Deal & Partner | Builder Vetting

Choosing a Builder Partner

A co-development partnership is a 24-month marriage with construction risk. The wrong builder costs you time, money, and — in the worst case — your land. Here is the shortlist of what to verify before you shake hands.

The Six-Point Vetting Checklist

BC Housing Licensed Residential Builder

Required by the Homeowner Protection Act for any builder constructing new homes in BC. Check their licence number directly on the BC Housing directory. No licence = no conversation.

2-5-10 Home Warranty Insurance

Mandatory on all new homes in BC. Covers 2 years on labour and materials, 5 years on building envelope, and 10 years on structural defects. Confirm the warranty provider and policy number in the contract.

Completed project history

Ask for five completed multiplex projects in the last 3 years. Drive by them. Call one or two of the owners. A builder who won't give references has a reason.

Financial backing

A co-development partner needs working capital and a construction lender relationship. Ask which lender they use and for a letter of intent, not just a business card.

Insurance

Commercial General Liability ($5M minimum), Builders Risk, and WorkSafeBC clearance letter. All current, all verified before breaking ground.

Legal and accounting team

A builder using a real estate lawyer you have heard of, and a CPA firm, is a signal. A builder using a notary for a multi-million-dollar development agreement is not.

Red Flags: Walk Away Immediately

✕ Refuses to work with your lawyer; insists you use theirs.
✕ Cannot produce a BC Housing licence number on the spot.
✕ Pressures you to sign "before the market moves."
✕ Term sheet is vague on unit selection, timeline, or remedies.
✕ Can't name their construction lender.
✕ Wants you to transfer title before any permits are filed.
✕ Proposes no performance bond.
✕ Previous projects are all "in progress" or "coming soon".

Contract Must-Haves

Specific unit allocation

Your retained unit(s) identified by unit number on the proposed strata plan, with square footage, floor, orientation, and finish schedule.

Performance bond or equivalent

A completion bond from a surety company, or a letter of credit, or a guarantee from a parent company with verifiable net worth.

Milestone-based progress draws

Construction lender draws tied to independent quantity surveyor inspections. No blanket advances.

Specific performance clause

If the builder walks, you can force completion through the courts. Without this clause, damages is your only remedy.

Lien holdback provisions

BC Builders Lien Act holdback (10% of progress draws) held in trust. Non-negotiable.

Dispute resolution

Mediation first, then binding arbitration under the BC Arbitration Act. Faster and cheaper than litigation.

Termination triggers

Specific circumstances that let you walk away with your land back: prolonged stoppage, insolvency, licence revocation.

Change order controls

Any change > $10K requires written homeowner approval. No verbal authorizations.

Best For

✓ Builders with verifiable BC Housing licence and 2-5-10 warranty track record.
✓ Partners willing to work with your independent lawyer from day one.
✓ Teams with a proven construction lender relationship.

Usually Fails When

✕ The builder is a numbered company with no completed projects.
✕ You are being rushed through the term sheet.
✕ Insurance certificates are "coming later".

What To Verify Before Spending Money

→ BC Housing licence number on the public directory.
→ Certificates of insurance, in writing, before any contract signing.
→ Five completed multiplex references you can actually contact.

FAQ

How do I verify a BC Housing Licensed Residential Builder? +

Go to bchousing.org/licensing-consumer-services/find-a-licensed-residential-builder and search by company name or licence number. The directory shows licence status, suspensions, and complaint history. This takes 90 seconds and must happen before any term sheet.

What insurance does the builder need? +

Commercial General Liability at $5M minimum, Builders Risk insurance naming you as additional insured, active WorkSafeBC clearance letter, and the mandatory 2-5-10 Home Warranty Insurance. Ask for certificates, not assurances.

Is a smaller builder actually better for a 4-plex? +

Sometimes. A builder doing 50 multiplexes a year has process advantages. A builder doing 5 per year has attention advantages. The key is not size but whether they have actually completed projects similar to yours — not just designed them.

Should I pay for my own lawyer or use the builder's? +

Your own, always. The builder's lawyer represents the builder. Budget $5K to $15K for independent legal review of the term sheet and definitive agreement. It is the single highest-return expense in the whole deal.