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Fort McMurray residents who lost it all in wildfire face delays, liens and lawsuits in fight with builder

The Pendergasts' home was reduced to six inches of ash after a wildfire tore through Fort McMurray, Alta., in May 2016. What followed was no easier. They say their battle with the developer they hired to rebuild their home left them frustrated by months of delays and on the verge of bankruptcy.

Owner of BristleCone Homes acknowledges there have been delays but denies allegations of dishonesty

Bill and Carrie Pendergast lost their house in the wildfire that hit Fort McMurray, Alta., in 2016. The process of rebuilding has been marked by delays and disputes with the first builder they hired. (Melissa Mancini/CBC)

The developer promised people who'd lost everything in the wildfire that ravaged Fort McMurray, Alta., that it would rebuild their homes so they could "get their lifestyle back."

But some of the folks who signed with BristleCone Homes say they faced a slew of delays, liens and failed inspections while waiting for their homes to be built — and, in two cases, lawsuits after trying to part ways with the company.

Bill and Carrie Pendergast's two-storey home was reduced to six inches of ash in the wildfire that tore through town in May 2016.

The wall of fire was so massive its plumes of smoke swept across North America, causing air pollution to spike as far away as New England.

Nearly 2,400 homes were destroyed.

"It looked like a nuclear bomb had gone off," said Carrie, a 56-year-old energy sector worker.

"The only thing left was metal," said Bill, 55, who also works in the oil industry. "We had a single steel fridge in the garage. Even that was folded down like an accordion."

Carrie Pendergast surveys her property in the aftermath of the wildfire. (Bill Pendergast)

The Pendergasts were among the first to sign with BristleCone Homes in early 2017.

Carrie says she was won over by the company's charismatic owner, Kunal Nagpal, at a trade show in Fort McMurray in November 2016.

"He was our saviour," she said.

Her husband described Nagpal as a "very, very good talker."

"It was like, 'Everybody has lost everything. And I'm your new best friend. I'm going to, you know, look after you.'"

BristleCone Homes was issued a total of 13 building permits, according to the Municipality of Wood Buffalo. CBC News contacted 10 of the homeowners — not one of them was satisfied.

A look at the aftermath of the 2016 wildfire that left a path of destruction in Fort McMurray. (Jason Franson/The Canadian Press)

On LinkedIn, Nagpal is described as an entrepreneur, an investment analyst and a CEO of an investment company.

In an email statement to CBC News, Nagpal said there were many reasons why his clients were unhappy, and he acknowledged that delays were "the biggest reason."

He cited weather, debris-removal issues, a labour shortage and delayed payments from clients and insurance companies as reasons why builds fell behind, leaving clients dissatisfied. 

He also said the clients' expectations were too high.

"We are not saying we were perfect in any way," Nagpal wrote. "There was a steep learning curve for us as well, and these fires were unprecedented for everyone, including the home builders."

The Pendergasts signed a $738,000 contract in March 2017.

There would be months at a time that the house sat and no work was being done.​​​​​- Carrie Pendergast

The money would be paid out by their insurance company at various stages of the build.

The 1,785-square-foot home was to go up on the same lot as their old home.

BristleCone promised to start the project within 30 days of obtaining permits, but shovels didn't break ground until July.

The contract said the house would be delivered by December 2017. The document also said the company doesn't guarantee that timeline should there be any "delays by the purchaser, or delays caused by unfavourable weather, strikes, fires, shortages of material or labour, or acts of God."

The caveat in the contract was at odds with the company's brochures, which promised completed homes in six to eight months. It was also at odds with what Bill said Nagpal had told him.

"I would really like to be home by Christmas," Bill recalled telling Nagpal.

To which he says Nagpal responded: "Christmas? Bill, we're going to have a big party at your house for Thanksgiving."

BristleCone Homes owner Kunal Nagpal says there was a 'steep learning curve' for builders following the Fort McMurray wildfire. (Carissa Tham)
 

That didn't happen. A bank assessment issued on Feb. 9, 2018, determined the house was still only 46 per cent complete.

"There would be months at a time that the house sat and no work was being done," Carrie said.

"It's like all these other houses are popping up and being built and ours is just sitting there."

The Pendergasts say Nagpal told them they weren't to speak with other BristleCone clients or to suppliers and contractors working on their home.

Nagpal denies this but admits he asked clients not to "change the scope of the build by talking to subtrades without [BristleCone's] presence."

The Pendergasts became increasingly concerned because the shell of the structure was exposed to the elements. The foundation had been poured, and a skeleton of wood beams reached up to the second story.

After a rainstorm in July 2018, Bill Pendergast inspected the house.

"The floor was all soaking wet. The insulation in the ceiling was all stripped down and it was all soaking wet. You could see the water stain," he said. "You could actually see water running down the wall."

Watch: Bill Pendergast takes a tour of his partially rebuilt house after a storm

Bill Pendergast takes video of his partially rebuilt home in Fort McMurray in 2018. 0:09

Bill said Nagpal was supposed to provide updated construction schedules. If there were changes, Nagpal was to send a change order form so the Pendergasts could sign it, date it and send it back. 

"I never got any documentation from him," Bill said. 

Nagpal said he provided updates on construction schedules and that "all change orders were done in writing."

