Limitations Act revamped.

• Author: Wareing, Andrew
• Position: Construction: special report

Imagine a sunny beach, where someone is soaking up the rays, enjoying a relaxing and well-earned retirement from years in the construction business.

Suddenly, someone approaches them with a piece of paper and that retirement is shaken to pieces. They have been served papers for a lawsuit on a building they constructed almost 30 years ago.

Sound impossible? Not at all, says Council of Ontario Construction Associations (COCA) administration manager Stew Ferguson. These types of lawsuits stem from the Ontario Limitations Act.

"There were some pretty frivolous actions being taken," says Ron Martin, executive director of the Sudbury Construction Association. "The threat was always there that a lawsuit could come out of a construction and sometimes the only company that is still in business from when that building was constructed is a painting company."

Denis Alarie, president of Leo Alarie and Sons in Timmins says another problem involved owners taking advantage of a problem that starts out small, but is allowed to grow.

"Say you get a problem with seepage, and you get rot and mould setting in," Alarie says. "The onus is on the owner to do something once they notice a problem, but they would sometimes sit on their hands and let the problem develop, thinking they're going to go after the contractor."

Construction companies were also facing legal action for design faults that had nothing to do with the work done by the construction contractor, says Alarie.

"As it currently stands, it's infinity plus six years," says Ferguson of the liability construction companies have to face. "In other words, contractors and builders are liable for any natural decay or damage (in a building) forever. You can be retired and on a beach in Florida and, if a building you constructed 30 years ago suddenly develops a problem, you can be sued. So we're changing that ASAP."

Ferguson says companies were being held liable for simple wear and tear.

"Unfortunately, that issue of wear and tear had been mostly ignored (by the construction industry)," he says. "Most companies don't carry insurance for that long a period of time; certainly not if they want to stay in business. Premiums start to get a little steep after a while, especially at this juncture with the status of the insurance industry."

He says the COCA has been lobbying for 25 years to have changes to the Ontario Limitations Act limiting the amount of time that a construction company can be held liable. They have...