Victoria Times Colonist April 23, 2006
Drip, drip, drip: a 4-year struggle.
Dark side of a dream home: Saltspring couple battles for four years with builder and warranty provider
Joanne Hatherly, Times Colonist
It was a clear, dry day when Dr. Ken Sutherland noticed a leak in the roof of his new Saltspring Island home. "It would be a drip, and a minute later, there would be another drip," recalled Sutherland, glancing up at the vaulted ceiling of the post-and-beam home he shares with wife Ann Donahue.
It was October 2001. The house was three months old.
Sutherland couldn't foresee that little drip would draw him into a four-year fight with his builder and new-home warranty provider, a battle that would leave him disillusioned with B.C.'s Homeowner Protection Act.
"Is the warranty system working? I would emphatically say no," said Sutherland, whose house underwent three engineering reports, two four-month repair periods in the rainy season -- which exposed the home to more water damage -- and three roofs.
During Sutherland's lengthy warranty claim process, he appealed to the province's Homeowner Protection Office for action. He learned then that the protection office, a Crown corporation, does not regulate warranty companies or directly monitor the performance of residential builders.
Sutherland, a physician, and Donahue, a teacher, had dreamed of retiring from their busy careers in Ottawa to a more laid-back lifestyle on Saltspring. They purchased a lot with views over a meadow and a protected harbour.
After a diligent search, they hired a local contractor who was licensed and insured in accordance with the B.C. Homeowner Protection Act.
The contractor built a timber-frame chalet on the lot, and Sutherland and Donahue took possession in August 2001.
When Sutherland detected the leak several months later, he called the contractor. Not satisfied with the contractor's assessment of the problem, Sutherland filed a formal notice of claim with the warranty company, London Guarantee, on Feb. 28, 2002, well within the five-year claim period for building-envelope defects.
Initially, it was thought the leak was caused by a gap between a skylight and the roof, and measures were taken to seal it.
But more leaks appeared, combined with what Sutherland describes as "bizarre symptoms" in his house.
On cold days, the frost footprint on his roof left a distinct grid, suggesting warm air from the interior was seeping through to the exterior. When it snowed, some areas of the roof did not accumulate snow, with black triangles forming where the snow had melted on contact.
Fearing "serious systemic ailments" involving the building envelope, and lacking confidence in the warranty company's technical representative, the couple hired a private engineering firm to assess the condition of their house.
The report filed by Aquatek Building Envelope Consultants and Kondra Associates Engineering Inc., in August 2002, less than a year after the couple had moved into the home, confirmed widespread building-envelope failure.
The report cited what appeared to be "significant violations" of the B.C. Building Code in the house. "The roof assembly ... is performing unsatisfactorily and requires immediate and extensive repair," it said.
The consultants pointed to gaps in thermal insulation, a flawed wall-roof interface, breaches in the vapour barrier and other defects they said created an environment in which warm air in the home penetrated the house's structure, where it met cold air from the exterior. Condensation formed and seeped through to the skylights, producing the oddball leak that occurred only in dry, cold weather.
"It never leaked when it rained," Sutherland said.
When he saw the engineering report, he expected the claim process to move forward without delay.
"I thought that was it. I thought when the insurance company saw the engineer's report, they would understand the problem and they would fix it."
Instead, his problems were only beginning. The warranty company ostensibly hired another engineering firm to investigate the first engineering firm's findings. That investigation, however, did not take place until July 2003, while the roof continued to leak.
While the second engineering report confirmed the moisture problems, Sutherland describes its solution as a "jury-rigged methodology."
By then Sutherland had lost confidence in his builder and asked the insurance company to contract another builder to make the repairs. That request was denied.
Sutherland began making calls to B.C.'s regulatory bodies, including the Homeowner Protection Office. The protection office offered no assistance.
"I said, 'You're the homeowner protection association. How do you protect people?'" recalled Sutherland. He was advised that builders could hold a licence as long as they could obtain new-home warranty coverage.
