Don’t be a victim: Protect yourself when starting home renovations
The Ontario Ministry of Government and Consumer Services provides tips on how to avoid common home renovation pitfalls.
Help protect yourself and your home by knowing your rights before starting a home renovation. Learn how to hire a reliable contractor and see what you need to include in your contract with them.
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?
When you are looking to hire a contractor make sure to:
Make a list of exactly what you want done. Remember that changing plans in the middle of a project will cost extra money. Set a clear budget. Ask for recommendations from friends and neighbours.
Deal 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 three contractors.
Never accept an estimate over the phone or without the contractor inspecting the area.
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.
Do not go for a deal that sounds too good to be true.
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 municipality how much building permits cost and how to get them.
Learn about common home renovation scams.
Always get at least three 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.
Before you sign a contract for home renovations or repairs, remember to:
Check with the Better Business Bureau, chambers of commerce and your city for any information they may have on the contractor.
Get a written estimate and contract before any work begins.
Keep down-payments to a minimum -- no more than 10 per cent.
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.
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 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.
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.
Under the Construction Lien Act you can retain 10 per cent 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.
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.
Signing a contract in
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.
Beware of the scams
The door-to-door scam: 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.
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 he or she was hired to do.
Remember, legitimate home renovation companies have enough credit to buy the materials they need.
Not having the right paperwork – estimates, contracts, professional licences, building per- mits – 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. Building permits allow your municipality to make sure that any work you have planned meets the Building Code standards and by-laws.
Never be pressured into accepting special limited-time “deals” Remember that a cost over-run cannot be more than 10% of the original estimate
After you have signed a contract, you can change your mind within 10 days
SOMETHING HAS TO GIVE: A visible crack in an old house need not be a deal breaker if the home is up for sale. Most houses are going to shift over time. However, any signs of major structural movement ought to be inspected.