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Understanding the Clauses of a Renovation Contract

Last modified: 2022-12-29 | Approximate reading time 7 mins

Cynthia Pigeon

Signing a renovation contract can raise a considerable number of questions, especially regarding the information, details, and clauses within. When in doubt, anxiety usually kicks in and renders the renovation process a stressful period.

However, to help you navigate through this period with peace of mind, here's an overview of a properly drafted renovation contract that’ll allow you to lay your head down at night, worry-free.

First of all, allow us to say that it’s imperative to have a contract drafted with the contractor whose services you’re retaining. Although a verbal contract may have some weight in a court of law, it’s a lot more difficult to prove its existence and furthermore obtain compensation if necessary.

Essential Information to Include in a Renovation Contract

Here’s a list of items that must figure in your renovation contract:

  • The contractor’s name and address (a PO box isn’t sufficient);
  • License and permit numbers;
  • Project start and end dates;
  • A statement detailing that the contractor entails to follow and respect the rules and regulations issued by the Construction Code;
  • The contractor’s liability insurance policy number as well as the insurance company’s name;
  • Exact (or approximate) cost of renovations;
  • A detailed description of the work that’ll be undertaken, as well as the materials that’ll be used and the types of products involved in the project (doors, windows, and others), including their style, brand, and colour. This description includes all preliminary and finishing work;
  • A statement as to whether any items are to be removed (appliances or materials) and how they’ll be handled;
  • Your complete address and contact information;
  • The contractor’s PST and GST numbers;
  • The work you'll be doing yourself if any. This list must be accounted for in the work schedule agreed upon with the contractor. Note that if delays are caused by your failure to complete the work in a timely manner or by circumstances beyond your control (flooding or other), the contractor cannot be held responsible;
  • Information on who’ll obtain the necessary work permits (if permits other than the renovation permit—which you must obtain—are required from your city);
  • Payment terms and conditions related to the project (divided into several installments, with or without a down payment);
  • A statement attesting to the contractor's compliance with the Act respecting occupational health and safety and the Act respecting industrial accidents and occupational diseases;
  • A statement giving the contractor permission to access your utilities or, if applicable, a statement detailing that the contractor must make alternate arrangements for water or electricity use.

someone signing a contract_Renovation Contract: Understanding the Clauses

Photo: Pixabay

Important Details

If a contract is made with an itinerant salesperson, there are a few variations to the information that must be included in the contract. For more information, see the section on drafting an agreement with an itinerant salesperson (available in French only).

Also, note that the contractor and their employees must have access to medical insurance and CNESST coverage in the event of an accident. Should employees on the job site not have such coverage, you may be held responsible for an accident that occurs during the course of the renovation work. Your liability would be based on the fact that you’re the owner of the site where the incident took place.

Bear in mind that you can check whether the contractor you have chosen to carry out your renovation project has the required qualifications by looking up their license number on the Régie du bâtiment du Québec website.

It's also wise to have a signed agreement that stipulates that the contractor will refund the initial deposit if the work isn’t completed on time. 

Should additional work be required along the way, the contract should specify that your authorization is required to complete the work. This'll allow you to be updated on the progress of the work while avoiding additional costs that weren't included in the initial renovation budget.

While it's advisable to seek out references when choosing a qualified contractor for your home improvement project, it's also essential to do some additional background checks before choosing the right contractor to complete your home renovation project. You need to be sure that there are no previous claims regarding the subquality of their work. You can find that out on the Office de la protection du consommateur website.

A little-known fact that’s well worth knowing is that you can hold back 10% of the total cost of the renovations for up to 45 days following the completion of the work to ensure that the contractor has settled all payments with their subcontractors.

Lastly, remember that you can monitor the quality of the work done at any time (without interfering with the progress of the work) and, if necessary, you can request the assistance of a professional of your choosing.

tools_Renovation Contract: Understanding the Clauses

Photo: Pixabay

Beware of the Following Warning Signs

Be wary of contractors who ask for cash payments or full payment upfront. In any event, consider paying the amount due by cheque and avoid paying the full amount in one lump sum.

Also, beware if a contractor asks you to obtain the building permit personally, as it’s never your responsibility to do so. 

Check out our article: Renovation Project: How Much Should You Pay for a Deposit? to find out the necessary precautions to take prior to paying a deposit.

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Should a Problem Arise

If, for any reason, you're not happy with the work that was completed, let the contractor know in writing. Also, you can withhold the amount meant for the work targeted in your request for as long as it takes for the work to be rectified.

In the event that a peaceful resolution cannot be reached, you can retain the services of a lawyer. Prior to taking this drastic measure, send a registered letter to notify the contractor that the contract will be cancelled in the absence of an agreement that’s satisfactory to both parties. You’ll then be able to ask for the initial deposit refund (as per what the law stipulates) in the absence of an agreement.

You can also send a copy of this letter to the Office de la protection du consommateur in order to attest to your dissatisfaction with respect to the agreement made with the contractor, which was communicated with them prior to taking formal legal action.

Want to learn more about the various recourses available if you have a problem with your contractor? Check out these articles:

Itinerant Salesperson's Contract

Should you make an agreement with an itinerant salesperson to carry out your renovation work, note that they must obtain a special permit, which can be verified on the Office de la protection du consommateur website.

More specifically, an itinerant salesperson promotes their products and services (roof, doors, windows, exterior siding, or thermal insulation installation) outside of their day-to-day trade work. Even if the contractor shows up at your home, at your request, in the eyes of the law, they’re still considered an itinerant salesperson.

Knowing for a fact that the merchant holds this permit is proof that they’re offering a warranty with the Office de la protection du consommateur, should there be a problem with the services rendered. This’ll allow you to recover the amount paid without resorting to more tedious and painful recourses to get your money back.

shaking hands_Renovation Contract: Understanding the Clauses

Photo: Pixabay

Cancelling a Contract with an Itinerant Salesperson

Even though the contract binds the signing parties, one can falsely assume that cancelling said contract cannot be done. Note that the contract can be cancelled within 10 days of its reception without any particular justification. 

For that, you’ll need to send a contract termination letter that formally stipulates that you wish to cancel the pre-agreed upon contract. If a deposit has already been issued toward the purchase of materials or for the work itself, the contractor has a maximum of 15 days to refund the entire amount. 

It’s possible to terminate the terms of the contract after a year solely if the contractor didn’t have the right certifications required by the Office de la protection du consommateur when the contract was signed or if mandatory information wasn’t stipulated in the contract. If the salesperson hasn’t provided you with a contract cancellation form or a statement of consumer cancellation rights, then it’s also possible to cancel the contract.

Cancelling your contract with a contractor at any time

First and foremost, note that the law doesn’t require there to be a specific timeframe within which to request a termination of the contract (except when it comes to itinerant salespersons). This is clearly stipulated in Article 2125 of the Civil Code of Quebec.

Should you be able to nullify the contract in the absence of a breach on the contractor’s part, note that you’ll have to refund all costs attributed to the project, whether these costs are related to materials or labour. You’ll most likely have to go to court at this point.

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