Why Construction & Renovation Disputes Are So Common in Vancouver
Many immigrants and new homeowners in Vancouver want to build or renovate their dream home—or invest in property development. But the process is complicated, and legal disputes with contractors are frequent and expensive. Here’s what every homeowner and builder should know to protect themselves.
How to Choose a Good Contractor: Due Diligence First
Before you sign anything or pay a deposit:
- Check Licenses and Insurance
- Confirm the contractor’s business and trade licenses.
- Ask for proof of liability insurance and WCB (Workers Compensation Board) coverage.
- Ask for Project Insurance
- Make sure the contractor has insurance for your specific project—coverage should be at least $1 million.
- Check Court Records
- Search online court records to see if the contractor has a history of lawsuits.
- Red flag: Contractors who sue (or get sued by) homeowners often—avoid them.
The Danger of Simple or “Homemade” Contracts
Many homeowners trust the contractor’s “one-page” contract—often in Chinese or very basic. This is a big mistake.
Why?
- Simple contracts miss important details about price, scope, materials, schedule, penalties, and quality.
- Most disputes I’ve seen in court start with unclear or incomplete contracts.
- Court cases over building disputes are long, complex, and expensive—often requiring expert reports and months in court.
What Should a Good Construction or Renovation Contract Include?
- Total Price
- Is the price fixed or variable?
- Does it include materials, labour, GST, design fees, city permits?
- Completion Deadline
- When will the project finish?
- What are the penalties for late completion?
- What counts as “force majeure” (uncontrollable events)?
- Contractor’s Responsibilities
- Who does design, drawings, permit applications, quality checks, hires subcontractors, and orders materials?
- Payment Schedule
- When are payments due? What’s the interest or penalty for late payment?
- Always hold back at least 10% of payments until the end (see below).
- Materials List
- Specify brands, models, country of origin, and prices for key materials.
- Termination Clause
- When can you or the contractor end the contract?
- Protect your right to terminate if serious problems aren’t fixed.
- Default & Penalties
- What counts as breach of contract?
- What are the consequences?
- Quality Guarantee
- How will defects be fixed?
- How long is the warranty?
Why a 10% Holdback Is Crucial
What is a builder’s lien?
If your contractor doesn’t pay their workers or suppliers, those people can put a legal claim (lien) on your property.
How to protect yourself:
- By law, you must hold back 10% of each payment and not release it until 55 days after the project is complete.
- This protects you from having to pay twice (once to the contractor, once to their unpaid subcontractors).
Ask the contractor to prove all subcontractors and suppliers have been paid before you release the final payment.
What to Do If a Dispute Goes to Court
If You’re a Homeowner
- Respond within 21 days if you’re served with a court claim from a contractor.
- If you ignore it, the contractor can get a default judgment—the court may freeze your bank accounts and seize money to pay them.
- Don’t believe “I never signed anything so they can’t sue me.” Western courts accept verbal agreements, payment receipts, and other evidence.
If you get a default judgment:
- Hire a lawyer quickly to ask the court to set aside the judgment.
- You’ll need to explain why you missed the deadline, and show your side has a legal defense.
If You’re a Contractor
- File a builder’s lien with the Land Title Office.
- If unpaid after one year, you must file a lawsuit in Supreme Court to enforce the lien.
How to Prevent and Handle Disputes
Prevention Is Best
- Hire an experienced construction lawyer for your contract—don’t use a contractor’s template.
- Get everything in writing—scope, materials, schedule, payment, quality standards.
- Do your homework on the contractor—check reputation, insurance, and court history.
During the Project
- Keep all communication records, emails, texts, and notes from meetings.
- Take photos and videos of work progress.
- Keep copies of all payment receipts.
If a Dispute Happens
- Respond to any court documents immediately.
- Gather all evidence—contracts, photos, expert reports.
- Consider hiring a construction expert for an independent quality assessment.
Most Common Construction Disputes (and How to Avoid Them)
- Poor workmanship or materials
- Solution: Specify brands/models and quality standards in your contract.
- Delays
- Solution: Write clear milestones and penalties into the contract.
- Extra charges
- Solution: All changes (change orders) must be in writing, with agreed cost and timeline.
- Builder’s liens
- Solution: Hold back 10–15% of each payment; get proof all subs are paid.
The Role of a Construction Lawyer
- Drafting and reviewing contracts
- Advising on dispute resolution
- Defending or enforcing builder’s liens
- Representing clients in court
Choose a lawyer with experience in BC construction law and litigation.
Other Experts to Consider
- Architect/Engineer: For design, supervision, and expert testimony
- Project Manager: For schedule, quality, and cost control
The Most Expensive Mistakes
- Using a simple, vague contract
- Failing to vet the contractor’s record
- Ignoring legal notices or court claims
- Not keeping a 10% holdback
- Not hiring a lawyer early
Final Words: Prevention Is Better Than Cure
Investing in proper legal advice before your project begins will save you far more money and trouble later.
Contact George Lee Law for Construction Law Advice
We help clients with construction and renovation contracts, builder’s lien defense, and all types of building disputes.
Languages: English, Mandarin Chinese, Cantonese
Phone: 604-681-1611
Email: info@gleelaw.com
Website: gleelaw.com
This article is for general information. For legal advice on your construction or renovation project, consult a qualified BC construction lawyer.
