Buying a flooring contractor in Canada

If you are evaluating a flooring contractor, you are buying an operating trade business, not just a customer list. Three questions come before price, and they are the ones this guide is built around. Can you lawfully run the work in the province, whatever the seller held? Will the people who do the installing still be there? And will the supplier terms behind the margin continue? A contractor with steady repeat work and documented methods is a different purchase from one that runs on the owner’s personal reputation and a few verbal arrangements, even when the financial statements look alike.

What you need to hold yourself

Do not assume the seller’s position transfers to you. Check, with each province’s own authorities, whether the work you will do requires any licence, registration or certification. In Quebec, the Régie du bâtiment du Québec publishes a page on knowing whether a licence is required, with lists of work requiring a licence and work not requiring one, and a repertory of licence holders. Ask the seller what licence or registration the business currently holds, and ask for a copy, ask the authority whether it stays with the entity or with a named person, and confirm that before you sign. Ask the suppliers whether manufacturers set installer certification requirements for warranties, and whether the existing crew holds them. If the answer is that certification sits with individual installers, then it leaves with them, and your plan for replacing it belongs in the offer, not after closing.

What to look for

Look for jobs that come back without the owner personally chasing them: builders who re-order, homeowners who refer, and a showroom that draws people for its own reasons. Look for estimating and job-file systems that someone other than the owner can run, and for warranty callbacks that are rare and well documented. A contractor that can show its job history by customer and by crew is easier to assess than one that cannot. Ask to ride along on installations or visit jobs in progress if the seller will allow it, and ask the seller to explain how a job moves from quote to final invoice. Pay attention to how many steps depend on one person, whether that is the owner, an estimator or a lead installer. Also ask how the business handles a failed installation or a product defect, since the answer shows how warranty costs are absorbed and who inside the business deals with them.

What the seller may not volunteer

Ask directly about customer complaints and warranty claims, about jobs still in progress and whether deposits have been spent, and about which installers are likely to leave. Ask which builder relationships depend on the owner personally and whether any supplier has said anything about a change of ownership. BDC notes that a buyer may insist on a reduced price when the seller cuts all ties, so ask what role the seller will play after closing and for how long. A seller who has thought about the handover should have answers. If the answers are vague, treat that as information about how the sale would go, and ask for the same point in writing from a supplier or builder directly.

Check the province’s own rules

Workers’ compensation, licensing and consumer rules are provincial, so a checklist from one province does not travel. WorkplaceNL, for example, tells employers who hire contractors that clearance confirms whether a contractor has its own coverage and is in good standing, and that if the contractor has its own coverage, the clearance letter clears the hiring employer of responsibility for the contractor’s unpaid assessments. Whether you need to check anything like that depends on where the business works and how it hires its crews, so ask the province’s board directly.

What you should ask about stock and showroom

Ask for the stock list with the age of each line and the last date it sold, and ask how the seller values discontinued items. Ask who owns the sample libraries and displays, and whether any are on consignment or loaned by a supplier. Check the showroom lease for its remaining term, renewal rights and any consent needed for a new tenant. If the business also sells to homeowners, ask for the sales terms and warranty wording customers sign, and how deposits are held. These are asset questions, and they are separate from the question of whether the installation side is sound.

• Which licence, registration or manufacturer certification applies in the province, and who holds it today
• How the installers are engaged, how long each has worked with the business and who would stay
• Which builder and supplier relationships depend on the seller personally
• The warranty and callback record for recent jobs, and jobs still in progress at closing
• What lenders, including programs like the Canada Small Business Financing Program, will fund for this purchase