Should I be worried if a contractor asks for full payment upfront?

Yes, you should be very concerned if an Ottawa contractor asks for full payment upfront - this is one of the biggest red flags in the construction industry and violates Ontario's Construction Lien Act.

Under Ontario law, contractors are legally required to follow proper payment structures that protect homeowners. The Construction Lien Act specifically allows you to hold back 10% of each payment for 60 days after substantial completion to protect against liens and defective work.

Legitimate contractors in Ottawa typically follow this payment schedule: 10% deposit to start, progress payments tied to completed milestones (usually 25-30% chunks), and final payment minus the 10% holdback upon completion. For example, on a $30,000 bathroom renovation, you might pay $3,000 to start, $7,500 after demolition and rough-in, $7,500 after drywall and tiling, $7,500 after fixtures and painting, then the final $4,500 minus 10% holdback ($3,000) after completion.

Contractors asking for full payment upfront often do this because they're struggling financially, planning to use your money for other jobs, or worse - planning to disappear with your money. The City of Ottawa Building Code Services (613-580-2424) regularly warns homeowners about this practice.

Red flags that should make you walk away immediately include: demanding full payment before starting, asking for payment in cash only, pressuring you to sign immediately, or claiming they need money to "buy materials" before starting. Legitimate contractors have established credit with suppliers or sufficient working capital.

Before hiring any contractor in Ottawa, verify their credentials through the proper channels. For electrical work, check their ESA license at esasafe.com/contractor-locator. For gas work, verify TSSA certification at tssa.org. Always confirm they have valid WSIB coverage at wsib.ca/clearances and liability insurance.

If a contractor is pressuring you for full payment upfront, contact the Ontario Consumer Protection office or consider it a sign to find a different contractor. Remember, once you've paid in full, you have very little leverage if problems arise. The 10% holdback exists specifically to ensure contractors complete work properly and address any deficiencies.

For major renovations requiring City of Ottawa permits, legitimate contractors will typically request the first progress payment only after permits are approved and work begins, never before.