The Pendergasts' insurance policy also gave them $45,000 for temporary accommodations while their house was being built.

However, as the months passed and expenses mounted, the Pendergasts were headed toward bankruptcy. They worried they were about to lose everything all over again.

Failed inspections

In another rebuilding neighbourhood a short drive away, Linda Meyers fared better with BristleCone than the Pendergasts, but she still had to hire a lawyer to get the home finished.

"I actually developed an ulcer," she said. "Is it ever gonna get done? Is it gonna get done properly or is it going to fall down around our ears when we finally move into it?"

Linda Meyers and her husband, Verlyn Crick, say their build was riddled with problems, including failing multiple inspections after work was done. (Melissa Mancini/CBC )

Once the project was more than seven months behind, Meyers got her insurance company involved and held back payment until the house was up to code. 

"The inspectors were here like just about every single day going over the work that they were doing and telling them, 'No, this is not code. You have to do it this way in order for it to be code,'" Meyers said.

As the project stalled, Meyers said she started to worry that she'd been sold on a company that wasn't what it seemed.  

She's not the only one.

Multiple people who toured the BristleCone show home in the newly developed Eagleridge neighbourhood in 2016 said Nagpal claimed to have built the house. Municipal records show it was built by another company.  

"The brochures that he had ... they looked beautiful, very professional in that. But I got a sinking feeling that he just took them off a website somewhere," Meyers said.

In fact, a reverse image search showed pictures in BristleCone's brochures were indeed stock images from other home renovation and construction websites dating back as far as 2012, and not from projects completed by the company.  

Nagpal denies that he ever claimed he built the show home used by BristleCone. He acknowledged that the photos used in the brochures were compiled from other sources but insists: "At no point did we tell the clients that all the pictures they are seeing are the ones we had built."

Meyers is happy to now be in her home, but her eyes are drawn to imperfections like the spider web of cracks that spread across the concrete floor in the garage.

There was no more give. We were at the end of the rope. We really didn't know what we were gonna do.​​​​- Carrie Pendergast

In an email, Nagpal said the company couldn't always "provide the level of finish that the clients have in their mind," but it did follow the standards of construction set out by regulatory agencies.

"I know there's other people out there who don't even have half of what we got. They don't even have their houses yet," Meyers said. "At least he hasn't tried to sue us."

Court documents show Nagpal and BristleCone Homes are suing two clients who stopped paying. One of those lawsuits is against the Pendergasts. The other is against a single parent of four children whose house is less than half finished 24 months after she hired the company.

Court filings also reveal something curious: BristleCone charged the Pendergasts $12,500 for "building permit fees." But the municipality waived building fees to help fire victims get back on their feet.

CBC News spoke to two other BristleCone clients who confirmed they had also been charged thousands of dollars in their BristleCone invoices for "building permit fees."

Nagpal said the amount was not for the permit fees but for "architectural plans, engineering plans, survey plans." He denied he was paid for permit costs.

Firefighters battle a wildfire near Santa Rosa, Calif., on Oct. 14, 2017. (Jim Urquhart/Reuters)

In October 2017, as BristleCone clients were becoming frustrated with the slow pace of their builds, one of the most destructive fires in California history was sweeping across Sonoma County. The Tubbs Fire wiped out more than 5,000 buildings.

At a town meeting in Santa Rosa in April 2018, Nagpal introduced himself as a "rebuild specialist, natural disaster homebuilder" and "fire survivor."

But the rules governing construction and who can sell their services in the industry are much more strict in California. And there are also special legal protections for disaster victims.

Records show Nagpal is affiliated with two companies in Santa Rosa: Emerge Rebuild and Sunny Valley Construction.

Both are currently under investigation by the California State Licence Board for "probable violations" of operating without a licence. 

The state decided to publicize its investigations even though the allegations haven't been proven "due to risk of harm."

The regulator is also looking into whether a Santa Rosa fire victim was overcharged for building plans drafted by Emerge.

While violations such as operating without a licence are normally misdemeanours, when they involve disaster victims, those same infractions can be charged instead as felonies.

Nagpal said he was aware of the investigation and said the companies have not done anything that could be considered "offside" with the regulations.

Back in Alberta, the provincial government confirmed it has received consumer complaints about BristleCone. In September, it sent a written warning to the company because it was operating without a prepaid contractor's licence. 

Linda Meyers thinks more needs to be done to protect Canadian disaster victims.

"There should be somebody there that can actually go back to the builder and say, 'OK, you have to do this and this or you're out of here. Period.'"

A stroke of luck

With their rebuild mired in delays, Bill and Carrie Pendergast found themselves on the verge of bankruptcy in February 2018.

"There was no more give. We were at the end of the rope. We really didn't know what we were gonna do," Carrie said.

But then, in an incredible stroke of luck, they won a million dollars in the lottery.

Months later, the newly minted millionaires hired a lawyer to fire BristleCone.

The company then sued them for more than $300,000, alleging the work it had done had increased the value of the property. It also alleges the couple held back payments.

The Pendergasts say their lottery win not only saved them from financial ruin, it emboldened them to speak out and warn others about doing business with Nagpal.

About the Author

Katie Nicholson

The National

Katie Nicholson is the senior enterprise reporter with The National based in Toronto.

With files from Melissa Mancini