An Ottawa couple says they’ve lost out on more than $381,000 after hiring a construction contractor to renovate their kitchen — citing delays, lack of inspections and oversight, and ultimately “poor” workmanship that they say ended up flooding their kitchen and basement within weeks of the project’s completion.
“It was devastating,” said homeowner Katy Alp.
Alp said she hired Giuseppe “Joey” Peloso, who runs Magnolia Design & Build, also known as Magnolia Construction, in 2023.
The couple paid $117,064.80 to Magnolia to demolish and renovate their outdated kitchen, according to a civil lawsuit they have since filed. Work began in March 2024 and ran until October 2024.
But about six weeks after Magnolia finished the project, the couple came home from a weekend trip to find a plumbing connection to the sink supply line had “failed,” said Alp.
“There was water running everywhere through our kitchen.… Our basement had about three inches of water in it, from corner to corner,” she said.
Her kitchen and basement eventually had to be redone.
“It was heartbreaking,” Alp said.
In their August 2025 civil claim, Alp and her husband Kaveh Afshar-Zanjani estimate damages at $381,979.02, plus punitive damages. That includes their payment to Magnolia, costs to hire other contractors to remediate and redo renovations, loss of belongings, and finding another place to live while the work was being redone.
Multiple separate lawsuits have been brought against Peloso and Magnolia in recent years. Plaintiffs include customers, subcontractors, investors and businesses, a tenant, and even two foreign entities: the Embassy of Niger and the Republic of Austria.
Peloso declined an interview. Through Ottawa public relations agency Syntax Strategic, Peloso wrote that he takes clients’ concerns seriously, but that legal disputes arise in “rare cases.”
“It is regrettable but a reality of the construction industry that when dealing with a high volume of renovations, multiple trades, suppliers, and custom-fabricated materials, disputes can arise from time to time,” Peloso wrote.
The couple’s claim states that upon investigation, the couple discovered Magnolia’s work was “entirely deficient and failed to meet the contractual and regulatory requirements including the Ontario Building Code.”
Peloso and his company filed a notice of intent to defend on Nov. 19.
Peloso wrote he “does not agree with the description of the workmanship.”
“We reject the basis of the claims made against Magnolia,” his statement reads.
Peloso wrote that his company has completed more than 400 renovation projects in the region over the past three years, with the majority to “customers’ full satisfaction.”
Bedard Plumbing Services, the subcontractor listed as another defendant, declined to comment.
Failed inspection, ‘deficiencies’
Alp said she notified Magnolia when things appeared wrong during the renovation.
“We realized things weren’t being done properly. Plumbing was in the wrong spot, electrical in the wrong spot,” she said. Alp added Peloso was “very responsive” during the renovation.
“People came numerous times to fix problems,” she said.
Peloso said Alp “never raised significant electrical or piping concerns outside of standard adjustments.”
The civil claim states the project was supposed to take about two months but ended up taking about six months, alleging it was due to Magnolia’s “lack of project management and supervision, coordination and quality control.”
Peloso said the delays that “were outside Magnolia’s control” was “communicated to the customer,” and said the project was “substantially” done by last June.
According to the lawsuit, after the flooding, Alp asked Magnolia to provide copies of inspection reports from the City of Ottawa, since Magnolia had told her the necessary inspections had been performed.
Magnolia wasn’t able to produce inspection reports, the lawsuit states, and Alp then arranged for a city inspection herself.
The report from that inspection in December 2024, which CBC reviewed, states: “No inspections on record.”
It also lists:
- “Plumbing Underground: Failed.”
- “Plumbing Rough-in: Failed.”
- “Hvac Rough-in: Failed.”
- “Framing: Failed.”
- “Plumbing Final: Failed.”
- “Building Final: Failed.”
“Correct all deficiencies,” the inspector wrote.
“I was flabbergasted because I was told by Magnolia that inspections were happening,” Alp told CBC.
According to the claim, further investigation found framing that was “not structurally sound,” cut joists causing “additional structural damage,” crooked windows and range hood ventilation that had not been properly installed, and live wires left exposed, among other issues.
Peloso said he “rejects claims against the structural integrity of the project,” and said Magnolia works to address any deficiencies. He said some of the observations were made in the pre-final stage when it’s common to see incomplete tasks.
He wrote that Magnolia “engaged their insurer to facilitate an appropriate review of the situation. That process is ongoing.”
CBC asked Peloso for copies of routine inspections during the contract period, but did not receive them.
