* Defendant in lawsuits totalling $2 million

* Almost $80,000 in fines

* More than 50 stop-work and compliance orders

* Banned from building new houses for sale

At a quick glance from the outside, there's nothing particularly noteworthy about the homes at 647 and 649 York Blvd. across from Dundurn Castle.

They look like what they're supposed to look like -- two single-family dwellings, which is what the building permits issued on Aug. 20, 2003, by the City of Hamilton called for.

But look closer.

Attached to an outside wall of each house are 10 separate hydro metres, clearly numbered one through 10.

A city building inspector thought that was odd.

The building department investigated and discovered that what were supposed to be single-family homes were, in fact, two 10-unit apartment buildings.

Meet Fred Spencer -- local builder, real estate agent, failed candidate for Hamilton council and thorn in the side of the city's building department.

He's also a thorn in the side of Tarion Warranty Corporation, the company that registers builders in Ontario's new home warranty program and administers warranty legislation on behalf of the provincial government.

Spencer, whose company built the two houses, was eventually charged, convicted and fined for the violations at 647 and 649 York Blvd.

Those penalties are just part of an alarmingly long rap sheet that Spencer has accumulated over the past decade building houses in Hamilton.

It's a laundry list of infractions that includes almost $80,000 in total fines levied by the city and Tarion, and more than 50 orders to comply and stop-work orders.

Two lawsuits seeking a total of $1.4 million have been launched by families who bought homes built by Spencer that have no building permits. Two charges concerning a Dundas house built in 2005 are still to come before the court in November. That's not the end of it.

Last month, Tarion launched two lawsuits against Spencer and his companies seeking a total of about $425,000 in compensation to recoup money Tarion claims it had to spend to repair problems with houses that Spencer and his companies had built.

Two years ago, Tarion took the unusual step of revoking Spencer's registration in the new-home warranty program and reached an agreement that banned him and his companies from building new houses for sale in Ontario.

Yet Spencer has been able to continue building new houses since the ban was put in place because of exemptions in the warranty legislation that allow for houses that are builder-occupied or used for rental purposes.

There's nothing Tarion can do to change the legislation, and there's little the city can do, except monitor construction activities, issue compliance orders if needed and lay charges under the Building Code Act when necessary.

"The Building Code Act does not give us the right to refuse a permit if the applicant submits the complete permit application and complies with all the applicable laws," said Jorge Caetano, manager in the city's building department.

For his part, Spencer suggested to The Spectator that the general incompetence of Tarion and the city's building department are to blame for his record.

"I will tell you that I am very proud of the homes I have built and most people compliment the homes I have built," Spencer told The Spectator in written responses to questions he was forwarded.

"THERE ARE those that bitch or those that are jealous, but we can't please everyone," he added.

Spencer's track record raises questions about his unwillingness to follow the rules and whether his houses meet building code standards.

But it also raises questions about the building permit process in Hamilton and how vigorously the city has been monitoring Spencer and other builders over the past decade.

In response to a Spectator Freedom of Information request, the building department released records of 25 dwellings that it identified as having been built by Spencer and his companies since 1998.

In 15 of the 25 cases, construction had started prior to a permit being in place, yet the city only issued five stop-work orders against Spencer or his companies for building without a permit.

On nine occasions, the city conducted its first inspection of a Spencer dwelling before a building permit had been issued.

In one case -- 59 Dicenzo Dr. on Hamilton's south Mountain -- the city conducted its first inspection two months before there had even been an application for a building permit.

Ontario's building code clearly states that no person shall commence construction of a building until a permit has been issued.

A Spectator investigation in May based on a random sampling of 120 permits revealed that one in three Hamilton houses built in the previous 18 months was under construction before the city issued a building permit.

"Standard procedure is starting without a permit," said Spencer. "This was confirmed in one of your (articles). This is still being practised today."

The city has explained in the past that it will conduct inspections of a site in the absence of a building permit as a matter of public safety to ensure that construction conforms to the building code.

"Since The Spectator's articles we have reinforced and updated the previous procedure on what to do when construction starts without a permit," said Caetano.

THE LIST OF infractions and legal actions being taken against Spencer and his companies is lengthy:

* On Sept. 13, Tarion filed two lawsuits against Spencer and his companies.

One claim is for $400,000 to recover costs associated with repairing a house at 94 Crooks St. in Hamilton.

According to the statement of claim filed in court, Tarion alleges that Spencer's company "failed to ensure that reasonable skill and diligence was exercised in the construction of the home."

Tarion's allegations have not been proven in court.

Spencer indicated that he is currently preparing statements of defence to the two Tarion lawsuits.

The house in question is located at the end of Crooks Street, a short street near Barton and Locke streets. It's perched on the edge of a 15-metre cliff, with a magnificent view of the harbour and its parks.

The owners took possession of the house in February 2003. By April of that year, as the frost lifted from the ground, the house began to sink and slide out from its base on the hill's edge.

