The three Rs of Renovations: how to protect yourself: Research, Request three quotes and Require everything in writing — and avoid cash deals
With Ontario’s renovation market estimated in the billions — $25 billion in 2015 (more if you count the underground cash-only market) — renovations are expected to grow in popularity in current market conditions. Not only are homes worth more — making renovations a positive investment most of the time — people are also choosing to upgrade to “stay put” in the old homestead until the market settles. Whatever your reason — and despite protections from the Consumer Protection Act — there are three things that are required to ensure your experience is stress-free.
Tracy MacCharles, Minister of Government and Consumer Services cautions:
“When making upgrades or repairs to your home, a cash deal may seem tempting because contractors often offer lower estimates if you pay in cash. However, a written contract helps ensure that you are getting what you paid for and puts consumers in the best position to benefit from the protections provided under the Consumer Protection Act, 2002.”
First R: Research: look for referrals, references and track record
Even if it’s difficult to find a contractor on your deadline, it pays to research your three (minimum) candidates. Ask for references and then check them.
Even if your candidates are among the best, ask directly which team-members will be on your project. You might be impressed by their principals, but are they going to work on your home? If not, who is?
Always take the time to check the consumer watch sites, particularly the Ontario government Consumer Beware List>>
Second R: Get three quotes in writing
Never settle for two quotes. Always try to ensure each of the three companies are not affiliated to each other. Only accept quotes from three companies you have researched (above.)
Charles Sousa, Minister of Finance advises:
“When you ask for a receipt or a contract you are protecting yourself and your investment while supporting vital government services. Reputable companies are those who meet legal requirements, support workplace health and safety laws, and adhere to tax compliance, and they deserve our support. It ensures fair competition, protects workers, strengthens consumer rights, and promotes economic growth.”
Third R: Require: contracts in writing
Avoiding the cash deal isn’t the government’s way of preventing you from saving money. A minority of contractors participate in the “underground economy” — but renovations rarely every go as promised. Without a written contract, you have no protections (neither legal nor consumer protections.) By law, any contract in Ontario over $50 is subject to the Consumer Protection Act, 2002, which provides a very solid range or protections — including a cool off period of 10-days during which you can cancel without penalty. In a cash no-contract deal, you waive any such protections, and without a contract, you’ll have difficulty even if you move your disputes to Ontario courts.
In your contract, be sure to establish amounts, dates of delivery, penalties if any for late delivery, and any other conditions you negotiate.
A Complete Contract Checklist
Below we’ve included helpful information, complete with links to government resources:
All terms of the agreement
A contract must clearly show the terms of your agreement with the business.
All fees and charges must be what they say they are. For example, a business may not add a $20 surcharge for a “tax” that does not exist. Make sure you understand what each charge is for and that it’s valid.
If your contract has a cooling-off period, the contract must mention this information. It must also include details on how they will deal with the cancellation if you change your mind within that time.
Estimates in the contract
If a written estimate is included in the contract, the final price cannot be more than 10% above the estimate, unless you agree to a new price and sign a change to the contract. Make sure that any written estimate you receive is part of the contract so that this 10% rule will apply.
If you are charged more than 10% above a written estimate without agreeing to it, you can demand that the final price be adjusted.
Some businesses add clauses to a contract that say that you must use a private arbitration process to resolve complaints instead of going to court or seeking assistance from the Ministry of Government and Consumer Services. You are not bound by these clauses, even if you have accepted the agreement.
The contract must show all financing charges and the annual interest rate for any financing agreement with the business. It must also explain how any extra charges would be calculated if you failed to make the payments.
Changing, renewing or extending without your permission
The business must provide you with written notice of any changes that they want to make to your contract. This includes renewing or extending it. They must also provide you with the option to not accept the changes to your contract.
Under the CPA, a written notice must include:
all proposed changes to be made to the contract
the date on which the change, renewal or extension would become effective
how the consumer must respond to the notice (mail, email, fax, etc.)
what would happen if the consumer failed to respond to the notice
If a business doesn’t follow these rules, any changes to your contract are invalid. You don’t have to pay for any charges or fees that are a result of invalid changes to your contract.
In these cases, you can write the business to ask for a correction or refund. If a business refused to correct the mistake, you can file a complaint with the Ministry of Government and Consumer Services.
Cancelling a contract
When you cancel a contract, any other arrangements you made with the purchase, like a financing agreement, are also cancelled.
Under the Consumer Protection Act, you have the right to cancel a contract and have your money returned if one of the following applies to you:
The contract has a cooling-off period
You always have a cooling-off period when you sign a contract in your home. Other contracts may also have cooling-off periods.
In those cases, you can cancel the contract for any reason within 10 days of receiving a written copy of the agreement. Water heater contracts have a 20-day cooling-off period that begins on the date that you sign the contract in your home.
Send your cancellation letter by email or by registered mail so that you have a record of when you sent it. Be sure to keep a copy of your letter.
For most contracts, the company has 15 days to return your money. For payday loans, the company has to give you a refund within 2 days. If the contract was for a product, they are responsible for picking up the product or paying for it to be picked up if they want it back.
A business can’t bill you for goods or services that you did not request or that is different from what you agreed to in the contract. You don’t have to pay for these goods or services. If you already paid (for example, through debit or credit), you can demand the return of that money.
The company has to deliver any products or start any services in a reasonable time period. If your contract gives a date on which you can expect the delivery your products or services, the company has 30 days from that date to provide them to you. If they don’t, you can cancel the contract at any time before they deliver or start the services.
If your contract doesn’t give a date on which you can expect the products or services, the company has 30 days from the date you signed the contract to deliver on products or services.
In both cases, you lose your right to cancel the contract if you accept the delivery after the 30 days.