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Liens piling up as ReidBuilt Homes struggles to pay contractors

Click to play video 'Liens piling up against houses built by ReidBuilt Homes' Liens piling up against houses built by ReidBuilt Homes
WATCH ABOVE: ReidBuilt Homes is a household name in Edmonton but the company's office and showhomes are currently locked up and a contractor who works with the company tells Global News he hasn't been paid in months. Sarah Kraus explains.

Numerous contractors and homeowners that opted to work with Edmonton-area builder ReidBuilt Homes are finding themselves in a tough spot financially, with liens being placed against houses in and around Edmonton.

Richard and Eileen Sherburne moved into their new ReidBuilt home just over a month ago, on Sept. 15.

They were enjoying their new house when all of a sudden, they started finding pink lien letters in their mailbox.

“We opened that and said, ‘What?’ And then a couple of days later, four more came and we contacted a lawyer,” Richard said.

So far, 11 liens have been placed against their home, totalling more than $50,000.

WATCH: Both the Alberta government and the provincial new home warranty program are stepping in after a developer ran into financial difficulties. ReidBuilt Homes has operations in Calgary and Edmonton. Consumers and contractors say they have been impacted. Gary Bobrovitz has more.

Click to play video 'Help for Albertans affected by ReidBuilt Homes’ financial difficulties' Help for Albertans affected by ReidBuilt Homes’ financial difficulties
Help for Albertans affected by ReidBuilt Homes’ financial difficulties

Last week, they went to the ReidBuilt Homes office in west Edmonton to try and speak to someone about their mounting concerns.

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“We were outside and saw a lot of people standing out there and the doors were locked. So that’s when we realized there was something else going on,” Eileen explained.

Global News tried to speak to ReidBuilt on multiple occasions on Tuesday. The company’s office and Spruce Grove showhome were closed and locked up.

Multiple phone calls went unreturned.

“They obviously have been having trouble longer than we know,” Richard said.

The Sherburnes estimate about half of the 20 homes or lots in their neighbourhood are ReidBuilt properties.

One day, a neighbouring home awaiting finishing touches on the roof had its shingles taken away by a contractor.

“There are people who are suffering, and it’s not just the people who put deposits down, but the guys who did the work. The guys who put in the cabinets and the floors,” Richard explained.

The Sherburnes were downsizing and paid for their home in cash.

“Where did it go? That’s what I’d like to know,” Eileen said.

The retired couple said they hold no ill will towards the contractors for filing the liens. They feel they did good work in their home.

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“I don’t think they should be liable for that money either. I think they should get paid,” Richard said.

Recently, contractor Kevin Labbe filed multiple liens against properties he worked on in the last 45 days. He said it’s something he has never done before in 17 years in business.

“I’m just doing what I feel I have to at this point, to recover some of my losses,” Labbe said.

“From the time you complete the job, you have 45 days to put a lien if you haven’t been paid, or feel you won’t be paid for it. It’s basically all you have as a contractor to protect yourself from not being paid.”

He said the problems started in July.

“The day we were supposed to receive our checks, we received an email saying saying that they were a little behind, experiencing a bottleneck in their accounts payable. They were just asking us to be patient and loyal.”

Labbe said he took ReidBuilt at its word and kept going, helping to build about 20 homes since then.

“After 10 years of working with Reid Built, having no issues getting paid and enjoying myself working with them, I continued to work, assuming I would eventually get paid. Eventually, weeks turned into months.”

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On Wednesday, the Minister of Service Alberta issued a statement to Global News in response to the ReidBuilt Homes developments.

“We empathize with those caught in a difficult situation with this builder,” Stephanie McLean said in an email. “I urge every homeowner who’s been impacted to call our consumer protection line at 1-877-427-4088 so we can look into their situation.

“We look into every case and investigate. For example, if this builder recently sold a home knowing they were going bankrupt, they may have violated our consumer protection laws.”

The government added that staff from the Ministry of Municipal Affairs was working with home warranty providers to ensure warranty commitments from ReidBuilt Homes remain in place for Albertans who have taken possession of their homes.

Labbe says he is out tens of thousands of dollars right now. It’s draining his savings.

“In essence, I worked for free for the last three months and haven’t had a cheque in three months.”

Global News obtained an email sent to contractors on Oct. 6, In it, Reidbuilt Homes blames “difficult economic conditions in Alberta” for putting a strain on the company’s finances. It acknowledges unpaid invoices and says, “unfortunately, the company does not currently have the funding to repay these outstanding liabilities.”

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Labbe said now, contractors are talking to one another about where to go from here.

“First, it was a sense of disbelief, that this could happen to ReidBuilt Homes, who was such a great builder to work for, for all these years. Then it was a sense of denial. Now it’s a sense of reality and we have to come to grips with the fact that we lost the builder we’ve worked with for all these years, and we’re out a lot of money that we worked for.”

The Alberta government said anybody impacted by the ReidBuilt Homes developments should contact their lawyers and banks immediately.

“It’s common for lawyers that help with the purchase to hold back a portion of the home’s price on behalf of the homeowner to protect them against liens like these,” McLean said.

The government suggests anybody impacted by the liens should do the following:

· Call Alberta’s consumer protection line at 1-877-427-4088 for your case to be investigated
· Contact legal counsel, preferably someone with experience in construction and bankruptcy. Liens may be filed against your property by subcontractors in excess of the holdback. A lawyer will know how to have liens discharged. For more information, click here
· Call your bank to see if they can help and do what they can to protect your credit rating
· Contact the Superintendent of Bankruptcies to find out if there is a trustee for your builder’s case
· Hire a Home Inspector to do a walk through so they can tell you about the physical condition of the home. For more information, click here

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