Knowing these 10 tips for home renovation in Ontario before starting your home renovation project can save you thousands of dollars
If you plan starting your home renovation project, knowing about these 10 things can help you save thousands of dollars.
Protect yourself, your family, your health, your home, and your money by knowing your rights before starting a home renovation project. Learn how to hire a reliable contractor and see what you need to include in your contract with them.
Seven things to consider BEFORE hiring a contractor
When you are looking to hire a contractor make sure to:
- Make a list of exactly what you want to be done. Remember that changing plans in the middle of a project will cost extra money.
- Ask for recommendations from friends and neighbours
- Consider dealing with a local company. This may make it easier to check references, enforce a warranty or have follow-up work done.
- Get written estimates from at least 3 contractors
- Never accept an estimate over the phone
- Remember that good contractors ask a lot of questions so they can understand and plan out the project. For example, in driveway paving, they should ask if any heavy vehicles will be parked on the driveway
- Never go for a deal that sounds too good to be true
Know your rights BEFORE starting a home renovation!
1. Four things you should do once you have a contractor in mind
1. Ask the right questions
- Can I get references from people who have had a similar work done in their homes?
- Will my estimate be included as part of my contract?
- Will you get any building permits on my behalf? Can you say so in my contract?
- How will we handle any disagreements or disputes? Can you include that in the contract?
- If I cancel my contract after the work is started, will I have to pay for any work or materials?
2. Check contractor’s reputation
A single business operator may run several businesses or change a business’ name. So remember to search for the business and the business operator’s name:
- in the Consumer Beware List to see if there are any complaints or charges against the contractor
- in recent postings of charges and convictions under the Consumer Protection Act
- with the Better Business Bureau, Chambers of Commerce and your city for any information they may have on the contractor
3. Check Ontario’s Consumer Beware List
Check a business’ track record before dealing with them by searching Ontario’s Consumer Beware List or reading recent convictions and compliance notices. The Ministry of Government and Consumer Services maintains this searchable list of businesses that have either:
- not answered to the ministry after they were sent 2 notifications about a consumer complaint
- been charged or convicted in relation to the Consumer Protection Act or other acts of the ministry
Information about a business will remain on the Consumer Beware List between 21 to 27 months.
4. Check references
Always get at least 3 references and check them, even if someone you know has recommended the contractor to you. Make sure each reference is from someone who has dealt with the contractor personally. Get references from people who had work done that is similar to the project you have in mind. Also, get references both from the recent past and further back in time. Sometimes, problems do not show up for a while. For example, you often don’t see problems in roofing or paving for about a year or more after a project is done.
2. Make estimates in writing and include them in your contract
Make estimates in writing. Estimates should have a description of the work to be done, an itemized list of products and services and their prices. Make sure that everything you’re expecting is listed.
Always get at least 3 written estimates from different contractors.
Under the Consumer Protection Act (CPA) 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% over the original estimate unless you have agreed to new work or a new price.
This means that it’s important for you to insist that the written estimate is included in 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, including a new estimate.
3. Your home renovation contract must be in writing – it’s the law!
Under Ontario law, any home renovation contract worth more than $50 must be in writing. Be prepared to pay for any extra materials or any work that are not in the contract. If something isn’t written in your contract, you may not get it.
Make sure your written 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
- a clear description of any warranties
- the total cost and terms of payment
- a work schedule, including start and completion dates
- a payment schedule, including the deposit amount
- 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
Once you select a contractor, make sure they include the estimate as part of your contract. This way, the contractor cannot charge you more than 10% above the estimated cost – unless you have agreed to new work or a new price and have signed a change to your contract.
It’s best to have a lawyer go over your contract, explain it to you and advise you on your rights before you sign.
4. Crucial importance of knowing correct contractor’s business name, address and contacts
Knowing correct contractor’s business name, address, and contacts is of crucial importance. Remember, if something wrong happens on the way, without this information you will not be able to file a claim in small claims court.
5. Keep down-payments to a minimum and never pay the full amount before the work is done
Before you sign a contract for home renovations or repairs, make sure you:
- keep down-payments to a minimum (no more than 10% is recommend)
- never pay the full amount of the contract before the work is done. This will help ensure that the contractor will finish the job. It will also protect you from losing money if the company goes out of business or declares bankruptcy before finishing your project
- talk to your contractor about how you will deal with any disagreements or disputes. Ideally, this should be addressed in your contract.
- check warranties and guarantees carefully. But remember that the contractor’s reputation and length of time in business are more important than a warranty or guarantee
- 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
- if a contractor offers you financing, it may be wiser to arrange your own
6. 10% Rule for home renovation contracts
What is it all about? To make it short, it’s about including a detailed written estimate in your home renovation contract.
If an estimate is included as part of the contract, the final price for all goods and services cannot be more than 10% above the original estimate, unless you agree to a new price. If it’s the case, it also must be done in writing, with the date and as a change to the contract.
If you are charged more than 10% above a written estimate without agreeing to it, you can demand that the final price be adjusted. If your contractor refuses to adjust the price, you can file a complaint with the Ministry of Government and Consumer Services of Ontario.
7. You can retain 10% of the contract price for 45 days after the project is done
You can retain 10% of the contract price for 45 days after the project is done. This helps ensure the quality of the work. It also protects you in case the contractor doesn’t pay the sub-trades or suppliers working on your project.
8. A 10 calendar-day cooling-off period for contracts signed in your home
If you sign a home renovation or repair contract worth $50 or more in your home, you have the right to a 10 calendar-day cooling-off period. You may cancel this contract for any reason and without having to pay any cancellation fees within these 10 days.
However, if you hire a contractor and the work was started during the cooling-off period, you can cancel the contract but you will be responsible for reasonable compensation for work and materials that the contractor has provided.
9. Getting building permits is your responsibility
If it’s a major project, you might need an architect or engineer to draw up plans and give direction. You will also likely have to get a building permit. Ask your city or town hall how much building permits cost and how to get them. It’s your responsibility to get building permits
So, if you are doing major renovation work:
- 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 them.
- Check with your city about zoning by-laws and rules.
Building permits allow your municipality to make sure that any work you have planned meets the Building Code standards and by-laws.
10. Checking your eligibility for a government rebate or credit is your responsibility
If your contractor has told you that the work being done qualifies for a government rebate or credit, it is your responsibility to make sure that you qualify for it. Check with the government ministry, department or agency offering the tax credit, rebate or grant.
A few more tips
Beware of the disappearing contractors
Never let a contractor talk you into making a large down payment “to pay for materials.” The contractor may cash in the deposit and never finish – or even begin – the job they were hired to do. Keep down-payments to a minimum (10% is recommend) and never pay the full amount of the contract before the work is all done. Remember, legitimate home renovation companies have enough credit to buy the materials they need.
Beware of the door-to-door game
In this scam, a door-to-door salesperson offers you a “good deal” because “we just happen to be in the neighbourhood with all our material and equipment.” The contract usually has to be signed right away to get the special price. Or, 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. The individual then offers to do the work and has a contract ready for you to sign.
Avoid cash deals
Not having the right paperwork – estimates, contracts, professional licences, building permits – is 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.
Do your homework. Make a list of exactly what you want to be done. Discuss everything with your contractor. Make sure that everything you are expecting is agreed upon and listed in the contract.
It is of crucial importance for you to insist that the written estimates are included in your contract. Estimates should be made in detail, have a description of the work to be done, and include an itemized list of products and services to be delivered and their prices.
If new work comes up, your contractor should discuss it with you and ask you to approve and sign a change to the contract, including a new estimate.
Remember that changing plans in the middle of a project will cost extra money.