A local home builder is being investigated by Ontario's new home building regulator after an Ottawa couple complained that work on their home has ground to a halt, CBC News has learned.

Tarion, which regulates Ontario's new home building industry, is looking into a complaint filed by Stephanie and Basel Maghnam alleging that LivingStone Development, run by Michael Akinniyi, did not pay workers and did not register the home for warranty.

Tarion's probe comes after the Maghnams paid more than $135,000 to start work on a custom home in Kanata, only to see construction grind to a halt.

The couple said they signed a building contract with LivingStone Development about three months ago, after deciding to build a new, bigger, more open-concept home on two acres of land they own in Kanata North.

Construction stopped about three weeks ago

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Stephanie Maghnam, left, and her husband Basel Maghnam, say work on their custom home in Kanata North stopped about three weeks ago after they paid the builder $136,000. (CBC)

Basel Maghnam and his wife have two children, and may plan to have more. The couple said they also planned to take in Basel Maghnam's elderly parents, one of whom was recently diagnosed with cancer.

The Maghnams made sure Akinniyi is a registered builder with Tarion, and looked at semi-detached homes he's building in Stittsville.

But after construction work on the home started, Basel Maghnam said they started getting troubling phone calls from the trades people.

"The actual trades that the builder … has contracted, they somehow got a hold of my telephone number, and they started calling us and telling us that we have not been paid for the past month, some other trades have not been paid for two months, and some other trades were not paid for about three weeks," he said.

"They've been promised to have payment by cheque, but unfortunately there were zero dollars paid to some of these trades."

And then, about three weeks ago, the couple said work on the home stopped.

Couple says tradesmen may file construction liens

Maghnam said some of the trades people have threatened to put construction liens on the home to make sure they're paid.

The couple then discovered that the builder failed to enrol their home with Tarion, a legal requirement to qualify for a new home warranty. It's supposed to be done well before construction begins.

They said they had no reason to suspect anything was wrong ahead of time because the builder gave them a signed Tarion enrolment document in August.

"We're extremely destroyed from inside. Physically, mentally. We're not sure what to do. It's a big problem. We're not sure if we're going to be able to achieve this dream home that we wanted to build. Especially now that we've sold our current house and the new buyers are planning to move in sometime beginning of February. … We might be forced into maybe renting a place, I'm not sure for how long, until this issue gets resolved," Basel Maghnam said.

Builder says soil problems to blame for work stopping

Approached at his home by the CBC's Simon Gardner last week, Akinniyi said work stopped because of soil problems at the site.

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Michael Akinniyi runs LivingStone Development, which is now under investigation by the provincial regulator for the new home building industry. (CBC)

"The soil has a lot of issues and it was backfill, and the soil that is backfill, you can't build homes on it," he said. "You've got to take all that soil out."

The Maghnams contend that the soil tests were fine before the city issued a building permit.

Akinniyi also said he sent Tarion the necessary information to register the home, and that he planned to give $90,000 back to the Maghnams by last Friday.

"He should have his money by Friday, and that's the end of that," Akinniyi said.

The couple said the money didn't come.

Akinniyi did not dispute that some trades have not been paid, but said he did give the excavation company $10,000.

On the same day CBC talked to Akinniyi, Tarion said he called to register his properties.

Meanwhile, partial first-floor framing and an unfinished foundation are exposed to the elements at the worksite, and the Maghnams fear they'll have to tear some of the work down and start again if it's left unprotected when winter sets in.

The LivingStone Development website was taken down last Friday.