Ontario couple feels 'ripped off' after $42K added to their prefab home's price
‘We were very shocked and disappointed by what we heard,’ says Jarvis resident Cathy Hilton
A Jarvis, Ont., couple who tore down their home to make way for a prefabricated one wants to warn aspiring homebuyers about builders who raise the price even after contracts with agreed-to prices are signed.
Eric, 63, and Cathy Hilton, 61, said they felt the sting of house prices growing unexpectedly because of developers charging new-home owners more than they originally anticipated.
According to the couple, in March 2021, they made an initial deposit of $5,000 and signed a purchase agreement with Comfort Homes in Woodstock, Ont., to secure their "retirement home" at a cost of $209,728.
They say mere weeks before the date they were promised their prefabricated house would be delivered, the company told them they had to pay $42,000 more.
"We were very shocked and disappointed by what we heard," Cathy told CBC News.
"We just thought, 'This can't be happening. Why are they doing this?'"
Ontario vows to stop developer changes
Comfort Homes has not responded to multiple CBC requests for comment. The purchase agreement with the Hiltons says "any changes or modifications" to the price are at the discretion of the company.
But the Hiltons' case comes at a time when other potential homeowners have complained about preconstruction contracts that face being changed, due to what developers say are problematic delays and rising costs.
In the wake of the consumer complaints, the province is vowing to stop developers from cancelling or jacking up the price of preconstruction sales agreements.
The proposed changes, which have a target date of July 1, would require developers to disclose to the Home Construction Regulatory Authority when sales contracts are cancelled without fault to the buyer. The information would be made available to the public.
As for the Hiltons, they want to warn people of the possibility of what Cathy describes as "a very emotional roller-coaster."
My son very graciously told my wife, who's very emotional about this whole thing, that, 'Don't worry, Mom, you're going to get your house. We're going to do something for you.'- Eric Hilton, Jarvis, Ont., resident
Eric said he was "stunned" when the company told them they had to pay more money.
"If this was an estimate, that would be different … but this thing that they gave us was down to the penny. This was not an estimate. This was our price."
The couple said Comfort Homes started asking for more money three months after they paid the initial deposit. They said they were told by the company that they needed to raise the price by $7,627.50 because of increasing costs brought on by the COVID-19 pandemic. The Hiltons say they "reluctantly" agreed to the payment.
The couple was told their new home would be delivered to them on April 25.
"In February, we went in and started to demolish our house … we had already scheduled our foundation pour for April 5," Eric said.
"One of the things we were told is that the foundation needs to be cured for a few weeks before they put the house on."
But the couple was in for a major disappointment after demolishing their house.
"I contacted Comfort Homes in March and … they told us, you know, the house isn't going to be ready for another four to six weeks," Eric said.
"They told us that because of the tornadoes that ripped through Kentucky, that the builders were supplying temporary housing … but in addition to that, we're going to need $40,000-plus in order for you to get your house."
Tried to negotiate
The couple said they tried to negotiate with Comfort Homes.
"I emailed them back and said, 'Just stick to the contract and get us the house for the price quoted,'" Eric said.
The couple said the company told them they could either pay the extra money or get their deposit back. The Hiltons decided to take back their money. Their main priority now, they said, is having a place to live.
"You know, if they had let us know, even in January, that there was going to be a delay or whatever, we probably wouldn't have torn down our house, so we were kind of in between a rock and a hard place," Eric said.
Tips for homebuyers
Li Cheng, a real estate lawyer in Hamilton, is not familiar with the Hilton case.
But the lawyer said that in general, buyers who don't want surprises when engaging with contractors to build new homes should use the following tips:
- Have a written agreement complete with scope of work, delivery timelines and payment timelines based on the deliverables.
- Review the agreement to understand the contractor's obligations versus the owner's obligations. The agreement should be clear not only on "what is to be delivered, when are they to be delivered," but also "what happens if they are not delivered according to what's written in this agreement."
- Ensure the contractor has the necessary liability, vehicle, and Workplace Safety and Insurance Board insurance coverage.
- Ensure the contractor has the necessary licences and is qualified to obtain any permits needed for the proposed work.
The Hiltons have been staying with their children and have made new plans to build a house.
"My son very graciously told my wife, who's very emotional about this whole thing, that, 'Don't worry, Mom, you're going to get your house. We're going to do something for you.' And so my son has decided that he and I are going to build the house ourselves," Eric said.
The Hiltons now anticipate being in their new home in the fall.
"We are aiming for being in before Christmas," Eric said. "We're going to get our house and we're going to be happy with it, and we're going to be OK."
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