Home renovations made simple
How do you find a home renovation contractor you can trust? With Canadian contractors in high demand throughout Canada, it’s tempting to hire the first contractor who has any availability, but taking the time to compare quotes and vet your contractor is well worth the extra effort. To ensure the success of your renovation, you will want to ask careful questions upfront, protect your financial interests, and read your contract agreement thoroughly.
Smart Reno requires contractors to meet five key criteria for trustworthiness: current licence, valid insurance, a clean background check, glowing customer reviews, and a portfolio of relevant experience. As the homeowner, you are still responsible for your own contract. For the safety of your renovation, you will want to ask some important questions upfront, protect your financial interests, and read your contract agreement thoroughly.
Questions to ask your contractor before starting your project
Ensure the success of your renovation by asking your contractor questions about their business practices, licensure, and professional history before signing a contract agreement. Use the questions below to guide your interview.
Can I see a copy of your licence?
Ask this even if your contractor does not require a licence in your province or territory. Having a licence to practice keeps your home contractor accountable to the safety and competency standards of their professional regulatory organization. All Smart Reno contractors are licensed and verified, but it is still a good practice to ask for documentation.
What is a realistic timeline for this project?
Get a specific timeline for the completion of your home renovation before signing your contract agreement. If your contractor cannot give you a definite completion time due to lockdowns and disruptions in the supply chain, make sure that your contract ties your payments to the achievement of project milestones rather than to set calendar dates. Don’t pay for contract work that has not yet been completed.
Can I see your contractor liability insurance?
Your contractor should carry insurance that covers both the possibility of property damage and the threat of injury to workers employed during the completion of your project. Ask to see their builder’s risk insurance as well as their letter of clearance from the provincial worker’s compensation board. If your contractor does not carry both types of insurance, you may be liable for workers injured or property damaged during your home renovation.
Will you obtain a building permit required for this job?
If a building permit is required for the work, you can discuss with the contractor whether they will file for the permit or if you will need to. If your contractor says you do not need a permit, get a second opinion from your local permit-issuing authority for the success of your renovation.
What is the payment schedule?
As discussed above, tie payments to completed components of your home renovation instead of scheduling payments on specific dates.
How can you take action to protect my property?
Qualified and reliable contractors will have a plan in place to prevent burglaries and damage to your property during your home renovation. Fire extinguishers should be located at key points throughout the work site. If part of your home is left exposed at night during the renovation, security cameras or motion-activated lights may be required to protect against break-ins. Ask your contractor about water damage precautions as well. Above all, ensure that your contractor carries insurance for property damage as well as worker injuries.
Do you offer a warranty or guarantee for your service or materials? If so, for how long?
Some contractors include a warranty in their contract. These warranties offer the full replacement value of your project for a specified number of years after completion. Make sure that your contractor clarifies how much you will be reimbursed throughout your warranty period as well as whether both labour and materials costs are included.
Can I see previous similar projects you have completed?
Your contractor should be able to provide you with details of completed projects similar to your own in price and outcome. Ideally, they should also have reviews from satisfied customers. A good contractor will have a proven track record of delivering quality home renovations. You can view any available ratings from previous customers for your Smart Reno Approved contractor when you log in to the Smart Reno Homeowner dashboard.
Developing your renovation budget is not the only financial consideration you should account for when hiring a contractor. Protect yourself from hidden costs and financial exploitation by making an appropriate down payment, comparing quotes, and avoiding extra supplier fees.
Down payments are common in renovation contracts; they signify your commitment to do your renovation and enable your contractor to book their subcontractors and purchase some materials in advance. If your contractor asks for a down payment greater than 15% of the value of your home renovation, it’s important to understand why, and decide whether you are comfortable with the financial risk you are taking. The province of Ontario recommends a down payment of no more than 10% of the value of the project. This is because your deposit is often non-refundable according to the terms of your contract—paying more than ten or fifteen percent of the full cost increases your personal financial risk. As with anything else in life, never take more risk than you are comfortable with.
