What to do when the contractor requests payment before the work is completed

The contract has been signed, the work has started and all of a sudden, the contractor is asking you to pay. This leads to a lot of questions. Does the contractor have the right to make this request? Can he stop working if you refuse to pay?

In truth, there is no one-size-fits-all answer to these questions and, except for certain specific cases, there is no law governing this aspect.

There are several factors that can affect and provide nuances regarding the way forward. In this article, we will present different scenarios so that you can identify the one that most resembles your case:

Renovation contract: specifications about the payment

If you are asking yourself this question, it is probably due to the fact that you are already in a situation that is leading you to question yourself in that sense. This means that normally, you have signed a contract detailing the work, the total amount payable and the terms and conditions associated with the contract.

Read the contract carefully and pay special attention to the section that deals with the payment. Do you have any details? Did the contractor specify that he wanted to be paid before the work was completed? Ideally, this information should have been validated at the time of signing, but if we’re being realistic, we know that many people do not read the fine print on documents and don’t think about discussing payment terms.

Let's be clear: the contractor does not have the right to request a payment before the end if it has not been stated in the contract you signed. If they do, they must also justify why they require this payment before having fully delivered the goods.

Incomplete contract or verbal contract

In some cases, contracts include very few details, or they may have been formulated verbally. In these situations, the contractor does not have the right to demand a payment. With that being said, it is in your best interest to maintain a good relationship with them if you want them to finish the work (and if you are satisfied so far). You can, therefore, try to negotiate and come to an amicable agreement.

Warning: if you signed your contract under the table, you will not be as easily protected if litigation occurs. There may be ways to prove that there was an agreement if you do have to go to court, but it will be a lot more complicated and you will have a hard time proving what you said.

Recourses if the contractor refuses to complete the work

If the negotiations are not going as planned and the contractor decides to stop the work while waiting for payment, here are some of the recourses available to you:

- Amicable agreement

- Formal notice

- Negotiation

- Small Claims Court

(For more information, see Legal recourses for a poorly executed renovation project)

Do you need help in your efforts or would you like to talk to a lawyer without spending a fortune? Legalhood offers services for writing a formal notice, online negotiation and access to talk to a lawyer on the phone (at a cost of $40 for 15 minutes).

Beware

Be aware that in Quebec, the Loi de protection du consommateur states that the contractor is prohibited from claiming charges that were not provided for in the contract and that they are not entitled to imposing penalties (other than accrued interest).

In addition, if the contract contains a clause stating that the contractor has the right to modify elements within it, note that this clause is not legally valid.

In other provinces, the law may vary. Please consult online resources that present the current laws:

• Consumer protection laws in Ontario

• Consumer protection information for Nova Scotia

• Consumer protection information for Alberta

A conclusion and some tools for the future

In most cases, the contractor will wait at the end of the work to request the final payment. This is the ideal situation for you, as it allows you to make sure that the work will be completed to your liking.

On the other hand, if at the moment of signing the contract, you agreed to pay before the end, you will have to respect this clause; otherwise, the contractor could set in motion legal measures.

If you have not signed the contract yet, or in order to be better informed and equipped in the future, here are some articles that could be useful to avoid finding yourself in an uncertain situation:

• How to find the right contractor for your renovation project

• How to find a good renovation contractor

• How your meeting with a renovation contractor should go down

• How to avoid being cheated by a renovation contractor

• Five things to know before you renovate your home

• What information should be included in a renovation quote

Note: this text presents options in case a contractor does not fulfil their part of the contract. It does not represent legal advice. For specific advice about your case, talk to a lawyer.