Renovation Contract Checklist for Ontario Homeowners

A renovation contract in Ontario is not a formality. Under the Consumer Protection Act, 2002, a home renovation contract must be in writing, and the province advises that it contain specific items: the contractor’s details, a detailed description of the work and materials, warranties, the total price and payment terms, start and completion dates, the payment schedule and deposit, who cleans up, and which trades are subcontracted and who pays them. If any of those are missing or vague, the contract is weaker than it should be. This checklist sets out what to look for, in the order the decisions come up.

Before you sign: the decisions that come first

A contract is only as good as the planning behind it. The scope of work, the drawings and the permit requirements should be settled before a price is agreed. If the design is still moving, the contract will move with it, and every change becomes a negotiation.

Start with how to plan a home renovation in Ontario, step by step, which covers the order of decisions from budget to drawings. Then confirm whether the work needs a building permit. Structural changes, additions, basement finishing with new walls or plumbing, and many decks do; cosmetic work usually does not. Rules differ by municipality, so check with the building department before the contract is signed, not after.

When you have a shortlist of contractors, how to choose a renovation contractor in Ontario explains what to verify: business registration, insurance, WSIB coverage, references and whether the trades they use are licensed. A contractor who cannot produce those documents before signing is a risk in the contract as well as on the site.

What the contract should contain: the checklist

The province’s guidance is the starting point. The table below lists what a renovation contract should include and what to check for in each item.

A written estimate is part of the picture. A contractor may not charge more than 10% above a written estimate unless the homeowner agrees to new or different work or a new price. That is why the scope description matters: the more precise it is, the harder it is to argue later about what was included. How to compare renovation quotes and estimates explains how to line up competing quotes so the comparison is fair.

The payment schedule: stages, not dates

A renovation payment schedule should follow the work. A common structure ties payments to milestones: a deposit at signing, a payment when demolition and rough-in are complete, a payment at insulation and drywall, a payment at finishing, and a final payment after the final inspection and the punch list. The exact split is a matter of negotiation, but the principle is that money should not run ahead of completed work.

The province recommends a deposit of no more than 10% of the contract price, and getting written estimates from at least three contractors. A contractor who asks for a large sum up front, before any work has started, is asking you to carry their risk.

Ontario’s Construction Act adds a layer. Anyone who supplies work or materials to a property and is not paid can register a construction lien on the title. Every payer, homeowners included, must hold back 10% of each payment. That holdback is released when the lien period has passed with no liens registered. A subcontractor can lien a home even when the general contractor has been paid in full; the holdback is the owner’s protection. The rules on timing and release are specific, and holdbacks and construction liens: what Ontario homeowners should know explains how they work in practice. How the Act applies to one contract is a question for a lawyer.

Change orders: written, signed, before the work

Almost every renovation has a change. A wall turns out to be in a different place, a fixture is discontinued, an owner decides to add a window. A change order is the written record of that change: what is different, what it costs, and how it affects the schedule. It should be signed by both sides before the extra work is done.

An unsigned change is where disputes start. The contractor says the extra was agreed on site; the owner says it was never priced. A contract that sets out a change-order process, and a homeowner who insists on using it, prevents most of that.

Permits: who applies and who is responsible

The contract should say which permits are required and who obtains them. In Ontario, the building department issues building permits and inspects the work. Electrical work needs an ESA notification of work, and paid electrical work must be done by a Licensed Electrical Contractor, who files the permit. Gas work must be done by a TSSA-registered contractor. Plumbing work needs a municipal plumbing permit and a licensed plumber. Structural changes need a design by a qualified designer or engineer and a building permit.

Some contractors arrange permits as part of the job; others expect the homeowner to. Either can work, but the contract must say which. The permit card must be posted where it is visible, and the permit names inspections at stages of the work. Covering work before it is inspected can mean opening it up again, so the payment schedule should leave money available until inspections pass.

The cooling-off right and when to use a lawyer

A contract signed in the home, which the law calls a direct agreement, can be cancelled for any reason within 10 days of receiving the written copy of the contract. That right exists because a contract signed at the kitchen table is signed under different pressure from one signed after a tendering process. If the contract is signed at the contractor’s office, the right does not apply in the same way.

A lawyer should read the contract when the project is large, when the contract is unusual, when the property has heritage or conservation authority issues, or when the homeowner is unsure about the holdback or lien provisions. How the law applies to a particular contract or property is a question for a lawyer, not for a guide.

What goes wrong

The most common problems in renovation contracts are not exotic. They are ordinary omissions.

• A vague scope. “Renovate kitchen” is not a scope. It leaves every material and every fixture open to argument.
• No written change-order process. Extra work gets done on a handshake and priced at the end.
• Payments ahead of work. A schedule weighted to the start leaves the homeowner exposed if the contractor stops showing up.
• No holdback. Paying each invoice in full, with no holdback, removes the owner’s protection against subcontractor liens.
• Permits left ambiguous. Nobody applies, or the homeowner assumes the contractor did.
• No completion date. The job drifts, and there is no agreed point at which it is late.
• Warranty in words only. A warranty that is not written into the contract is hard to enforce.
• Signing under pressure. The cooling-off right exists, but it is easier to avoid the problem than to use it.

The remedy is the same in every case: a written contract with the checklist items above, a payment schedule tied to stages, a signed change-order process, and a clear statement of who obtains which permits. Tarion administers the warranty on new homes built by licensed builders, but it does not cover renovations, additions to an existing house or remodelling. For those, the protection is the written contract, the contractor’s own warranty and insurance.