Crews at the home at 63 Maria St., near Runnymede Road and Dundas Street West, were excavating the basement Wednesday when it became apparent late in the afternoon that the house was off-kilter.
Firefighters arrived at the scene after a neighbour called 911.
The house was then evacuated, as were four neighbouring properties on each side.
A fence was erected around the house, and demolition took place Friday morning. The homeowner, who did not want to speak to CBC News, was not allowed to return to the house because officials said it was too dangerous.
According to public property records, the house was bought in May 2011 for $555,063, with a mortgage of $440,000.
FBR Waterproofing Inc. had been underpinning the basement.
The work started earlier this week before the house shifted on Wednesday, and an employee told CBC News that they did everything by the book, including consulting an engineer. They also had permits for the job and liability insurance, CBC reporter Lucy Lopez said.
Lopez said the company told her they feel serious concern and are trying to figure out how to help the homeowner.
"I don't want to speculate and say it's a contractor error," Mark Sraga, a building official with the City of Toronto, said Thursday. "We're not sure exactly what occurred.… From what we've seen, they did have permits to do the work, which is the first step of a responsible contractor."
Two investigators from Ontario's Ministry of Labour have also been at the scene.