Buying a roofing contractor in Canada

Someone evaluating a roofing company is buying more than trucks and a customer list. The business depends on crews working at height, on approvals that may belong to individuals, and on obligations to roofs already installed. Before comparing price, work out what you personally need in place to operate it on day one, because some of those requirements may not transfer from the seller. After that, the useful questions are about what a good roofing business looks like on paper and what to ask the seller about directly. This guide covers both. It is not advice on whether to buy any particular business.

What you must qualify for yourself

In Quebec, the Régie du bâtiment du Québec publishes licence classes and subclasses and a repertory for checking a contractor’s licence, so confirm which licence the roofing work requires and whether you can hold it. In Ontario, WSIB says a buyer of a business’s assets should get a purchase certificate, requested before the date of sale, and that it may hold the purchaser liable for amounts the vendor owes up to that date without one, so ask WSIB about the certificate and your own account before closing. If you will operate commercial vehicles in Ontario, the province says you must have a valid CVOR certificate, except for the vehicles it lists as not needing one, and that the CVOR program monitors and evaluates operators’ safety records. Ask each manufacturer program and your insurer what they require of a new owner. The answer on whether trade licences transfer sets out the principle.

What a sound roofing business looks like on paper

Ask for job-level records rather than annual totals. Useful cuts are repair work against full replacement, residential against commercial, and work from referrals against work won on price. Look at how many roofs were finished in each recent season and how the season was filled. Ask whether revenue is tied to one storm or one referral source or comes from a spread of sources, which only the detail shows.

What the seller may not volunteer

Ask about open callbacks and leak complaints on recent roofs, deposits collected for work not yet started, and any dispute with a supplier or an insurer. Ask who actually holds the manufacturer certifications and the relationships with adjusters. Ask how the crews are engaged. The Canada Revenue Agency explains that, generally, an employee works under the direction and control of whoever hired them, while a self-employed worker is free to choose how to carry out the contract, and that the status chosen must reflect the working relationship. If crews are treated as contractors, ask how that was decided.

Timing the purchase around the season

Roofing work follows the weather, so the date of closing matters. Ask where the business stands in its season on that date, which roofs are started and which are only contracted, and who pays for materials already ordered. Confirm how deposits received before closing will be treated, since a buyer who completes the work may not have received the payment for it. If closing falls just before the busy period, ask whether the seller will stay for the first weeks, introduce you to the crew leaders and hand over supplier and insurer contacts personally.

The fleet and the equipment

Ask for a full list of trucks, trailers and equipment, with who owns each and whether any is leased or pledged to a lender. Ask for the carrier’s safety record if the vehicles are operated commercially, and for the maintenance history of the larger items. Consider having an independent person look at the items that matter most. Check also whether the company’s vehicles and equipment are registered in the name of the business or in the owner’s own name.

The people who come with it

Staff rules differ by province. In British Columbia, the Employment Standards Act deems the employment of a business’s employees continuous and uninterrupted for the purposes of the Act when all or part of the business is disposed of, subject to the exceptions the ministry’s interpretation of the section describes (for example, a sale by a trustee in bankruptcy). Other provinces run their own regimes, so ask your lawyer what applies where the business operates. Whatever the rule, find out which crew leaders hold the customer relationships and whether they are willing to stay. The buyer due diligence checklist lists the broader items.

Finally, ask the seller why the business is for sale and what the owner plans to do next. The answer may tell you how involved the owner is today and how much of the daily work you would take over. Ask the seller to describe the week-to-week running of the company and to put the key relationships on paper.

• Which licence, registration and workers’ compensation account you need in your own name to operate from day one
• How the job mix splits between repair and replacement, residential and commercial, and storm and non-storm work
• Open callbacks, deposits held and unstarted jobs, and who would carry them after closing
• Who holds the manufacturer certifications and the insurer relationships, and whether they are staying
• How crews are engaged, and whether that arrangement matches the working relationship in practice