When news broke last month of a young family whose dream of owning a new home in Niverville had been dashed, it raised the ire of many local residents. People are taken advantage of on a regular basis, but not every day does it hit so close to home.
The Memics’ Story
Dorde and Laura Memic are the faces behind the tragic story. Parents to a young child, the couple dreamed of selling their small Winnipeg home and settling in the country where houses are more affordable.
“The crime within Winnipeg seemed to be escalating and it made me uneasy at times,” says Laura Memic. “I realize there is crime everywhere, but the small community and being farther from Winnipeg made me feel like it would be a lot less often.”
There were many other things that attracted them to Niverville, not the least of which was the abundance of young families, the peace and quiet of country living, and the dog park where their two large dogs could run free.
Of course, the schools and upcoming recreation centre were great incentives as well.
Earlier this year, the Memics were thrilled to find an ad on Facebook Marketplace by a company advertising brand-new home builds in Niverville at a price they could afford. The company was called Fine Haus Building Co. A man named Jason Cianflone is the president and shareholder of the numbered company to which Fine Haus is registered.
“I inquired with the realtor as to why the price was so good and was told the lots were owned by the builder, so bulk pricing was done,” Memic says. “Also, the lots were slightly smaller than usual. So we made an appointment with the realtor to go over all the details and gave them our first deposit.”
The couple sold their Winnipeg home and moved into an Airbnb to wait out the build. The possession date for their new home was set for September 30, 2019.
Memic says everything felt legitimate until shortly after they signed the contract and turned over the second deposit. Worry began to set in as the summer passed with nothing happening at their new property.
Tension grew as every call to the realtor was met with vague answers or no response at all. Tension turned to panic as they discovered a Facebook page called the Jason Cianflone Scam Page. It had been created to give voice to the many individuals who’d had nightmarish experiences with Fine Haus.
The Memics immediately began to make inquiries, including a call to the Niverville town office where they discovered that a building permit had never been taken out on their property on Briarfield Court.
“We were told by Fine Haus that they got a permit on August 10, so we believed them,” Memic says. “Why would they lie about having a permit? That’s when I knew something was very, very wrong.”
A further call to a representative of the Fifth Avenue Estates development, in which their lot was situated, revealed another horror: Fine Haus didn’t own the property on which they had promised to build the Memic home.
Around this time, the Memics also discovered that while Fine Haus appeared to be a Winnipeg-based company, Cianflone actually resides in Texas.
October 31 was the last time the Memics heard from the realtor who sold them on the property. The realtor insisted that he, too, was in the dark about what was happening with Fine Haus.
Response from Fifth Avenue Estates
Ken Klippenstein is the property manager for Fifth Avenue Estates and their building company, Von Riese Homes. Klippenstein admits to having been wary of Cianflone, whose building company, Fine Haus, had been known as Manitoba Family Homes less than a year earlier. According to Klippenstein, Cianflone had already garnered a less than shining reputation under his previous company name.
Klippenstein says Fine Haus had hired a local person who was reputable and well known in the community to act as liaison between the contractors and Fine Haus. This was enough to gain Klippenstein’s trust. In hindsight, Klippenstein realizes that this employee had been duped by the company as well.
“Fine Haus put a down-payment on 22 lots,” Klippenstein says. “We had an agreement that they would take a certain number of months to pay out the balance. They closed on eight of them. The other ones I still own, but they had sold housing contracts for all of these lots, so all these people had a possession date and yet they didn’t own the lot.”
Klippenstein came to suspect that something was amiss when Cianflone’s building company requested that the 22 lots be contracted to Fine Haus separately rather than as one unit. Klippenstein refused, indicating that if they breached the contract on any one lot, Fifth Avenue Estates wanted to retain the legal right to withhold deposits on all of them.
Despite his concerns about Cianflone, Klippenstein says he has an obligation to respect the privacy of individuals or companies who purchase lots from him.
“By law, I can’t disclose information about the people that are buying lots from us,” Klippenstein says of his silence on the issue. “Now I can talk about it because it’s all in the media.”
Klippenstein’s second clue that something was up came when he discovered a house, well into its construction phase, on a lot for which Fine Haus had only paid the deposit. Based on a contract between Fifth Avenue Estates and Fine Haus, a build cannot begin until the lot is paid in full.
“He had no plans on ever finishing a house,” Klippenstein says, aware now of Fine Haus’s many unfinished builds in other communities. “He would finish one or two houses and let you think that that’s how it’s going to be done and from then on he doesn’t complete anything.”
While Fifth Avenue Estates has the legal right to assume ownership of the partially built home that now sits on one of their lots, they would likewise be left holding all of the liabilities and liens held against it. This puts Fifth Avenue Estates in a predicament.
The best way for prospective homeowners to avoid this kind of situation, Klippenstein says, is to research the builder’s history and reputation before signing any contracts or putting down a deposit. He also recommends hiring a lawyer with no affiliation to the builder to review the contract before you sign.
“My contracts state everything that I’m going to do for you,” Klippenstein says. “Cianflone’s state that he can make changes and not ever notify you about it. That should be a red flag when you see that in a contract.”
Even before this, though, Klippenstein says the prices Fine Haus was advertising for home builds should have been the first red flag to potential buyers. If it looks too good to be true, he says, get a quote from another builder to compare. Most builders’ pricing for a specific style of home will be very close.
Advertising house builds for significantly less money than the rest of the market seems to have been Fine Haus’s strategy, and for a while it worked.
