How do I check warranty callbacks when buying a construction company?
Ask for a log of every warranty claim and callback, showing the job, the problem, the fix and the cost. Compare it to what the seller says, call a few past clients, and learn who stands behind completed work after the company changes hands.
A construction company’s past work follows it. Ask for the callback log, and if there is no log, treat that as information. A well-run firm can usually show when a claim came in, who attended, what was repaired and what it cost. Look for patterns. Repeated problems from one trade, one supplier or one site supervisor point to something that will keep costing money. Ask what has been done about it.
Check the paperwork on completed projects: warranty terms promised to clients, any holdbacks still unpaid, and any open disputes. Ask whether subcontractors and suppliers stand behind their own work, and in writing. Then talk with a few past clients, if the seller agrees. Ask how the company handled problems, not just whether it did good work. Finally, work out who pays. Your lawyer can explain how the agreement can allocate responsibility for past work, and your insurance adviser can tell you what coverage follows the company. Ask how quickly the company answered past callbacks, and whether the seller kept photos or reports from earlier repairs, because those records show what was fixed, how it held up, and who did the work.
Key takeaways
- Ask for the full callback and warranty claim log.
- Look for patterns tied to a trade, supplier or supervisor.
- Settle in writing who pays for repairs on past work.
- Ask for photos and reports from earlier repairs.
Related reading
15 pages on the same subject, grouped by topic.
Valuation
Due diligence
Buying
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canadian Construction AssociationIndustryCanadian Construction Association - CCA
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
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