Over the course of 18 months, the side of the house closest to the harbour dropped 35 centimetres more than the opposite side over a nine-metre span, giving the house a noticeable, and dangerous, tilt.

Eventually, the house had to be jacked up and supported on 54 new pilings that were driven deep into the ground.

The entire cost of fixing the problems, including administration fees and engineering studies, has reached almost $325,000. As recently as four weeks ago, the owners were still completing repairs inside the home.

Spencer told The Spectator that the footings and foundation at the site had received an engineer's stamp of approval, and the soil and excavation had been inspected by both the engineer and the city, and passed on two different occasions.

"The city has refused to take any responsibility and Tarion has paid the owner whatever he wanted to do the repairs," Spencer said in an e-mail to The Spectator.

In response, the building department said that footings had already been poured when an inspector arrived on site.

"A letter from a professional engineer was submitted by Mr. Spencer for the work that had been completed prior to our inspection," said Caetano, adding that no engineering studies, reports or drawings were included.

"The footings and foundations were approved based on the engineer's report submitted by Mr. Spencer."

THE OTHER lawsuit seeks almost $27,000 to cover repairs to four houses that Tarion funded.

According to the statement of claim filed, Tarion also discovered in the course of its investigation that Spencer's company "acted improperly and illegally" by selling the houses without being registered in the new-home warranty program.

"We are in active litigation with him and it's a substantial sum of money," said Rob Mitchell, spokesperson for Tarion.

Spencer said that there are a lot of issues for solicitors to sort out.

"Tarion can file or ask for whatever they want," Spencer said. "What they get is something else."

* Since 2003, Spencer and his companies have been fined $69,000 for a variety of building violations related to five properties in Hamilton.

Of that total, $50,000 in fines were assessed July 27 against one of Spencer's companies for the two 10-unit buildings on York Boulevard.

The company, 1486448 Ontario Inc., was fined $15,000 for failing to call for inspections and $20,000 for not building in accordance with plans at 649 York Blvd., and another $15,000 for failing to call for inspections at 647 York Blvd.

"I'm not aware of these fines," Spencer said.

The city says neither Spencer or anyone else representing the numbered company showed up in court for the July 27 trial, and the fines remain unpaid.

SPENCER BLAMED any problems with the York Boulevard dwellings on a city employee who "had his own opinion of the homes and caused a fuss."

He said the dwellings were being used as student housing.

"From what I understand, Hamilton is endorsing safe student rental," Spencer said. "There is no safer, cleaner or reasonably priced (accommodations)."

Caetano said Spencer's fines for 2007 are the most levied against any builder in Hamilton so far this year.

"We're not aware of anyone else that's this high," he noted.

Spencer ran unsuccessfully as a candidate for Ward 1 councillor in last fall's municipal election. He received 316 of the 8,060 votes cast.

* The city has issued 53 orders to comply against 20 of Spencer's dwellings, including five stop-work orders.

The compliance orders deal with issues such as construction prior to issuance of a permit, not calling for inspections, building not in accordance with plans or violations of the building code.

One property had 11 orders to comply, one had eight and another had six orders issued against it.

According to the documents obtained by The Spectator, only five of the 25 dwellings built by Spencer and his companies did not have some type of order to comply issued.

At one property, an order to comply issued by the building department listed 17 items that did not meet Ontario Building Code standards. At another property, a compliance order cited a dozen violations of the building code.

Caetano said the number of orders was a concern.

"Any builder with 53 orders on 20 properties, that would be considered high," said Caetano.

"We do spend a considerable amount of time dealing with issues associated with Mr. Spencer and his companies," Caetano added.

Spencer said that orders to comply "are not that important."

"As a builder, this could be for numerous reasons," Spencer said. "You make it sound, and pass it on to the readers, like this is always a very bad thing. It's not."

The building department holds a different view.

"The city considers orders to comply very important," said Caetano.

Based on the building department records, of 25 dwellings built by Spencer and his companies since 1998 only one has a clean slate -- proper permits in place, no orders to comply, no stop-work orders, no missing inspections, no construction started prior to the issuance of a permit and no charges or fines.

The city says that 35 of the 53 orders were complied with by Spencer and his companies.

Of the remainder, eight orders led to convictions and fines, such as the York Boulevard properties. One order led to charges that are still before the court.

Nine other orders are considered active -- meaning there are outstanding deficiencies that need to be corrected.

* In May 2005, Spencer and one of his companies was convicted of 11 charges of failing to enrol new homes in Ontario's warranty program and paid fines totalling $10,000.

* Eleven of Spencer's 25 buildings have never had a final inspection recorded by the city.

The city says that all 11 have had some inspections carried out during construction.

"While there are some outstanding deficiencies on these 11 homes ... we are confident that these houses were safe for the occupants at the time we conducted our last inspection," said Caetano.