Response from a Hired Contractor
Bryan Trottier is the owner of Trotco Electric, a company hired to do electrical installation on 24 Fine Haus home builds in Niverville. Trottier also admits to having had reservations about Cianflone’s previous reputation, although he likewise put his faith in the reputation of the company’s local representative.
“That representative got blindsided as much as the rest of us did,” Trottier says.
Trottier’s company completed work on six Fine Haus homes before things began to go awry. In total, he’s lost more than $33,000, which he feels may well be a complete loss.
“We began the projects and got paid for the first few,” Trottier says. “Everything was going fairly smooth and then, one day, the bottom just fell out.”
He first clued into a problem when other trades weren’t showing up to complete their part of the job. Shortly after, these trades began calling him to see if he’d received any payment from Cianflone’s company.
At that point, Trottier hired a lawyer and put a builder’s lien on the properties where he’d invested services. But a lien doesn’t guarantee he’ll be paid, since other creditors will have placed liens on the same properties.
Trottier knows of at least three other local contractors that lost money to Fine Haus. As well, banks will have been involved in the financing of these properties, and they too will be looking for compensation.
“To me, it seems so easy to avoid this because they had professional trades doing the work and the housing sales were done,” Trottier says. “It was just a matter of building the houses, paying the trades, collecting your money from the homeowners, and you’re good. I don’t understand this.”
Trottier says, just weeks before things began to go south, Cianflone told him that Fine Haus was hoping to complete up to 400 new home builds per year.
The last time Trottier says he heard from Cianflone was on October 31, when it was indicated to him that there would be a third-party company coming in to fix all the problems. Since that time, the company and its representatives have been completely unresponsive.
“Any time large sums of money are involved, there’s a risk to the contractor, to the homeowner, to the subtrades, there’s even a risk to the bank, and so there’s always an element of trust,” Trottier says. “So if you’re building with someone, you have to trust who you’re building with.”
As far as Trottier is aware, Fine Haus is still in operation since no bankruptcy claims have as yet been filed.
Response from Local Fine Haus Rep
For reasons of a non-disclosure agreement, Fine Haus’s Niverville representative requests anonymity, but he, as much as anyone, would like to see justice prevail.
This summer, he walked away from his job with Fine Haus when the company owed him $30,000 worth of wages that they weren’t paying out. By the time he walked away, he had also been dealing with months of frustration when his pleas to the company to complete certain projects were falling on deaf ears.
“I feel so used,” he says. “I was used for my credibility, used for my contacts, and had I known [what I know now] I would never have even considered working for them. Not in a million years.”
The representative agreed to join the Fine Haus team in December 2018. At the time, he said the company had a number of poor reviews, but in the building world that was nothing unusual.
What really pushed him to make the occupational move was Cianflone’s promise to the company staff that he would use a portion of the profit from every home build to construct orphanages in Mexico. This kind of philanthropy was something the representative could really get behind.
Even as things began to crumble, though, many staff were unaware. The Niverville rep says Cianflone’s method was to keep his staff very compartmentalized so they couldn’t see the bigger picture.
The Memics Go Public
The Memics chose to contact the media about their story in the hope of saving others from the same heartache. A detailed account of their experience with Fine Haus was published by the CBC on November 12.
“I wanted to give these victims a voice,” Memic says. “A lot of them are scared. I was also very furious that Fine Haus was still trying to sell or accept deposits only a week before the walkout, when we were still fighting for them to get something done on our lot. Nobody else should lose any money to these thieves.”
The couple has faced some public criticism for allowing themselves to be taken in. In contrast, there are also those who have demonstrated a generosity the Memics never anticipated.
At this point, they are still living in an Airbnb in Winnipeg and don’t expect they’ll ever see the $16,000 in deposits they paid to Fine Haus. Neither will they recoup the costs they incurred when they hired a moving company and put their furniture into storage earlier this year.
Niverville Resident Steps Up
Niverville resident Barry Piasta was moved beyond mere compassion for the Memics’ plight. Shortly after the CBC story broke, Piasta began a GoFundMe page to raise money to help the couple.
As well, he’s organizing a family variety show that will include dinner and an auction in February. Few firm details are in place at this stage, but he’s hoping others will join him in organizing the event.
“I need people to share my [Facebook] posts and to offer whatever they can, be it volunteering or [donating] items and skills,” Piasta says. “[So far] I’ve had three builders, five entertainers, two bakers, a restaurant, and a mortgage consultant offer their help. But I need more to come on board.”
Since fundraising plans began, Piasta says he’s become aware of 21 families, some of them new immigrants to Canada, who have been victimized by Fine Haus in one way or another. He hopes the fundraising initiatives can be successful enough to help some of those other families as well.
In the meantime, Piasta encourages everyone to put themselves in these victims’ shoes, recognizing that Fine Haus appeared well organized and legitimate to anyone who hadn’t been through something like a home build before.
“It’s simply wrong what happened to them and paints Niverville in a bad way,” Piasta adds. “It hurts all of Niverville’s builders and developers, too.”
Helping them, he says, is just the right thing to do.
When Laura Memic became aware of the fundraisers, she was speechless.
“This wasn’t something we expected,” Memic says. “We are so grateful for any and all the help we have received. Being a young middle-class family with responsibilities, it will take us years and years to get back to where we were. We would not have sold our home and given our only down-payment to a build if it wasn’t going to satisfy our dreams. We thank each and every person from the bottom of our hearts. They have no idea what this means to us.”
