In short
- A home renovation contract over $50 must be in writing under Ontario law.
- With the estimate inside the contract, the final price cannot exceed it by more than 10% unless you sign a change.
- Signed in your home? You have a 10 calendar-day cooling-off period to cancel for any reason.
- Ontario recommends a deposit of no more than 10% and no full payment before the work is done.
- Ontario homeowners generally hold back 10% of each payment under the Construction Act; lien claims have a 60-day window.
What the law puts on paper
Ontario’s page on renovation rights is specific. Any home renovation contract worth more than $50 must be in writing. If something is missing from the written contract, you may not get it. The contract should carry eight things:
- the contractor’s name, address and contact information;
- a thorough description of the project, with the work to be done and the materials to be used;
- a clear description of any warranties;
- the total cost and the terms of payment;
- a work schedule, with start and completion dates;
- a payment schedule, including the deposit amount;
- who is responsible for clean-up after the job;
- all sub-trades that will be contracted out and who pays for them.
Check each against the draft. A blank is a question for the company.
Estimate, contract and the 10% cap
The estimate and the contract are two documents until you tie them together. Ontario says the estimate should describe the work, list products and services and give their prices, and that you should insist the written estimate becomes part of the contract. Then the Consumer Protection Act caps the final price at 10% above that estimate unless you agreed to new work or a new price in a signed change. A $40,000 estimate allows $44,000 at most without a signed change.
Look at how the estimate treats allowances. An allowance is a placeholder amount, for tile or a vanity, that you finish choosing later. If your choice costs more, the difference is yours. Ask which lines are fixed prices and which are allowances. The cost ranges in renovation cost in Ottawa help judge whether an allowance is realistic.
Deposit and payments
Ontario recommends that down-payments stay at a minimum, no more than 10%, and that you never pay the full amount before the work is done. Link payments to stages in the payment schedule: after demolition, after rough-in inspection, after finishes, on completion. If a contractor offers financing, Ontario says it may be wiser to arrange your own.
Holdback in plain terms
Ontario’s Construction Act asks owners to hold back 10% of each payment. A construction-law summary says the rule applies to home renovations whether the contract pays in instalments or only on completion, and that lien claims must be registered within 60 days. The holdback gives an unpaid subcontractor money to claim against, which keeps the claim away from your house. This is a secondary summary, so have a lawyer confirm how it applies to your payment schedule. Ontario itself says that for major renovation work a lawyer should read the contract before you sign.
Permits and rebates in the contract
The homeowner is responsible for building permits. If the contractor gets them, the contract says so, and the Ontario page advises that you see the permit before construction begins. The City fee is $12.75 per $1,000 of work, minimum $117, so ask whether it is in the price. See renovation permits in Ottawa. For checks on the company itself, use hiring a renovation contractor.
Who you sign with
The contract is between you and the one independent company that receives your request. This page is general information, and legal advice comes from a lawyer. Read the paper before you sign, and ask for anything the list above shows missing.
Questions to ask the company
- Is my written estimate part of the contract, line by line?
- Which items are fixed prices and which are allowances?
- What are the start date, the completion date and the payment schedule?
- Which sub-trades do you hire, and who pays them?
- Who handles the clean-up when the work ends?
Have this ready for the call
- Your own scope sheet: rooms, what moves, finishes, brands or model numbers
- Finishes you will buy yourself, such as appliances
- Your budget ceiling and the deposit you are willing to pay
- Dates you need the work to start and end
Questions people ask
What does the 10% rule mean in practice?
If the written estimate is part of the contract, Ontario’s Consumer Protection Act caps the final price at 10% above it, unless you agree to new work or a new price and sign a change to the contract. On a $30,000 estimate the ceiling is $33,000. If the estimate sits outside the contract, the cap may not apply.
Can I cancel after signing?
A contract signed in your home has a 10 calendar-day cooling-off period and can be cancelled for any reason without fees. If the work already started in those days, you owe reasonable compensation for work and materials provided. Send the cancellation by email or registered mail and keep a copy.
What if the contractor does not start on the promised date?
Under the Consumer Protection Act the business has 30 days from the delivery date in the contract, or 30 days from signing if no date is given. If it has not started by then, you can cancel before the work begins. After you accept the late delivery, the right to cancel on that ground is lost.
What is a holdback?
Under Ontario’s Construction Act the owner keeps back 10% of each payment for a set period so that unpaid subcontractors can make lien claims against the holdback. A construction-law summary puts the lien registration window at 60 days. Ask your lawyer how it applies to your payment schedule.
How should a change to the work be recorded?
Ontario says that when new work comes up, the contractor should discuss it with you and ask you to approve and sign a change to the contract, with a new estimate. Without that signature, the 10% cap on the final price still protects you. Anything missing from the contract may not be done, so write it in.
Who is responsible if the contractor says a rebate applies?
Ontario’s page says it is your responsibility to make sure you qualify for a government rebate or credit, even when the contractor told you the work does. Check with the ministry, department or agency that offers it before building the rebate into your budget, and ask what paperwork the company will give you.
