Buying a drywall contractor in Canada

Someone evaluating a drywall contractor is buying a flow of project work and the people who finish it. The trucks and tools are part of the decision. Also weigh whether you can keep the general contractors who award the work, keep the crew, and meet what those general contractors require of a subcontractor. This guide is written from the buyer’s side of the table. It describes what a sound contractor looks like on the inside, what a seller may not mention unprompted, and what you must clear yourself before taking over. It gives no view on whether any given purchase makes sense.

What a sound one looks like

Judge a candidate by how the work is held, not only by the sales number. Look for relationships spread across several general contractors rather than one, with more than one person at the company who knows each account. Look for a crew that has worked together for years. Look for work in both new construction and renovation, and for records that show each job was costed, finished and closed out. Ask to see a few finished jobs in person. Ask to see finishing quality on site as well as on paper. Ask the owner which jobs they are proudest of and which they would rather forget, and compare that with the general contractors’ view if the seller allows contact. Differences between the two views are worth following up.

What a seller may not volunteer

Ask directly which general contractor accounts exist only because of a personal friendship with the owner. Ask which crew members have said they might leave, and whether any key workers are subcontractors who could take the same work elsewhere. Ask about callbacks, including any moisture or mould complaints, and about any fire-rated or multi-unit job where an inspector asked for rework. Ask what the owner personally does each week, using key person risk as your frame. Write down each answer, with the date, and check it later against the documents; compare what you are told with what you later find, and follow up on any gap.

Qualifying yourself and the company

The Ontario WSIB says a principal who directly retains a contractor to perform construction work must obtain a clearance certificate confirming the contractor is in good standing, and that without one the principal may be liable for the contractor’s payment obligations to the WSIB, up to the value of the labour portion of the contract; the policy does not apply to certain exempt home renovation work retained by householders. Other provinces have their own rules: WorkplaceNL says employers who work as contractors will often need clearance as part of their contract requirements, and WCB Alberta says a business that hires a contractor without coverage could be responsible for outstanding premiums. Ask whether a company that is not in good standing can get the clearances general contractors ask for. Confirm the status of the target company before you commit, and ask whether the same applies to the company you will operate through after closing. If you plan to buy through a new corporation, ask the board how it treats a new account, and ask the general contractors whether they will accept its clearance.

Also ask what trade, municipal or provincial credentials apply to your crews and the buildings you will work in. This guide does not assume that a licence is or is not required, because that depends on the province and the kind of project. Ask your lawyer, and ask the general contractors you hope to keep what they expect of a subcontractor, including insurance.

Questions to put to the owner

• Which accounts would you expect to keep working with the company if you were away for six months, and why
• Which crew members, if any, have been offered work elsewhere in the past year
• What claims, rework or disputes has the company had on completed jobs, and how were they resolved
• What is outstanding from general contractors on finished work, and for how long
• What do you plan to do in the first six months after closing, and what are you willing to put in writing

Whether other buyers are involved

Ask the seller or broker whether other buyers are in the conversation, and how long you have. Decide in advance which items you will not skip however short the window. It does not change your own checklist. The next step is buyer due diligence, covered for this trade in the due diligence guide.