Help protect yourself and your home by knowing your rights before starting a home renovation.
Before hiring a contractor make sure you know exactly what you want done and how much you want to spend. Make an itemized list and be clear about your budget. Remember that changing plans in the middle of a project will cost money and may cause headaches for you as well the contractor.
If it’s a major project, you might need an architect or engineer to draw up plans and provide guidance on the how to approach the renovation. You will also likely have to get a building permit. Always check with your city or town hall how much permits will cost, and what you will need to do to get them, before you sign a home renovation contract.
Here are some things to keep in mind when hiring a contractor:
Ask for recommendations from friends and neighbours and consider dealing with a local firm. Working with a company that is close by may make it easier to obtain and check references, enforce a warranty or arrange for any follow-up work.
Obtain written estimates from three contractors that include a description of the work to be done, an itemized list of products and services and their prices. Never accept an estimate over the phone or without the contractor inspecting the area. And don’t go for a deal that sounds too good to be true
Obtain references both from the recent past and further back in time. Sometimes, problems do not surface for a while. For example, most roofing and paving problems appear about a year or more after a project is completed
Remember that good contractors ask a lot of questions in order to understand the work that needs to be done. For example, in driveway paving, they should ask if any heavy vehicles will be parked on the driveway
Check our Consumer Beware List to see if there are any complaints on file against the contractor. Better Business Bureaus, Chambers of Commerce, local licensing commissions and municipal building inspectors also keep records on contractors. Check with all of these organizations
Get a written contract before any work begins and make sure it includes the name and address of the contractor as well as all the key details about the work to be done and the warranty. Make sure that any changes to the contract are agreed to in writing by both you and your contractor. Be prepared to pay for any extra materials or any work that are not in the contract
Keep down-payments to a minimum (we recommend no more than 10 per cent). Never pay the full amount of the contract before the work is completed. This helps to ensure that the contractor will finish the job and protects you from financial loss if the company goes out of business or declares bankruptcy before completing the work
Talk to your contractor about how you will deal with any disagreements or disputes that may arise. Ideally, this should be addressed in your contract.
Avoid cash deals. Reputable companies meet all legal requirements, like charging and paying applicable taxes. If you do pay in cash, make sure that you get a detailed, signed receipt from the contractor. Remember, it’s always best to keep a record of payment. Also, if a contractor offers you financing, keep in mind that it may be wiser to arrange your own. This may save you interest charges and help you control payments.
When planning a home renovation, you should always get at least three estimates from different contractors.
Once you select a contractor, make sure he or she includes the estimate as part of your contract. This way, the contractor cannot charge you more than 10 per cent above the estimated cost – unless you have agreed to new work or a new price and have signed a change to your contract.
Under Ontario law, any home renovation contract worth more than $50 must be in writing.
Before signing your contract, make sure that everything you’re expecting the contractor to do is listed. If it isn't set out in the contract in writing, you may not get it. Make sure your contract includes:
the contractor’s name, address and contact information
a thorough description of the project with details of the work to be done and the materials to be used
the total cost and terms of payment
a work schedule, including start and completion dates
a payment schedule, including the deposit price
who is responsible for clean up after the job is finished
all sub-trades that will be contracted out and who will pay for those sub-trades
your cancellation rights.
Under the Consumer Protection Act, 2002, if an estimate is included as part of a home renovation contract, the final price for all goods and services cannot be more than 10 per cent over the original estimate. This means that it’s important for you to insist that the written estimate be part of your contract. If new work comes up, your contractor should discuss it with you and ask you to approve and sign a change to the contract that includes a new estimate.
The Construction Lien Act allows you to retain 10 per cent of the contract price for 45 days after the project is done to ensure the quality of the work. This also protects you in case the contractor doesn’t pay sub-trades and suppliers involved in your project.
For major renovation work, it’s best to have a lawyer go over your contract, explain it to you and advise you on your rights before you sign.
Before signing a contract, be sure to check with your city or town hall whether you will need a building permit. It’s your responsibility to get building permits and meet any legal requirements you’ll need to renovate. If you want the contractor to get permits on your behalf, make sure it’s is spelled out in the contract and don’t allow construction to begin until you’ve seen it.
For some major projects you may also have to obtain a variance from zoning requirements, which allows exceptions to land use restrictions. This can involve several steps, which can add to the cost of your renovation.
Identify any grants or tax credits that may apply and make sure that you are eligible. Check with the government ministry, department or agency offering the tax credit or grant.
Check warranties and guarantees carefully. The contractor’s reputation and length of time in business are more important than a warranty or guarantee. A “10-year” guarantee is worthless if the contractor goes out of business next month.
If you make a purchase or sign a contract in your home that’s more than $50, you have the right to cancel within 10 days for any reason and without having to pay any cancellation fees. However, if you solicited the contractor and the work was started within this 10-day period, you can cancel the contract, but you will be liable for reasonable compensation for work and materials that the contractor has provided.
If you want to file a complaint about a contractor, go to our Filing a Complaint page.
We hear a lot of complaints about home renovations and repairs. Being aware of these common consumer complaints will help you protect your renovation dollars:
A common sales ploy in the home repair business is the offer of a “good deal” by a door-to-door seller because “we just happen to be in the neighbourhood with all our material and equipment.” The contract usually must be signed right away to get the special price. Don’t fall for this high-pressure sales tactic.
There are other door-to-door tricks to watch for. A salesperson may offer to “inspect” your furnace, chimney or roof, free of charge. Afterwards, you are told that immediate and expensive repair work must be done. Of course, the individual offers to do the work and has a contract ready for you to sign. If you suspect repairs are necessary, choose your own company. Don’t be tempted to sign just because someone is already at your house.
Never let a contractor talk you into making a large down payment “to pay for materials.” This could leave you vulnerable to contractors who cash in a deposit and never complete – or even begin – the job they were hired to do.
Keep down-payments to a minimum (we recommend about 10 per cent) and never pay the full amount of the contract before the work is completed. This also protects you from financial loss if the company declares bankruptcy before completing the work.
Remember, legitimate home renovation companies have enough credit to buy the materials they need.
Not having the right paperwork – estimates, contracts, professional licences, building permits – can be a warning sign that a contractor is not reputable.
A contract is your best protection as a consumer. It’s also a good idea to avoid cash deals. Although they can be appealing, if anything goes wrong with your project, you won’t have proof of payment without a receipt. Remember, reputable companies comply with the law. A professional licence shows that a contractor is qualified to do the work you’re hiring him or her to do – like plumbing or electrical. Building permits allow your municipality to make sure that any work you have planned meets the Building Code standards and bylaws.