* Seven of the dwellings were flagged by the city for not being built according to plans.

* Two of the houses have never been issued a building permit, despite the fact that the homes were completed in the summer of 2004.

Now, the city and Spencer are facing lawsuits launched by the families living in the two homes on Mary Street that were constructed without building permits.

TWO OF Spencer's companies are facing a total of $1.4 million in two separate lawsuits filed by the homeowners, and the city is also facing a combined $1.4 million in lawsuits by the same north end families, who live at 412 and 414 Mary Street.

In each case, the homeowners allege there are dozens of deficiencies with their respective homes.

They also allege that Spencer's companies failed to obtain the proper permits and then failed to comply with the city's orders, but they also fault the city for not issuing a stop-work order against the builder.

Spencer has filed a statement of defence in each case denying all of the allegations.

Spencer told The Spectator that "the permits were never 'issued' but they were examined and waiting for 'pickup' at the front desk.

"The homes were not built without a permit, they just never got picked up," he said.

The city has indicated that it has no comment about the lawsuits because they are matters still before the court.

But Caetano did indicate that the permits for 412 and 414 Mary Street have not been issued because there are still outstanding charges to be paid.

"The permits are not waiting to be picked up," Caetano added.

Despite the number of missing final inspections, missing permits and outstanding orders to comply, the city says it believes the houses in question are safe for the occupants.

"I would say that they probably are safe in terms of structural and plumbing and all that type of thing," said Caetano. "They were just minor (issues) that were left to be done.

"There were no structural or plumbing or heating system problems."

Caetano indicated that the city is following its policies and procedures when it comes to buildings constructed by Spencer and his companies.

"If any contractor or company continuously violates the building code or other applicable laws, then we issue the orders and lay charges, and then we'd ask the court for higher fines if there have been previous convictions," said Caetano.

"It would apply to anybody, not just Mr. Spencer," he added.

Caetano picks his words cautiously when asked if the city is monitoring Spencer's building activity closely.

"We would monitor anybody closely that did this type of thing," said Caetano.

"With this many orders, we'd follow a protocol saying, 'Hold it, let's ensure that we have timely orders,'" he added, "but that would apply to anyone."

Spencer is currently not registered with Tarion and the new home warranty program.

Without that registration, Spencer is not allowed to build new homes for sale to the public in Ontario.

In fact, Tarion and Spencer struck exactly that agreement in January 2005 as part of a decision reached at the province's Licence Appeal Tribunal.

THE ORDER agreed to by Spencer states that he shall not directly or indirectly "enter into any agreements of purchase and sale as builder and/or vendor, and/or commence construction of any new home as builder and/or vendor," as defined by the Ontario New Home Warranties Plan Act.

But under the legislation, a dwelling doesn't have to be registered with the new-home warranty program if the builder constructs the home for personal use or for use as a rental property.

If a builder isn't planning to register a house in the new-home warranty program, a Tarion declaration form requires the builder to complete a section indicating the house is to be owner-occupied. Rental properties not registered with Tarion would also be covered in this section.

Since his 2005 agreement with Tarion, Spencer has built houses at 25 Matilda St. N. and 16 Peel St. S. in Dundas.

On Aug. 15, Spencer obtained a new building permit to construct a house at 28 Dundas St. in Dundas.

The city's spokesperson said that it has forwarded to Tarion declarations made by Spencer for the three houses in question that they would be owner-occupied dwellings.

On two of the declarations, according to the city, Spencer indicated the dwellings were rentals.

"We are working in conjunction with (Tarion)," said Caetano. "If he's not registering to sell (under the warranty program), then all we can do is notify Tarion that this is what he's telling us and get the declaration.

"It would be up to Tarion to take any legal action if the agreement has been breached," he added. "It's not an agreement between the city and Tarion."

Spencer said the three houses in question were built as rentals and weren't required to be registered with Tarion.

"Clearly on the permits issued, huge letters across the top, 'RENTAL,'" said Spencer.

"Builders everywhere are building rentals so they don't have to deal with employees at Tarion who don't know how to build homes, but can tell you what to do and how to do it.

"Ask builders what they think of the idiots sent out to inspect the homes."

Tarion's Mitchell said the ideal solution would be a requirement that all homes built in Ontario be registered in the warranty program, regardless of end use.

"We're somewhat hamstrung by the legislation and the wording of the legislation," Mitchell added.

Any changes to the new-home warranty legislation would have to come from the provincial government.

Mitchell said that Tarion will investigate cases where they suspect the builder isn't occupying a home that hasn't been registered by checking to see if there has been a change of address, insurance policies, mail delivery and cable and telephone hookups.

In cases of unregistered rental properties, Tarion will ask to see rental agreements and check with tenants to confirm their identity and the length of their rental agreements.

If violations are found, Tarion can lay charges and revoke a builder's registration in the warranty program.

sbuist@thespec.com

905-526-3226