What is a progress payment schedule for home renovations?

A progress payment schedule for Ottawa home renovations is a structured plan that breaks your project payments into stages tied to completed work milestones, protecting both you and your contractor while maintaining cash flow throughout the project.

How Progress Payments Work in Ottawa

Rather than paying everything upfront or waiting until completion, progress payments align your payments with actual work completion. In Ontario, this approach protects homeowners under the Construction Act while giving contractors necessary working capital.

A typical Ottawa renovation progress schedule might look like:

• 10% down payment upon contract signing (never more than 10% or $1,000, whichever is less, under Ontario's Consumer Protection Act)


• 25% upon material delivery and project start


• 30% at rough-in completion (framing, electrical rough-in, plumbing rough-in)


• 25% at substantial completion (drywall, flooring, fixtures installed)


• 10% final payment after final walkthrough and any deficiencies corrected

Ontario's 10% Holdback Rule

Under Ontario's Construction Act, you must hold back 10% of each progress payment for 60 days after substantial completion. This holdback protects you from construction liens. For a $50,000 bathroom renovation, you'd hold back $5,000 total across all payments, releasing it 60 days after completion if no liens are filed.

What Triggers Each Payment in Ottawa Projects

Material Delivery Payment: Only pay when materials are actually delivered to your Ottawa property and you can verify they match your specifications. Don't pay for materials sitting in a warehouse.

Rough-in Payment: This major milestone means framing is complete, and electrical/plumbing rough-ins have passed City of Ottawa inspections. Your contractor should show you the actual inspection certificates before you pay.

Substantial Completion: All major work is done, fixtures installed, and the space is essentially usable. Any remaining work should be minor touch-ups or deficiency corrections.

Red Flags to Avoid

Never accept payment schedules that ask for large upfront payments or payments ahead of work completion. Legitimate Ottawa contractors don't need 50% down payments. Be wary of contractors who want payment for "permits and materials" before work starts - reputable contractors can carry these costs.

If a contractor demands payment before City of Ottawa inspections are complete, that's a major red flag. Inspections verify work meets Ontario Building Code standards.

Protecting Yourself

Always tie payments to specific, measurable milestones rather than time periods. "Pay $10,000 after two weeks" is dangerous. "Pay $10,000 after electrical rough-in passes City inspection" is safe.

Document everything with photos before making payments. If disputes arise, you'll need evidence of work completion for Ontario's consumer protection processes.

For larger renovations over $50,000, consider having payments flow through a lawyer's trust account, especially for contractors you haven't worked with before.

Getting It Right

A fair progress payment schedule protects both parties. You maintain leverage by never being more than one payment ahead of completed work, while your contractor gets regular cash flow to keep your project moving. The City of Ottawa Building Code Services (613-580-2424) can verify inspection requirements for your specific project milestones.

Remember: legitimate contractors understand and expect reasonable payment schedules. Anyone pressuring you for large upfront payments or unusual terms should be avoided.