Sub-contractor abusing law meant to protect trades, says homeowner
B.C. excavation company staked legal claim to home after owner disputed bill
A homeowner from North Vancouver has accused a building subcontractor who worked on her home of abusing a provincial law intended to protect building trades workers from not getting paid.
Soraya Motameni said an excavation company hired by her contractor to help build her new home charged triple what the job was worth, then staked a legal claim on her house when she refused to pay the entire bill.
"When I saw the bill I was shocked," said Motameni. "You are stuck. You are handcuffed. That is exactly how you feel."
Motameni's troubles started after she hired a general contractor to build her dream home and the work began in January 2006. The contractor hired All Star Excavating and Demolition of Burnaby to do the excavation work. Motameni said she had no dealings with that company.
Records show the excavators dug the hole in the wrong place and had to fix numerous problems associated with the project, including a potential cave-in of the house next door. They did not complete the excavation.
Numerous mistakes made, says homeowner
"There were so many mistakes made," said Motameni. "I do not have to pay for their mistakes."
Motameni said she was unhappy with the general contractor, Fred Momen, because she felt he was too busy to supervise the project adequately. Momen confirmed he stopped work on the building project during the excavation, but then declined to be interviewed by CBC.
All Star Excavating billed Motameni for $60,000. She subsequently acquired three estimates, from contractors and construction consultants, which said the work All Star did should have cost between $19,000 and $26,000.
"They say that this bill is overboard, it's way beyond what it should have cost me," said Motameni. "I had to hire other people to clean up their mess and to fix it."
She said she paid All Star $20,000 right away, which she believed was a fair price.
Binder Sekhon, owner of All Star Excavating, said all the work that was done was authorized by Motameni's original contractor and the larger bill was justified.
"When people have to pay money, some people [are then] saying it's too much," said Sekhon. He said he felt he had no choice but to register a builder's lien against Motameni's home.
"What we can do? We have to make my money," said Sekhon.
Legislation allowing contractors to register property liens has been in place in British Columbia and other provinces for more than a century. According to B.C. government websites, the Builder's Lien Act is intended to help contractors and sub-contractors who fall victim to shoddy business practices. It is often used by subcontractors who aren't paid by contractors who hire them.
By registering a lien, building tradesmen essentially stake a claim to a property. The owner can't sell the property or get bank financing until the lien is removed. Some of the cases must to go to court to be resolved.
Law allows sale of home to pay bills
If the homeowner ultimately loses in court, the judge can then order the house sold, and the proceeds applied to pay the contractor and often their lawyer's bill as well.
In order to avoid this, the law specifies that homeowners must hold back 10 per cent of whatever monies they owe contractors, to cover any unpaid bills at the end of the project. Motameni did not do that with her contractor because the arrangement was terminated early on.
Court records show All Star Excavation has registered at least seven liens on customers' properties since July of 2006.
"We have no choice," said Sekhon. "If somebody not paying you money, what we can do? We are hard-working people."
Ranjit Ahluwalia of Vancouver is another All Star customer who has a lien against his home. Ahluwalia also claimed the company overcharged him — $20,000 over their agreed price. When he refused to pay the full amount, he said, All Star registered the lien.
"I tried many times to settle with them," Ahluwalia said. "They refused."
Sekhon said his five-year-old company does 20 to 25 excavation jobs each month and chasing customers who refuse to pay is a waste of his time.
"We are losing my time. We are losing my jobs," said Sekhon.
"You have to pay lawyers to fix these problems afterwards and it is not a cheap system to get involved with," said Scott Lamb, a Vancouver lawyer who specializes in construction law. "Unfortunately, I see a lot more of this than I'd like to."
'Problems set in good times': lawyer
Lamb said the best way for homeowners to protect themselves is to hire a lawyer to write up contracts at the outset, instead of having to pay much more to get a lien removed later. He said homeowners should be particularly wary in hot construction markets, like B.C.'s in recent years, when some contractors worry less about pleasing customers and charge a premium, sometimes too much, for their services.
"A lot of the bad problems are set in the good times," said Lamb. "There is an issue and a concern now about people filing invalid or improper liens."
He said the Builder's Lien Act allows judges to penalize contractors who use the law to pressure homeowners to pay more than they are entitled to, but judicial action of that type is rare.
"We should probably be more aggressive on this," said Lamb. "I'd like to see people more aggressive and there are clients out there that would like to see this happen who are owners. But it takes the right case before the right judge to get the right result."
Motameni said she intends to fight to the bitter end. She borrowed $40,000 — the balance of All Star's bill — and put it in trust, so she could get the lien cleared while the court battle continues. It has been two years and her case has yet to be heard by a judge.
"It's a money-making business," said Motameni. "If you can charge 20,000 more here, 40,000 more there, you make money. And if the law and the judges and the justice system do not protect people like me, this can go on forever."
"I think the law should stop anybody who wasn't hired by myself from putting a lien on my house."