New Home Delays. How to Protect Yourself as a Builder.

As a good standing member of the Hamilton-Halton Home Builders’ Association (HHHBA), you want to deliver every new home you build on time (and preferably, on budget too).

Sometimes, home building is smooth, simple, and seamless. Everything goes according to plan and you – and your customer – are satisfied with the process and results.

On the other hand, sometimes things get out of control. And many times, there’s nothing you can do about it.

Although you are probably familiar with delay responsibilities, it never hurts to go through them again (and to pass along this information to your clients too).

Delays that aren’t your responsibility

When there are delays, a common source of friction between the buyer and you (as the builder) is a misunderstanding of responsibility.

Although customers can be understandably upset when there’s a delay, it’s important to note and communicate that under the Ontario New Home Warranties Plan Act, you are absolved of:

  • STRIKES: If one of your suppliers or partners goes on strike, which is something you cannot control (let alone foresee).
  • ACT OF GOD: Natural disasters such as tornados, unexplained fallen trees, lightning strikes, floods, and other impossible or impractical events.
  • CIVIC INSURRECTION: Remember in March 2018 when a mob of “We Are the Ungovernable” people vandalized property on Locke Street? That’s a civil insurrection.
  • ACT OF WAR OR TERRORISM: If the new home is damaged or destroyed as a result of wartime or terrorist activities.
  • PANDEMIC: Should an infectious disease (like SARS or the Ziska Virus) spread and impact your ability to safely build the house.

Now, although many items on that list seem far-fetched, it’s not uncommon for strikes or acts of God to occur.

That’s why you should always share this information with your clients before beginning a new home construction project.

Common delays you could be responsible for

Of course, your main objective is to build every home properly with no issues whatsoever.

However, unlike the elements listed earlier in this blog, there are some delays which may fall on your shoulders:

  • POOR WORKMANSHIP: If poor craftsmanship or defective materials results in extra work being done – and delays – you might have to provide compensation.
  • LABOUR SHORTAGE: Should you be unable to find suitable workers or sub-contractors in time, you could be responsible for the delay.
  • PERMIT DELAYS: You never know if certain permits will be granted immediately or if there will be a delay. In any case, it’s something you should be mindful of when crafting a contract.
  • MATERIAL SHORTAGE: Things like wildfires and hurricanes can impact lumber production. However, the acts of God mentioned above only apply to the construction area itself, and not supply sources.

Claim and compensation requirements

As outlined by the Ontario New Home Warranties Plan Act, customers have two opportunities should they wish to make a delay claim:

  • If a buyer terminates their contract within 30 days after the outside closing date, they have one year to make a claim.
  • After the customer moves into the new home where occupancy has been delayed, a claim can be made within the first year.

If you (the builder) are at fault for the delay (and that includes failing to inform the customer), you may have to provide compensation up to $7,500.

Contact us for more information

If you wish to learn more about the HHHBA, including information on things like:

Contact us with your questions or comments. We’ll reply quickly with the answers you’re looking for.