Is it normal for a contractor to ask for a 50% deposit?

A 50% deposit is excessive and potentially a red flag in Ottawa's construction market. Legitimate contractors typically ask for 10-20% down, with the remainder paid in stages as work progresses.

What's Normal in Ottawa

Most reputable Ottawa contractors follow a payment structure like this:

• 10-20% deposit to secure materials and start date


• Progress payments tied to completion milestones (25-30% at rough-in, 25-30% at substantial completion)


• Final 10% holdback retained for 60 days after completion (required under Ontario's Construction Act)

For larger projects over $50,000, some contractors might request up to 25-30% upfront, but anything approaching 50% should raise concerns.

Why Large Deposits Are Risky

Contractors asking for large upfront payments often have cash flow problems, lack proper financing relationships with suppliers, or worse - are running scams. In Ottawa's construction market, established contractors have credit accounts with suppliers and don't need your money to purchase materials before starting work.

Red Flags to Watch For

Be especially cautious if the contractor also:

• Showed up at your door unsolicited


• Pressures you to sign immediately


• Lacks proper Ontario licensing (ESA for electrical, TSSA for gas work)


• Can't provide WSIB clearance certificate


• Won't provide references from recent Ottawa projects


• Quotes significantly below other estimates

Protecting Yourself in Ottawa

Before paying any deposit, verify the contractor through:

• ESA license lookup at esasafe.com/contractor-locator for electrical work


• TSSA certification at tssa.org for gas/HVAC work


• WSIB clearance certificate to ensure coverage


• Better Business Bureau and online reviews


• References from recent projects in Ottawa neighborhoods

What to Do Instead

Counter-propose a payment schedule tied to work completion:

• Small deposit (10-15%) to start


• Payment when materials arrive on site


• Progress payments at defined milestones


• Final payment minus 10% holdback after completion

If they refuse reasonable payment terms, find another contractor. Ottawa has many qualified professionals who understand proper payment structures and consumer protection laws.

Remember: under Ontario's Construction Act, you're entitled to hold back 10% of the contract value for 60 days after substantial completion to protect against liens and deficiencies.