Imagine pouring your life savings into a dream kitchen renovation, only to watch it turn into a $381,000 nightmare – complete with flooding and structural damage. That's exactly what happened to one Ottawa couple, and their story is a stark warning for anyone considering hiring a contractor. Katy Alp and her husband Kaveh Afshar-Zanjani are now embroiled in a legal battle after what they describe as a disastrous experience with Giuseppe "Joey" Peloso, who operates Magnolia Design & Build (also known as Magnolia Construction).
The couple hired Magnolia in 2023 to transform their outdated kitchen, shelling out a substantial $117,064.80. Work commenced in March 2024 and dragged on until October 2024. Alp claims that a mere six weeks after the project's supposed completion, a plumbing connection to the sink supply line catastrophically failed while they were away for a weekend. "There was water running everywhere through our kitchen… Our basement had about three inches of water in it, from corner to corner," she recounted. The damage was so extensive that both the kitchen and basement had to be completely redone. "It was heartbreaking," Alp stated, a sentiment any homeowner can surely relate to.
In their August 2025 civil claim, Alp and Afshar-Zanjani are seeking a staggering $381,979.02 in damages, plus punitive damages. This hefty sum encompasses their initial payment to Magnolia, the costs of hiring other contractors to rectify the shoddy work and perform necessary remediation, the loss of personal belongings ruined by the flooding, and the expense of securing temporary housing while their home was uninhabitable. But here's where it gets controversial... this isn't an isolated incident.
Multiple lawsuits have been filed against Peloso and Magnolia in recent years, painting a concerning picture. The plaintiffs include not only disgruntled customers, but also subcontractors, investors, businesses, a tenant, and even two foreign entities – the Embassy of Niger and the Republic of Austria. This raises a critical question: How could so many different parties have negative experiences with the same contractor?
Peloso declined a direct interview, but issued a statement through Ottawa public relations agency Syntax Strategic. He asserted that he takes client concerns seriously, but that legal disputes are an unavoidable reality in the construction industry. "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. He essentially argues that disputes are simply part of doing business, especially with a high volume of projects.
However, the couple's claim goes further than just alleging a simple dispute. They contend that Magnolia's work was "entirely deficient and failed to meet the contractual and regulatory requirements including the Ontario Building Code." This suggests a systemic failure to adhere to basic construction standards, which is a far more serious accusation. Peloso and his company filed a notice of intent to defend on Nov. 19, firmly stating that he "does not agree with the description of the workmanship" and that they "reject the basis of the claims made against Magnolia." He also pointed out that his company has completed over 400 renovation projects in the Ottawa region in the last three years, with the majority resulting in "customers’ full satisfaction." Bedard Plumbing Services, the subcontractor also named as a defendant, declined to comment.
Alp stated that she raised concerns with Magnolia during the renovation process itself. "We realized things weren't being done properly. Plumbing was in the wrong spot, electrical in the wrong spot," she explained, adding that Peloso was initially "very responsive" and sent people to fix problems. Peloso, however, claims that Alp never raised significant electrical or piping concerns beyond standard adjustments. The lawsuit alleges that the project, initially slated for two months, stretched to six due to Magnolia's "lack of project management and supervision, coordination and quality control." Peloso countered that the delays were "outside Magnolia’s control" and were communicated to the customer, claiming the project was "substantially" completed by June.
And this is the part most people miss... the importance of inspections. Following the flooding, Alp requested copies of inspection reports from the City of Ottawa, as Magnolia had assured her that all necessary inspections had been conducted. Magnolia failed to provide these reports, prompting Alp to arrange an inspection herself. The resulting report, dated December 2024 and reviewed by CBC, was damning: "No inspections on record." Further, it listed a litany of failures: Plumbing Underground, Plumbing Rough-in, HVAC Rough-in, Framing, Plumbing Final, and Building Final – all marked as "Failed." The inspector's instruction was blunt: "Correct all deficiencies."
"I was flabbergasted because I was told by Magnolia that inspections were happening," Alp told CBC. The lawsuit further alleges that subsequent investigations revealed framing that was "not structurally sound," cut joists causing "additional structural damage," crooked windows, improperly installed range hood ventilation, and exposed live wires, among other issues. Peloso "rejects claims against the structural integrity of the project," stating that Magnolia works to address any deficiencies and that some observations were made in the pre-final stage when incomplete tasks are common. He added that Magnolia has engaged their insurer to review the situation. CBC's request for copies of routine inspections during the contract period went unanswered.
Peloso maintains that "an inspection was done" by the City of Ottawa and "the renovation passed," although he did not specify when this occurred and stated he is "pursuing documented proof" through the courts. The City of Ottawa, also listed as a defendant in Alp's claim, declined to comment on the ongoing legal matter, but clarified that it does not license or certify contractors. Deputy Chief Building Official Scott Lockhart emphasized that Building Code Services can issue provincial offence notices, orders, and prosecutions, with penalties escalating for repeat offences.
CBC reviewed nine civil claims filed in 2024 and 2025 involving Peloso and Magnolia (under various entity names), as well as three cases where default or consent judgments were issued against them, ordering payments up to $337,967. In his statement, Peloso suggested that several of the active lawsuits are either resolved or in the process of being resolved, but haven't been updated in court records. Victoria Boddy, a lawyer representing a subcontractor involved in a dispute with Magnolia, stated that "Magnolia and Mr. Peloso have a reputation within the Ottawa construction legal world." Her client, Jeff Richard Contracting Inc., was allegedly owed $45,409.05 by Magnolia and reached a settlement for non-payment in April 2024, with Peloso agreeing to weekly installments of $2,000. However, according to a November 2024 court application, Peloso and Magnolia allegedly defaulted on these payments. A judge ordered Peloso to pay the remaining balance, but Boddy stated that her client is still owed a significant sum, including interest and garnishment disbursements. Regarding this, Peloso claimed "there was an error that resulted in delayed payments" and that payments have since resumed.
Alp believed Magnolia was trustworthy due to its advertised membership with the Greater Ottawa Home Builders’ Association (GOHBA) and its RenoMark verification program. Peloso stated that Magnolia was a member of both organizations when the proposal was sent to Alp. However, GOHBA's executive director Jason Burggraaf clarified that Magnolia's membership was terminated in April 2024 due to unpaid fees. Magnolia continued to advertise its affiliation with GOHBA until November 19, when GOHBA issued a cease and desist letter. As of November 25, Peloso stated that Magnolia is a member of HomeStars, an online platform connecting homeowners with reviewed professionals. HomeStars confirmed that Magnolia's account was active from May 2020 to May 2023, reactivated on November 21, and is currently under temporary suspension while under review.
Burggraaf advises customers to always get everything in writing, check references from recent jobs, and ensure contracts include clear payment schedules, time frames, and responsibilities. He emphasizes that a well-defined contract is crucial for legal recourse if a project goes wrong.
Peloso acknowledged that he made "mistakes" when he "was younger," stating he has "rebuilt my life from the ground up" and operates with "the highest standards of professionalism, transparency, and accountability." He also mentioned investing in "rigorous quality expectations." When asked if the "mistakes" and "history" referred to previous 2010 convictions related to possession and laundering proceeds of crime, Peloso acknowledged it, adding that he has since "undertaken a number of charitable activities."
This case highlights the potential pitfalls of home renovations and the importance of due diligence when hiring a contractor. It also raises a crucial question: Should there be stricter regulations and licensing requirements for contractors to protect homeowners from unscrupulous practices? What are your thoughts on the level of consumer protection in the home renovation industry? Have you had any similar experiences, good or bad, with contractors? Share your stories and opinions in the comments below!
