Home renovation contract guide: what to put in writing before work starts

Why handshake deals go wrong

Renovations are uniquely dispute-prone. The work happens inside your home, over weeks or months, with costs that shift as walls get opened up. Without a written contract, every ambiguity becomes an argument: was cleanup included? Was that fixture mid-range or builder-grade? Did 'about six weeks' mean six weeks?

A written contract fixes the scope, the price, the schedule, and the process for changes before anyone picks up a hammer. It also determines which legal protections apply to you — in Ontario, several of your strongest rights as a homeowner only exist when there's a contract that meets the Consumer Protection Act's requirements. The hour you spend on paperwork is the cheapest part of any renovation.

What the law requires in writing

Consumer protection is provincial, so the details vary — but Ontario's rules are the most developed and worth knowing even as a baseline, since most provinces have some version of them:

• Cooling-off period: if you sign a home renovation or repair contract worth $50 or more in your home, you have a 10-calendar-day cooling-off period. You can cancel for any reason, with no explanation and no cancellation fees. If you asked for work to start during those 10 days, you still owe reasonable compensation for work and materials the contractor actually supplied
• Estimate cap: if the contract includes an estimate, the final price for all goods and services cannot be more than 10% above that estimate — unless you agreed to new work or a new price. Vague 'allowances' that quietly double are exactly what this rule targets
• Content requirements: the contract must meet the Act's content rules (parties' names and addresses, a description of the work, the price, and other prescribed details). A contract that doesn't meet these requirements isn't just sloppy — the homeowner can cancel it at any time within one year of signing
• Complaint route: Ontario's consumer ministry takes complaints against contractors, and the province publishes guides on common renovation scams — worth reading before you sign anything

Other provinces run their own versions of these protections with different thresholds and timelines, so check your province's consumer protection rules rather than assuming Ontario's apply. But the underlying lesson is national: get it in writing, or your statutory protections may not protect you.

What a strong renovation contract includes

A quote is not a contract. A contract that actually protects you covers at least the following — if any of these are missing, ask for them before signing:

• Full legal names, addresses, and contact details of both parties, plus the work site address
• A detailed scope of work: exactly what will be done, room by room, with drawings or plans attached for anything structural
• Specifications: brands, models, grades, and colours of materials and fixtures — 'mid-range faucet' means nothing; a model number means everything
• The price structure: fixed price or cost-plus, the total, and whether HST/GST is included or extra
• A payment schedule tied to completed milestones — never to calendar dates alone
• Start and completion dates, plus what counts as a legitimate delay (and what doesn't)
• Who obtains building permits, and confirmation work won't start until permits are in hand
• How change orders are priced and approved (in writing, before the work — always)
• Warranties: the contractor's workmanship warranty and any manufacturer warranties, with durations
• Insurance and WSIB: proof of the contractor's liability insurance and workers' compensation coverage
• Site protection and cleanup: dust control, protection of existing finishes, daily/weekly cleanup, and disposal of debris
• A dispute process: how disagreements get resolved before anyone calls a lawyer — negotiation, then mediation
• Signatures and dates from both sides

Read the exclusions as carefully as the inclusions. 'Painting excluded,' 'permits by owner,' or 'existing conditions unknown' clauses are where surprise costs hide — they're fine as long as they're explicit and priced accordingly.

Money: deposits, progress payments, and the 10% holdback

Money is where most renovation relationships break down, so structure it defensively from the start.

Deposits: keep them small. Ontario's government guidance recommends keeping down payments to a minimum — around 10% — and never paying the full contract price before the work is complete. A contractor who demands 50% cash up front 'to order materials' is waving a red flag: legitimate renovation companies have the credit to buy their own materials. Tie every subsequent payment to a completed, inspectable milestone — demolition done, rough-in passed, drywall complete — not to dates on a calendar.

