A B.C. judge has ordered a contractor to refund a homeowner’s $10,000 deposit because the renovation contract did not include a completion date.
Judge Paul Pearson’s ruling on the dispute was posted online last week – bringing an end to a years-long conflict while also weighing in on a broader issue.
“The issue in this matter is whether the British Columbia Business Practices and Consumer Protection Act mandates the inclusion of a completion date in home renovation contracts,” the decision begins.
“For the reasons below, I find that it does, and that a failure to include a completion date in writing allows a consumer to cancel the contract within one year and demand a full refund without deduction.”
In this case, Li Fan hired Northern Tropic Homes Ltd. to build a sunroom – signing off on a renovation with a price tag of $114,744 in December of 2021 and paying the $10,000 deposit.
“Significantly, the written agreement did not set out the anticipated completion date of the work,” the court heard.
Ten months later, construction had not started and no building permit had been obtained. The contractor told Li that global supply chain issues due to the COVID-19 pandemic were making it difficult to get the necessary materials, and that shipping costs had skyrocketed. The project, the contractor told Li, would cost an additional $17,310 plus GST.
Unwilling to pay the increased cost, Fan informed the contractor he was cancelling the renovation, terminating the contract, and asking for the return of the deposit.
The contractor refused the refund, citing the amount that had already been spent on drawing up plans and purchasing materials – estimating the cost incurred at $23,611.52, according to the decision.
“I am satisfied the defendant has expended significant resources on the preparation of the project and manufacture of the glass and aluminium components,” Person wrote.
Fan’s deposit was not returned, and he took legal action.
Person’s decision, he notes, is only the second one published in the province that applies B.C.’s consumer protection legislation in the context of a home renovation.
Fan was not, the judge noted, seeking damages for breach of contract. Instead, the decision explained, he was arguing the Business Practices and Consumer Protection Act allows a “consumer” to terminate an agreement with a “supplier” without penalty in certain circumstances.
The written agreement, Fan claimed, was what the legislation calls a “future performance contract” – meaning that the parties agreed the “goods or services” would be provided and paid for in full at a later date.
The judge explained that these contracts are legally required to contain a number of specifics – including a date of completion. Omission of any of the “required components” gives the consumer the right to terminate the contract without penalty within a year.
The contractor, however, argued that requiring a completion date “ignores the functional realities of construction projects,” according to the decision.
While Pearson acknowledged that timelines for home renovations can be delayed by the permitting process, supplier issues, and labour shortages – he found a completion date is still required.
“With no timeline for completion as a term of the contract, consumers are left without any remedy for delay if renovation work extends for months, or even years, past their expectations,” the judge wrote.
The legislation, the judge wrote, doesn’t limit how far in the future a completion date can be set for, nor does it preclude conditions being written into the contract that account for the possibility of delays.
“It simply directs one be set,” Pearson concluded.
