Builder relicensed despite unfinished homes

Several homeowners from Duncan, B.C., are upset over how a local developer was re-licensed by the provincial government, despite several complaints filed against him.

Dwayne Peleshaty blames recession for incomplete contracts and unpaid workers

Developer Dwayne Peleshaty told CBC News he was hit hard by the recession. ((CBC))

Several homeowners from Duncan, B.C., are upset over how a local developer was relicensed by the provincial government, despite several complaints filed against him. 

"This man's licence was renewed after all of our warnings, and then he continued to have the same business ethics," said Taras Diduck, who hired builder Dwayne Peleshaty to build his home in 2008.

Diduck and others complained to the provincial Homeowner's Protection Office (HPO) that, after Peleshaty was paid, he left their homes unfinished and didn't pay sub-trades he had hired. The HPO licenses builders in B.C., including Peleshaty.

"He basically kept asking for more money and not paying his subcontractors," said Diduck. "Then, we just basically stopped paying him — and had to negotiate with the subcontractors to complete our house."

Retirement dream turned 'nightmare'

"It really took the dream of a nice retirement here away and turned it into a nightmare," said Diduck.

Peleshaty told CBC News he builds homes "on spec" — using money from sales to finance additional projects. He admitted some work has not been completed and that he had not paid some trades people. He blamed that on the recession.

"The whole issue was cash flow," said Peleshaty. "You know, I got caught up in the recession. Too much product, not enough cash flow. Not enough cash backing. It has been tough."

Lindsay Nevison, who with her husband moved into their home in December, told CBC News, "I think our money went into finishing the next-door neighbours' house."

Lindsay Nevison cooks all her food on the barbecue because she said Peleshaty failed to have the gas system installed in her home. ((CBC))

She showed how her cupboards have no shelves, her shower has no door and she cooks on the barbecue — because she said Peleshaty failed to have the gas system installed.

"We love barbequing — but on a more limited basis," said Nevison.

In addition to the unfinished work, Nevison said her home has deficiencies such as cracked tiles, which Peleshaty has not addressed.

"It's the damage that repairs are going to cause that's going to be most costly," she said.

Licence renewed after investigation

The HPO renewed Peleshaty's licence for his company, DR Construction, in the fall, after Diduck filed his complaint. He also provided names of several other affected homeowners.

An HPO manager wrote back at the time, indicating "appropriate and available action" would be taken after an "investigation."

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"None of the people whose names were given were contacted for any investigation," said Diduck. "It wasn't an investigation at all in my opinion."

Austin Cooper also filed a complaint with the HPO at the time. He said the municipality slapped a stop-work order on his half-built home, because an inspector found Peleshaty was not building it up to code.

"The following weekend, I arrived from the mainland to find Mr. Peleshaty had abandoned all work on the property and removed his tools and supplies," Cooper wrote in his August complaint.

Cooper told the HPO completing his home could cost him an extra $100,000.

Homeowner Taras Diduck stands in front of the house next door, which developer Dwayne Peleshaty left half finished. ((CBC))

"To further rub my nose in the dirt … I learned that a lien was put on my home, because Mr. Peleshaty had not been paying his suppliers with the holdback money I was forwarding to him."

Diduck and Nevison also had liens put on their property by trades people who said they weren't paid by Peleshaty. When a lien is registered, the homeowner effectively is liable for that debt until the lien holder is paid.

"We have liens against our house for items that don't even work," said Nevison.

Contractor was selling condos

Until the CBC News story aired on Tuesday, Peleshaty was working in Victoria, an hour's drive from Duncan, selling condominium units currently under construction.

"I've had to fire-sell some homes. My cash flow dried up … but I'm still here," he said.

However, Scott Baker, a co-owner of Fairfield Rise, said Peleshaty was dropped from the project when customers began calling the company about their concerns.

"We've completely let him go," said Baker.

Meanwhile, Diduck is trying to sell his home in Duncan, which he said cost him several thousand dollars to get finished, over and above the amount he held back from Peleshaty on the purchase price.

Next door to his home is a half-constructed, unsold house, which Peleshaty admitted he abandoned.

"I don't want other people to be hurt like we were," said Diduck. "The system that is in place now just simply tells me that more and more people will be hurt."

The HPO confirmed to CBC News in an email it had four initial complaints about Peleshaty on file, and that "several additional complaints have recently been received, and we will be looking into the matter further."

Peleshaty was selling condominiums under construction at this location in Victoria, but a co-owner of the project said he is no longer involved. ((CBC))

Nevison said she tried to do her due diligence before she hired Peleshaty by checking his status on the HPO website. Like any licensed builder, the website lists him "in good standing," with no indication there are complaints.

"It's insulting to homeowners that they would put 'in good standing,'" said Nevison. "It's a slap in the face. They know the problems, and yet they can still put that on there?"

The HPO told Nevison in writing that it couldn't have restricted Peleshaty's licence, because although lawsuits have been filed, there are no judgments against him.

"If there were such rulings, I might be able to apply a condition or restriction to the licence, however, I found no such rulings," wrote an HPO manager.

"We're already fixing stuff out of our own pocket. We don't have the money to go and sue somebody," said Nevison.

"What's the point of their investigation if you have to take it to court anyway?" asked Diduck. "It seems the onus is always back to the homeowner."

Minister promises 'more discipline'

Rich Coleman, the minister responsible for the HPO, told CBC News he agrees there are problems with the system that should be fixed.

"After this has come up, I've asked our folks to look at it, because I am concerned about it," said Coleman.

"I think we need more discipline, and I think we need to have some standards of service probably that we need to improve."

Builders cannot be licensed in B.C. unless they have home warranty insurance. Coleman indicated the province relies heavily on the insurance companies to make sure those builders are qualified.

B.C. Housing Minister Rich Coleman says the builder licensing system in B.C. needs "more discipline." ((CBC))

The problem, he said, is insurers often continue to cover builders after they have claims filed against them.

"Warranty providers have to decide that they are going to step up to the plate with their clients who are buying the insurance from them and say, 'You know what, I've got too many claims [against] you, and either your premiums are going up or you are going to improve,'" said Coleman.

He indicated the HPO may soon be allowed to put more information about builder complaints on its website, and it may be given more latitude over licences.

"I don't have a problem with actually putting more discipline into the HPO and the licensing structure in B.C.," said Coleman.

Diduck said he is glad to hear the problem now has the minister's attention.

"I've tried to raise as many red flags as possible, and it just seems like I'm ignored," he said.