A well-structured payment schedule protects both you and your contractor. The standard approach in Ottawa ties payments to project milestones, ensuring you pay for work completed — not work promised. Typical payment schedule for a $50,000+ renovation: 10% deposit upon contract signing, 25% when demolition and rough-in are complete, 25% when drywall and painting are complete, 25% upon substantial completion (when you can use the space), and 15% upon final completion and punch list resolution. F...
Industry standard deposits in Ottawa are 10-15% of the total contract value. Some contractors request up to 20% for projects requiring significant material purchases upfront (custom cabinetry, specialty tile). Deposits exceeding 25% should be questioned. What the deposit covers: the deposit secures your project in the contractor's schedule, covers initial material purchases, and demonstrates your commitment to the project. It does not pay for work that hasn't been performed. Protecting your de...
Each milestone payment should correspond to verifiable, completed work. Before releasing a payment, inspect the work (or have an independent inspector verify it). Don't rely solely on the contractor's word that a milestone is complete. Milestone verification checklist: demolition milestone — is all demolition complete, debris removed, and the site clean? Rough-in milestone — are all plumbing, electrical, and HVAC rough-ins complete and inspected by the City? Drywall milestone — is drywall insta...
A 10-15% holdback (retaining the final payment for 30-60 days after completion) is your most powerful tool for ensuring quality completion. The holdback period allows you to identify deficiencies and ensures the contractor returns to fix punch list items. Punch list items are minor deficiencies identified after substantial completion: paint touch-ups, hardware adjustments, trim imperfections, door alignment, grout repairs, and similar finishing issues. Every renovation has them — they're normal...
Demanding large upfront payment: any contractor requesting more than 25% upfront without a clear material-purchasing justification should be questioned. Scam contractors often take large deposits and disappear. Cash-only payments: legitimate contractors accept cheques, e-transfers, and credit cards. Cash-only requests often indicate they're not reporting income (tax evasion), don't have a business bank account (not established), or want to avoid a paper trail. Accelerated payment requests: ask...
Standard deposits are 10-15% of the total contract value. Up to 20% is acceptable for material-heavy projects. Never pay more than 25% upfront. Pay by cheque or credit card for a paper trail.
For projects over $50,000: 10% deposit, then 25% at rough-in, 25% at drywall, 25% at substantial completion, and 15% holdback. For smaller projects: 10-20% deposit, 30-40% midpoint, 40-50% at completion.
No, always pay by traceable methods (cheque, e-transfer, credit card). Cash payments provide no proof of payment, may indicate the contractor is evading taxes, and eliminate your consumer protection options.
A holdback is 10-15% of the total price retained until 30-60 days after completion. It ensures the contractor returns to fix punch list items and protects against sub-trade liens. It's your most important payment protection.
Document specific deficiencies in writing and communicate them to the contractor. Withhold payment until issues are corrected, but be specific and reasonable. Vague complaints or unreasonable withholding can constitute breach of contract.