The 10% holdback: this one surprises homeowners. Under Ontario's Construction Act, each payer on a project must retain a basic holdback of 10% of the price of services or materials as they are actually supplied. It exists because of liens: anyone who supplies work or materials to your renovation — including subcontractors and suppliers you never hired directly — can register a construction lien against your property if they go unpaid, even if you paid your contractor in full. They generally have 60 days after their last supply to preserve the lien and 90 days to perfect it, so the final 10% stays in your hands until that window closes. (Since January 1, 2026, accrued holdback must also be released annually on longer contracts.) On bigger jobs, collect signed lien waivers or releases with each progress payment.

One more money rule: confirm the tax treatment in writing. Contractors registered for GST/HST must charge it on taxable supplies, and registration becomes mandatory once worldwide taxable sales pass $30,000 in a single quarter or over four consecutive quarters. A quote that doesn't say whether HST is included is a 13% surprise waiting in Ontario — write 'HST included' or 'plus HST' into the contract.

Change orders: the number-one dispute source

Ask any construction lawyer what causes most renovation fights and you'll hear the same answer: extras. The job starts, you spot an opportunity — 'while the wall's open, could you move that outlet?' — the contractor nods, and three weeks later there's a $1,800 line item you never agreed to a price for.

The fix is procedural, not personal. Your contract should require that every change be described in writing, priced, and signed by both sides before the work is performed, with a note on how it affects the schedule. No verbal approvals, no 'we'll figure it out at the end.' Homeowners should also budget a 10–15% contingency for genuine unknowns (what's behind the drywall is nobody's fault), so legitimate extras don't feel like ambushes. A contractor who resists written change orders is telling you how the rest of the job will go.

Permits, insurance, and who's responsible for what

Permits: getting them is your responsibility as the homeowner unless the contract assigns the job to the contractor. Check with your municipality about what's needed — structural work, plumbing, and electrical almost always require permits and inspections. If the contractor will pull permits for you, say so in the contract, and don't allow work to start until you've seen the permits issued. Unpermitted work can torpedo a future sale and an insurance claim alike.

Insurance and WSIB: ask for proof of the contractor's commercial liability insurance and workers' compensation (WSIB in Ontario) coverage before work starts, and keep copies. If an uninsured worker is injured in your home, the liability questions get ugly fast. Confirm the coverage is current, not just that a certificate existed two years ago.

References and history: get at least three written quotes, call references from similar recent jobs, and check the Better Business Bureau and your provincial consumer ministry for complaints. A contractor with no verifiable track record and no fixed business address is a gamble, not a hire.

Red flags: spotting the disappearing contractor

Ontario's consumer ministry warns about the same scams every year because they keep working. Walk away — or at least slow down — when you see:

• The door-to-door pitch: 'we're in the neighbourhood with materials left over' plus pressure to sign today for a special price
• A large cash deposit demanded before any work, especially 'to pay for materials'
• No written contract, or a one-page 'quote' presented as the whole agreement
• Refusal to provide references, insurance proof, or a business address
• 'Today only' pricing designed to stop you getting other quotes
• Asking you to pull the building permits yourself — sometimes a tactic to keep the contractor's name off the official record
• No HST/GST number on a quote from a contractor clearly over the $30,000 registration threshold

Trust the pattern, not the personality. Charming contractors with all seven red flags have bankrupted more renovations than rude ones with proper paperwork.

When it goes wrong: your options in order

Even good contracts meet bad situations. Escalate in this order:

1. Document everything. Photos of the site's condition, every payment record, the signed contract and change orders, and all communications in writing. Your case is only as good as your paper trail.

2. Put the contractor on written notice. Describe exactly what's wrong or unfinished, set a short, specific deadline to fix it, and send it in a traceable way. Many disputes end here.

3. Send a formal demand letter stating what you want (completion, repair, or a refund of the overpayment) and a deadline. Our demand letter guide walks through the format.

4. Complain to your provincial consumer ministry, which can investigate and in some cases mediate.

5. File in Small Claims Court (up to $50,000 in Ontario) for the cost of completing or fixing the work — get quotes from replacement contractors first to prove your damages.

If a lien has been registered against your property, the timelines are strict and the procedure technical — get legal advice promptly rather than trying to discharge it yourself. And whatever you do, don't stop paying under a valid contract as leverage without advice; two breaches don't make a right, and the contractor's lien rights don't disappear because you're unhappy.