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

No, a 50% deposit is NOT normal and is a major red flag in Ottawa's construction industry. Legitimate contractors typically ask for 10-20% down, with the remainder paid in stages as work progresses.

What's Normal in Ottawa

Reputable contractors in Ottawa follow industry standards for payment schedules. For most renovation projects, you should expect:

• Initial deposit: 10-20% to secure materials and start date
• Progress payments: 25-30% at key milestones (framing complete, electrical rough-in, etc.)
• Final payment: 10% held back until project completion and your satisfaction

The Ontario Construction Lien Act actually protects you by requiring a 10% holdback on each payment for 60 days after substantial completion. This gives you leverage if issues arise.

Why 50% is Dangerous

Contractors asking for large upfront payments often have cash flow problems, may be using your money to finish other jobs, or worse - could disappear with your deposit. In Ottawa, we've seen this happen repeatedly, especially with door-to-door contractors and those without proper licensing.

When you pay too much upfront, you lose your negotiating power. If problems arise or work quality is poor, you have little recourse when the contractor already has most of your money.

Ottawa-Specific Protection Steps

Before paying any deposit, verify the contractor through official channels:

• ESA License Check: Visit esasafe.com/contractor-locator for electrical contractors
• WSIB Clearance: Confirm at wsib.ca/clearances to protect against workplace injury claims
• City of Ottawa Business License: Call 311 to verify registration
• Better Business Bureau: Check complaint history and ratings

Always get a detailed written contract specifying the payment schedule tied to completion milestones, not calendar dates. The contract should include permit numbers (if required), material specifications, and completion timeline.

Red Flags Beyond the 50% Request

Be especially wary if the contractor also:

• Showed up at your door unsolicited


• Pressures you to sign immediately


• Only accepts cash payments


• Can't provide local references from the past year


• Doesn't mention permits for work that requires them

What to Do Instead

Counter-propose a reasonable payment schedule: 15% to start, 30% when materials arrive, 30% at halfway point, 20% near completion, and 5% final payment after your walkthrough. Any contractor who won't negotiate from 50% down should be crossed off your list immediately.

For permit requirements and contractor verification in Ottawa, contact Building Code Services at 613-580-2424 or visit ottawa.ca/building. Protecting yourself upfront saves thousands in potential losses and legal headaches down the road.