Bob Maling, the protection office's chief operating officer, confirmed that warranty companies, not the protection office, screen builder credentials.
He said warranty companies are under no obligation to provide information on any builder's claims history, nor does the protection office ever request such information. If a builder can obtain new-home warranty coverage, the protection office can process the builder's licence application in as little as four days.
"[The warranty company has] in all likelihood determined that the individual has competency, is financially sound and has experience in the business," Maling said.
He also confirmed that the Homeowner Protection Office has no mandate to monitor the performance of the warranty companies. Maling said the Financial Institutions Commission regulates warranty companies and the Insurance Council of B.C. regulates brokers. "Those are the two provincial watchdogs," he said.
When presented with this information in a subsequent interview, Sutherland asked whether the Homeowner Protection Office does anything at all to protect homeowners.
Four years and three roofs later -- his second roof received a failing grade from a Saltspring building inspector -- Sutherland's moisture problems have been remedied, but he is still negotiating with his insurance company about water damage to his walls.
The insurance company has covered Sutherland's private engineering fees, which came to $1,600, but Sutherland is still out legal fees to the tune of $3,000, as well as $5,500 he paid for a metal roof upgrade when his roof was re-clad for the second time.
Laura Bradshaw is the Hartford, Conn.-based director of corporate communications for St. Paul Guarantee Insurance Co., the company that assumed the policy from the original home-warranty provider, London Guarantee. She said the company's response to the situation "was as per our usual practice. As always, we carefully investigated the facts and circumstances surrounding the loss."
Bradshaw said, "While conflicting professional and regulatory opinion, weather conditions and availability of labour resulted in some delays to the reparation process, we were not willing, at any point, to make a decision based upon incomplete or conflicting expert opinion."
"That's just a bunch of generalized gobbledeegook," said Sutherland.
"That means nothing. What she said doesn't really address the fact that I ended up with three roofs on my house over a period of 4 1/2 years. In my opinion, what she said is a carefully prepared statement that embraces no factual information whatsoever. If they had addressed the problem properly, I would have ended up with a new roof that worked."
Sutherland's builder is as dissatisfied with the warranty program as Sutherland is.
The builder said the roof-panel technology used in Sutherland and Donahue's home was defective, but the Homeowner Protection Office holds only him accountable for the defects, while the panel manufacturer and the supplier who trained his staff were not deemed responsible.
"I built custom luxury homes for 35 years and now they've put me out of business," the builder said.
In 2004, St. Paul refused to renew the builder's warranty coverage, without which he cannot obtain a residential builder licence.
"All guns point at the contractor," he said. "I'm willing to step up to the plate and accept the responsibility that's mine, but what about the others who were involved? Are you going to be calling them?"
He pointed to the home's architect, the engineers, the manufacturer of panels and the supplier who trained his staff in the installation. "No one is going to go after them."
The builder said he has never had a customer complaint he couldn't resolve "by sitting down at the kitchen table."
"This system just added a layer of bureaucracy to it; it's just another layer of bureaucracy," he said. "It's all in the hands of my lawyer now."
He said that although St. Paul will not renew his coverage, he does have the option of obtaining coverage from any of the three other warranty companies.
Sutherland said he ended up hiring a lawyer to move his warranty claim forward. Finally, in late 2005, St. Paul Guarantee contracted to have the couple's roof and insulating panels stripped down to the ceiling planks and replaced.
Although his claim was ultimately successful, Sutherland said that if he had not had to spend so much time fighting the warranty company, he would have simply hired a lawyer and sued the builder.
"As far as I'm concerned, all the time I spent on this warranty claim, it was a waste," he said. "It just added another layer of activity that in the end didn't do anything."
The experience led Sutherland to come out of retirement and take up a medical post in Victoria.
"I couldn't sit in this house any more. It was driving me nuts."
© Times Colonist (Victoria) 2006