Mike 'Holmes Approved Homes' demolished due to alleged defects

A largeexcavatortears through a modern house in Meaford, Ont., a picturesque community on Georgian Bay. Occupied for just two years, the home's once soaring ceilings, bigwindows and backyard patio are demolished intocrushed glass and wood.

"It's traumatic," said Fayard Johnson, who lives just down the street. "Really surprised to see that my neighbour's house is going down."

Another home that belongs to Fayard's next-door neighbour is also slated to be torn down.

The demolitions are the latest chapter in the saga of TerraceWood, a housing development launched in Meaford in 2015 to much fanfare. The "boutique" subdivision of houses was built by Third Line Homes and endorsed by celebrity contractor and popular TV host Mike Holmes.

Holmes is famously known for rescuing homeowners from botched construction jobs. He promoted TerraceWood, including on a billboard, as "Holmes Approved Homes."

"Third Line Holmes Approved Homes are built with innovation, integrity, and a commitment to make it right," Holmes said in a promotional YouTube video.

But things didn't go so right according to Tarion, Ontario's new-home consumer protection organization. As CBC News previously reported, Tarion filed an $8 million lawsuit in 2021 against parties involved in the project, alleging 14 TerraceWood houses were built with defects.

Now, CBC has learned that Tarion has condemned three of those homes.

Two have already been torn down and the third is waiting for a demolition date.

"Given the nature of the defects discovered" in the houses, "demolition was a more reasonable option than repair," Tarion spokesperson Andrew Donnachie said in an email. Some defendants in the suit claim it was incorrectto condemn all three homes.

Watch / Why some Mike 'Holmes Approved Homes'are being demolished

Why some Mike Holmes Approved Homes are now being demolished

9 months ago

Duration 8:47

CBC News has learned two homes in a Meaford, Ont., development promoted by celebrity contractor Mike Holmes have been demolished because of alleged defects. CBC Newss Sophia Harris breaks down what went wrong and Holmess companys response.

CBC also found land registrydocuments showing one of Holmes's companies provided Third Line Homes with a total of $390,000 in private mortgages to help it buy land for the development.

Some homeowners say they're disappointed that Holmes, whose motto is to "make it right," never returned to TerraceWood to help make things right in this case.

"The neighbourhood has been disturbed," said Fayard, whose TerraceWood house recently underwent major repairs instead of being torn down.

"If [Holmes] had come and taken a look and said, 'Well this is what's wrong and this is how I can help,' I think that that would have been a stand-up thing to do," he said. "After all, it was Holmes Approved Home[s]."

$8-million lawsuit

Tarion was established by the Ontario government to help ensure defects discovered in new homes still under warranty are repaired even if the builder reneges on its warranty obligations.

In its lawsuit, Tarion alleges the 14 TerraceWood houses were built with flaws such as improperly installed roofs, water leakage and major structural issues that raise "serious safety concerns."

Tarion alleges the builder, Third Line Homes, failed to fix the defects, so Tarion has been paying for all the repairs.

The lawsuit targets more than a dozen parties associated with the project, including principals with Third Line Homes, the Municipality of Meaford, which inspected the houses, and The Holmes Group, Mike Holmes's company. The partiesdeny any wrongdoing in their statements of defence.

The case has yet to go to trial.

Fayard said Holmes's association with the project influenced his decision to buy into TerraceWood.

"You feel that if it's Holmes approved, that it's most likely something that you can put your money on," he said.

In 2016, Holmes posed in Fayard's doorway for a promotional photo during construction, giving his trademark "thumbs-up."

But, according to Tarion's lawsuit, Fayard's house had defects.

He said he and his wife had to move out in 2022 for more than a year to make way for major structural repairs, such as replacing a wrong-sized beam holding up the second floor.

"We were told that there was danger. As a matter of fact, when they did do the shoring up, we couldn't come in at any time," Fayard said.

"It was very emotional. I mean, before the move, during the move, and living somewhere else. It's affected our life greatly, probably for the rest of our lives."

Neighbours Andrea Hart and Myles Johnson, no relation to Fayard Johnson, said they also had to vacate their house for an entire year while it underwent repairs including structural fixes.

That was in 2022. They're back in the house now. But six years after the couple first got the keys to their new home, it's still under repair.

When CBC News recently visited the couple, the home's exterior siding was being replaced.

"It wasn't installed correctly," said Myles.

"We're getting tired of it," Andrea said. "We just want to see it done."

The couple said Holmes's endorsement was the main reason they bought into TerraceWood.

"You would think buying a Mike Holmes Approved Home, there would be no problems. It would be perfect," said Andrea.

Companyconnected to Holmesloanedbuildermoney

Tarion's lawsuit alleges The Holmes Group failed to do additional house inspections for homeowners who had commissioned them and misrepresented Third Line Homes as a competent builder.

