Few questions cause more anxiety than how much to pay a contractor upfront. Pay too little and a legitimate contractor cannot secure your materials or commit to your schedule; pay too much and you lose your leverage and expose yourself to the most common renovation scam of all. The right answer in Ottawa follows a well-established standard that balances the contractor's legitimate needs against your protection. This guide explains what a reasonable deposit looks like, how to structure the rest of your payments around completed work, and how Ontario's holdback rules give you an additional layer...
There is a clear industry norm in Ottawa, and deviating far from it in either direction is a signal worth paying attention to.
A reasonable deposit is 10% to 15% of the total project cost. This covers a contractor's initial material orders and reserves your place in their schedule without putting your money at undue risk. For most residential renovations in Ottawa, a deposit in this range is both fair to the contractor and ...
You should never pay more than 25% before work begins, and even approaching that figure deserves scrutiny. Demands for 40%, 50%, or full payment upfront are the hallmark of the disappearing-deposit scam. A contractor who needs most of the money before lifting a tool is either undercapitalized or dis...
After the deposit, payments should be tied to completed milestones, not to dates on a calendar. This keeps the contractor motivated and your money protected.
A common, fair structure for an Ottawa renovation is: 10% to 15% deposit at signing, 20% to 25% on completion of demolition and rough-in, 20% to 25% at major construction milestones, 20% to 25% at substantial completion when the space is usable, and a final 10% to 15% holdback until all deficiencies...
Resist requests to pay ahead of the schedule because the contractor is short on cash or wants to order something early. If a contractor cannot float their own operating costs between milestones, that is a financial stability concern. Your payments should consistently lag slightly behind completed wo...
Beyond the deposit and milestone structure, a few practices give you strong protection.
Keep a final 10% to 15% until every item on the deficiency list is fixed and any required inspections pass. This holdback is your leverage to ensure the small but important finishing details are completed to your satisfaction. Ontario's Construction Act also provides for a statutory holdback, adding...
Pay by cheque or traceable electronic transfer, never cash, even for small amounts. Get a receipt for every payment, and make sure your written contract lists the deposit amount, the milestone schedule, and the holdback. Documentation is your protection if a dispute ever arises.
A reasonable deposit is 10% to 15% of the total project cost. This covers initial materials and reserves your spot in the schedule. You should never pay more than 25% before work begins, and demands for 40% or more are a major warning sign.
Large upfront deposits are the basis of the most common contractor scam — the contractor takes the money and never finishes, or never starts. Keeping the deposit small and tying the rest of the payments to completed milestones protects your money and keeps the contractor motivated.
Tie payments to completed milestones, not dates: roughly 10% to 15% deposit, 20% to 25% after demolition and rough-in, 20% to 25% at major milestones, 20% to 25% at substantial completion, and a final 10% to 15% holdback until deficiencies are corrected.
A holdback is a portion of the payment — typically the final 10% to 15% — that you keep until all deficiencies are fixed and inspections pass. It is your leverage to ensure finishing details are completed. Ontario's Construction Act also requires a statutory holdback on many projects.
No. Always pay by cheque or traceable electronic transfer so you have a record. Cash leaves no paper trail, offers no protection in a dispute, and is often associated with contractors avoiding HST, which is itself a red flag.