In his statement, Peloso said “an inspection was done” by the City of Ottawa and “the renovation passed.” He did not specify when it was carried out, and said he’s “pursuing documented proof” of that inspection through the courts.
The City of Ottawa, listed as a defendant in Alp’s claim, declined to comment on the ongoing legal matter, but in a general statement it said it doesn’t license or certify contractors.
“[Building Code Services] may issue provincial offence notices, a suite of orders, and prosecution.… Penalties may increase for repeat offences,” wrote deputy chief building official Scott Lockhart.
Subcontractor sues
CBC reviewed nine civil claims filed in 2024 and 2025 that were active as of Nov. 28, and which involved Peloso and Magnolia, listed in those claims under various entities including Magnolia Design & Build Inc., Magnolia Construction Ltd., 11176692 Canada Inc. (or Magnolia Renovations) and 1000639856 Ontario Inc.
CBC reviewed three other cases where a judge gave default or consent judgments against Peloso and Magnolia, ordering payments up to $337,967 to the plaintiffs in one case, plus a couple more cases that were discontinued.
In his statement, Peloso said several of the active lawsuits are resolved or in the process of being resolved, suggesting they have yet to be updated in court.
Victoria Boddy, a lawyer with MBC Law Professional Corporation, represents one of those subcontractors involved in a legal dispute with Magnolia.
“Magnolia and Mr. Peloso have a reputation within the Ottawa construction legal world,” Boddy said.
Boddy said her client Jeff Richard Contracting Inc. was hired by Magnolia and owed $45,409.05 for several construction projects, and reached a settlement in April 2024 for non-payment.
Peloso agreed to pay her client for the previous jobs, plus interest and legal costs, in weekly instalments of $2,000.
But according to a November 2024 court application, Peloso and Magnolia defaulted on their payments intermittently.
This February, a judge ordered Peloso to pay Boddy’s client the remainder of $32,349.96, plus interest and costs.
Boddy said her client received one e-transfer of $2,000 in late November, but was still owed $41,391.28 as of Monday, including interest and garnishment disbursements.
“Our client is extremely frustrated, extremely upset. He would like nothing more than to just be paid,” Boddy told CBC.
Regarding this matter, Peloso wrote that “there was an error that resulted in delayed payments,” and that payments have since resumed.
Regulations, standards for contractors lacking
Alp explained she believed Magnolia was a trustworthy company, in part because it advertised its membership with the Greater Ottawa Home Builders’ Association (GOHBA), which advocates for and represents members in construction and development, and GOHBA’s affiliated RenoMark verification program which aims to help homeowners find ethical contractors for projects.
In a statement, Peloso said at the time the proposal was sent to Alp, Magnolia was a member of GOHBA and RenoMark.
GOHBA’s executive director Jason Burggraaf told CBC Magnolia’s membership was renewed in October 2023, but membership fees “were never paid” so it was terminated in April 2024.
Magnolia advertised on its website it was affiliated with GOHBA until this Nov. 19, when GOHBA said it had sent a cease and desist letter to remove the association’s logo from the company’s website.
On Nov. 25, Peloso said Magnolia is currently a member of HomeStars, an online platform that connects homeowners to reviewed professionals.
A spokesperson for HomeStars told CBC an account for Magnolia Construction was active from May 2020 to May 2023, and reactivated on Nov. 21 this year.
HomeStars said it had placed the account under temporary suspension while under review. The company said accounts may be suspended or removed if found to be in breach of its professional agreement.
Burggraaf said his advice to customers is to always get things in writing, and speak with the contractor’s references from recent jobs. He added contractors should include payment schedules and time frames, and should have “no ambiguity about who is doing what.”
“Then you have a legal document to fall back on if for whatever reason, a project happens to go awry,” he said, adding that going to civil court is often the main recourse for customers.
Peloso said he made “mistakes” when he “was younger.”
“I took responsibility and rebuilt my life from the ground up,” Peloso’s statement reads.
“Because of that history, I have always understood that my business would not be given the benefit of the doubt and that I would need to operate with the highest standards of professionalism, transparency, and accountability.”
He added that he’s invested in “rigorous quality expectations to ensure this company meets industry standards.”
When asked by CBC if the “mistakes” and “history” refer to previous 2010 convictions related to possession and laundering proceeds of crime, Peloso acknowledged it, adding that he’s since “undertaken a number of charitable activities” to give back to the community.