Selecting the best quote
Obtaining at least three quotes allows you to compare contractors, choosing the best fit for your home renovation. The lowest quote is not always the right option for your project. When two contractors offer you similar rates, and the third contractor names a dramatically lower price, that should set off alarm bells. Ensure each quote has the same scope, and that you discuss in advance how changes will be managed – some contractors might give you a lower quote, but have not considered the same scope of work, which may cause you to pay more over the course of the project.
Avoid hidden fees for renovation materials
The price of lumber is continuing to rise as of May 2021. Now more than ever, you do not want to pay for more materials than you expected. If your contract includes a notice of disclosure, you may find yourself doing just that—because your contractor is obtaining supplies through a third party.
How to read and understand your contract
Take a two-step approach to reading your contract. First, skim through for major red flags. Address vagueness, inconsistencies, and outright avoidance of keeping proper records.
Once you have that under control, flip the script. Determine whether the provisions you want to see are present in your contract. If you can’t find them, advocate for their inclusion.
Not sure where to start? Read below for common red flags, and for examples of good provisions to include in a contract.
Uncertain termination and renewal terms leave you with an open-ended project. Your contract should contain conditions for canceling your home renovation project, including who to notify and how far in advance a termination notice should be filed.
Blank spaces are often present in computer-generated contracts. Consider deleting or filling in these spaces before the contract is signed. Otherwise, changes could be made to the signed contract without your knowledge.
Vague confidentiality provisions are never a good sign. Your contract should explicitly state that your contractor cannot share your personal and private information without your express permission.
Vague project descriptions do not hold your contractor accountable for each specific step in your home renovation. Project milestones should be described in detail in your contract.
Cash deals for home renovation work are advised against by the Ontario government. If your contractor does require a cash transaction, they should write the reason into the contract agreement and provide you with a receipt.
Include dispute negotiations in your contract. If a disagreement between you and your contractor cannot be resolved, calling in a third-party mediator can achieve a fair solution without resorting to litigation.
Default terms outline what happens if either party in a contract agreement does not fulfill their obligations. Avoid an accidental breach of contract by understanding your responsibilities and make sure your contractor is required to hold up their end of the bargain.
Proof of insurance policy protects you from being liable for property damages and worker injuries. Look for proof of insurance in the contract even if your contractor showed you their papers upfront.
Clear payment schedules are key to the successful completion of your home renovation. Specify payment milestones within your contract and clarify that payments are due after milestones are achieved.
Review your contract multiple times. Have friends and family read it over to see if they catch anything you missed.
Keep extra copies of your contract agreement. You or your contractor may mutually agree on contract modifications as the home renovation progresses. It’s a good idea to have the original and any updated forms of the contract on hand to establish a timeline of these modifications.
Include payment of subcontractors in your contract. In Ontario, subcontractors are legally permitted to put a lien on your home ninety days after the project completion date. Have your contractor put it in writing that they will pay subcontractors and provide you with a receipt for each payment. Even with these precautions in your contract agreement, take the additional step of obtaining the contact information and the payment details for each supplier and subcontractor. Otherwise, you may find yourself with no recourse for combating a lien on your home due to unpaid construction costs.
Find the best contractor for your project
Your home renovation is a team effort: you provide the vision, and your contractor provides the skills, knowledge, and expertise to make your dreams a reality.
Start out by obtaining quotes from local contractors. With Smart Reno’s project planning tool, you will receive up to five free quotes when you share the details of your planned home renovation. Narrow down your list of contractors by asking to see previous similar projects they have completed. If you like the customer testimonials and the look of the final renovations, put the contractor on your shortlist and ask them the questions listed above.
Your home is one of your biggest assets, and you’ve made the decision to invest further in it by doing a renovation. Read your contract agreement carefully and take steps to protect your finances.
Share the details of your project with Smart Reno and find a contractor you can trust.
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This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.