What payment methods are safest for paying contractors?

In Ottawa, the safest payment methods for contractors are bank drafts or certified cheques for large amounts, and credit cards for smaller payments - never pay large sums in cash or by e-transfer.

When working with contractors in Ottawa, your payment method can be your strongest protection against fraud and poor workmanship. Here's what works best in Ontario's regulatory environment:

Bank Drafts and Certified Cheques are your safest option for substantial payments. These provide a clear paper trail and can be stopped if issued but not yet cashed. For major milestone payments on renovations, always use these methods. They're also required by many legitimate contractors for payments over $5,000.

Credit Cards offer excellent protection for smaller payments and deposits under $5,000. Your credit card company can dispute charges and provide chargeback protection if work isn't completed or is defective. Many established Ottawa contractors accept credit cards, especially for initial deposits or smaller projects.

What to Avoid Completely - Never pay large amounts by cash or e-transfer. Legitimate contractors in Ottawa won't demand cash payments over $1,000. E-transfers offer no recourse once sent and are a favorite of scammers targeting Ottawa homeowners.

Ontario's Payment Protection Rules require you to follow the Construction Lien Act holdback requirements. Hold back 10% of each payment for 60 days after substantial completion. This gives you leverage if deficiencies need fixing and protects against liens from unpaid subcontractors or suppliers.

Safe Payment Schedule Structure should never exceed 10% down payment, with progress payments tied to completed work stages. A typical Ottawa renovation might be: 10% to start, 25% at rough-in completion, 25% at drywall completion, 30% at substantial completion, and final 10% after your 60-day holdback period.

Red Flags in Payment Requests include demands for full payment upfront, cash-only policies, or pressure to pay before permits are obtained. Legitimate Ottawa contractors understand Ontario's consumer protection laws and won't pressure you into unsafe payment arrangements.

Documentation Requirements mean every payment should have a proper invoice with the contractor's business number, WSIB clearance reference, and detailed description of work completed. Keep all payment records - they're essential if you need to file complaints with the City of Ottawa or pursue dispute resolution.

For major projects requiring building permits through ottawa.ca/building, ensure your contractor has pulled proper permits before making any payments beyond the initial deposit. This protects you from having to pay twice if unlicensed work needs to be redone.

Official Resources:

• Ontario Consumer Protection: ontario.ca/consumer


• Construction Lien Act information: ontario.ca/liens


• City of Ottawa Building Services: 613-580-2424


• Better Business Bureau Ottawa: bbb.org/ottawa

Remember, established contractors in Ottawa's competitive market understand these payment protections benefit everyone - they protect you as the homeowner and help legitimate contractors maintain their reputation in our close-knit construction community.