What to Do If a Contractor Doesn’t Finish Their Job in Ontario

When Renovations Go Wrong, the Law Has Your Back

Hiring a contractor for home renovations or construction work can be a major investment, and an even bigger source of stress if the job is left unfinished. Fortunately, Ontario law provides clear legal remedies for homeowners facing this situation. This article outlines your rights, available legal options, and a relevant case example to help guide your next steps.

Case Study: M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd. (1999)

Before taking any further steps, let’s review a case. This case illustrates how Ontario courts approach serious breaches of contract in the construction industry.

• Facts
  M.J.B. Enterprises engaged Defence Construction for a building project. The contractor failed to meet deadlines and left the work unfinished.
• Legal Issue
  M.J.B. sued for breach of contract, claiming damages arising from project delays and the need to hire a replacement contractor.
• Outcome
  The court ruled in favour of M.J.B., awarding compensation for losses incurred, including the cost of engaging a new contractor.
• Key Takeaway
  Ontario courts enforce construction agreements and award damages where a contractor fails to deliver on contractual obligations.

Steps to Take if a Contractor Fails to Complete the Work

When facing an incomplete renovation or construction project, the following steps are recommended:

1. Review Your Contract

• Identify timelines, milestones, and any clauses related to non-completion or penalties.
• A well-drafted contract strengthens your position significantly in any dispute.

2. Communicate Directly with the Contractor

• Make a good-faith attempt to resolve the issue through direct conversation or written correspondence.
• Document all communications, including delays and uncompleted tasks.

3. Send a Formal Demand Letter

• If informal communication fails, issue a written demand for completion by a specific deadline.
• Clearly state your intent to pursue legal remedies if the contractor does not comply.

4. Initiate Legal Action for Breach of Contract

• When the contractor remains non-responsive, you may file a claim for breach of contract in Small Claims Court or the Superior Court of Justice. It is best to consult a real estate lawyer before taking any actions.
• Compensation may cover the cost of hiring a new contractor and any damages caused by delay or inconvenience.

5. Consider Alternative Dispute Resolution (ADR)

• Mediation or arbitration may be preferable to litigation in terms of time and cost.
• If your contract contains an ADR clause, this may be a required first step before initiating court proceedings.

Legal Remedies and Types of Damages Available

Homeowners may be eligible for the following remedies:

• Compensatory Damages: Covering the cost of completing or repairing the work.
• Consequential Damages: For financial losses resulting from the delay or disruption.
• Contractual Penalties: If stipulated in the contract, penalties for late or incomplete work may be enforceable.

Thorough documentation, including the original contract, photos, invoices, and all correspondence, will support your claim.

Best Practices to Prevent Future Contractor Disputes

Proactive measures can help prevent contractor disputes before they begin:

• Use a Detailed Written Contract: Include start and end dates, a clear scope of work, payment schedules, and dispute resolution procedures.
• Adopt Progress-Based Payments: Structure payments around completed milestones rather than arbitrary dates.
• Verify Contractor Credentials: Check licenses, insurance, references, and prior work.
• Maintain Regular Communication: Schedule site visits, track progress, and flag potential issues early.

Conclusion

When a contractor fails to complete their work, the consequences can be both frustrating and costly. However, Ontario law offers effective legal remedies to hold contractors accountable. The decision in M.J.B. Enterprises Ltd. v. Defence Construction serves as a valuable precedent, reaffirming the importance of strong contracts and timely legal action.

If you are in the process of writing a contract, experiencing issues with a contractor, or need assistance enforcing your legal rights, we encourage you to consult a qualified lawyer. You can also view our in-depth video on this topic for additional guidance.