In its statement of defence, The Holmes Group claimed it "made no representations" to anyone regarding the development, wasn't hired by any homeowners to do inspections and, in fact, "had no involvement whatsoever" with the project.

Maybe not, but ads for the project and documents CBC News uncovered suggest that Mike Holmes, the celebrity, and two of his other companies were involved in several ways.

Ontario land registryrecords show that M. Holmes Holdings Ltd., where Mike Holmes is listed as president and treasurer, provided Third Line Homes with two mortgages at 10 per cent interest to help it buy 25 TerraceWood plots of land. The mortgages totalled $390,000.

Fayard was surprised when CBC News showed him the mortgage documents.

"It shows that he was involved from the start," said Fayard.

"It's making me feel even a little bit more disturbed that he didn't come around to help us out when we were looking for help," he added."That's hurtful."

WATCH | $8-million lawsuit alleges defects in 'Holmes Approved Homes':

Development promoted by Mike Holmes now subject of $8-million lawsuit

2 years ago

Duration 5:03

An Ontario housing development promoted by celebrity contractor Mike Holmes is now the subject of an $8-million lawsuit filed after some homeowners said their new houses had defects. Now, Holmess company is one of over a dozen defendants being targeted.

Another company, a numbered corporation where Mike Holmes is listed as president, bought a TerraceWood property for an undisclosed amount.

The purchase was reflected in several TerraceWood ads that declared Holmes bought the subdivision's first house. In 2016, Holmes posed for a promotional photo in front of the house, owned by the numbered company he's connnected to, giving it a "thumbs-up."

According to land registryrecords, thecompany sold the house to a couple in 2017 for $790,000.

When it was listed, the Holmes Approved Homes Facebook page promoted the listing,stating, "You can't go wrong with this #HolmesApprovedHome, buil[t] by Third Line Homes."

But Tarion's lawsuit claims this house also had defects. Aletter from an engineering firm to Tarion stated that structural and roofing repairs were completed on the house in 2022.

"[Holmes] puts his thumbs up and then disappears," said Myles. "Then we're left holding the carnage."

He sent several private messages about TerraceWood's issues to Holmes's Twitter (now X) account. He never responded.

"You just sort of shake your head," said Myles.

The Holmes Group responds

CBC News showed documents detailing Holmes and his companies' dealings in TerraceWood to realtor and real estate law expert Varun Sriskanda, who was not involved in the development.

"As soon as you're lending money on the property and the project, you have a vested interest in seeing it be built," he said.

"As soon as you're marketing it and advertising that it's approved by you, then you're involved."

Sriskanda said he believes Mike Holmes bears some responsibility.

"He needs to stand by his word and ensure that these are Holmes Approved Homes."

CBC News was unable to reach Mike Holmes.

Nancy Tourgis, a lawyer representing the Holmes Group in the Tarion lawsuit, disassociated the company from the houses' alleged defects.

Tourgis said in an email no homeowner opted to buy an upgrade inspection package offered by The Holmes Group, so it "had absolutely no access to any of the residences in the project, from their design, to their installation and construction."

Andrea and Myles said they assumed the Holmes inspections were included with their house purchase.

"It was a Mike Holmes Approved Home," said Myles.

"It was one of the sales pitches," said Andrea.

What about Third Line Homes?

The lawsuit also targets Paul and Mary-Jo Osborn, principals with the builder, Third Line Homes. The company is now insolvent and no longer licensed in Ontario to build homes.

Tarion claims the Osborns "failed to take reasonable care constructing the homes," and "failed to discover and remedy deficiencies."

The Osborns say Third Line Homes built quality houses. They claim it was Tarion that caused problems by excluding Third Line from dealing with homeowners' complaints about defects.

"We are confident that Tarion overstepped themselves," the couplesaid in an email to CBC News.

Both the Osbornsand the Municipality of Meaford suggested it was wrong to condemn three of the houses.

Based on "expert engineering advice," some of the homes which Tarion condemned "were more than capable of being repaired," said Matt Smith, the municipality's interim CAO, in an email.

The Osborns suggested owners of the condemned homes may have encouraged Tarion to tear them down, likely so they could pocket the compensation.

"There are so many cracks in the Tarion process that savvy homeowners know how to work the system," said the couple.

Reached by CBC, the owners of the three condemnedTerraceWood homessaid they were not able to comment.

Homeowners CBC did speak with say no one has benefited from the problems at TerraceWood, but, instead, many have endured setbacks and frustration sometimes for years.

"It's worn us down. It's exhausting," said Andrea. Once the repairs are done, she wants to sell the house she and Myles had once hoped would be their dream retirement home.

"I just want to get the hell out of here," she said.