cancel your contract and receive a refund if the contract includes a cooling-off period, if the contractor has engaged in unfair business practices, or if the service is not completed within the timeframe specified in the contract. If there is no deadline stated in the contract, the service must be completed within 30 days from the date you signed the contract.

How Long Does a Civil Lawsuit Take in Ontario?

Unfortunately, if you’re unable to reach a settlement, it’s going to take about two to five years for your civil trial to be held. There’s an extensive backlog of civil trials in the province. 

How to File a Complaint Against a Contractor in Ontario, Canada?

To file a complain against a contractor in Ontario, you need to fill out the Builder/Vendor Complaint form with the Home Construction Regulatory Authority (HCRA).