What payment schedule is normal for a renovation project?

For Ottawa renovation projects, a typical payment schedule follows a 10-20-40-30 structure, with the final 10% held back for 60 days as required by Ontario's Construction Lien Act.

The most common payment structure for renovations in Ottawa breaks down like this: 10% deposit upon contract signing, 20% when materials arrive on site, 40% at the halfway point when major work is substantially complete, 20% upon project completion, and then the final 10% holdback released after 60 days.

However, you'll see variations depending on project size and contractor preferences. Some contractors prefer a 20-30-30-20 schedule, while others might request 25% upfront for smaller projects under $20,000. The key principle is that payments should align with work completed - never pay large amounts before seeing corresponding progress.

What Ontario Law Requires

Under Ontario's Construction Lien Act, you must hold back 10% of each payment (including the final payment) for 60 days after project completion. This protects you if subcontractors or suppliers aren't paid and try to place liens on your property. Even if your contractor asks for full payment, you're legally required to maintain this holdback.

For projects over $500,000, the holdback must be placed in a separate trust account, but for typical Ottawa home renovations, you can simply retain the funds yourself.

Red Flags in Payment Schedules

Be extremely cautious of contractors who demand large upfront payments - anything over 25% is suspicious, and anything over 50% upfront is almost certainly a scam. Legitimate Ottawa contractors have established supplier relationships and don't need you to finance their material purchases.

Also watch for contractors who want payment in cash only, request payment to personal accounts rather than business accounts, or pressure you to pay the full amount before work is complete. These are classic signs of fly-by-night operators.

Ottawa-Specific Considerations

Many established Ottawa contractors will work with you on payment timing, especially for larger renovations during winter months when cash flow can be tighter. Don't hesitate to negotiate terms that work for both parties - a good contractor wants you comfortable with the arrangement.

For projects requiring City of Ottawa permits, ensure permit fees are clearly outlined in your contract. Some contractors include permit costs in their quote, others charge them separately. Building permit fees in Ottawa range from $500 to $5,000+ depending on project scope.

Protecting Yourself

Always get the payment schedule in writing as part of your contract. Include specific milestones tied to payments, and ensure your contractor provides proper invoices with HST registration numbers. Verify their WSIB clearance certificate before making any payments - you can check this at wsib.ca/clearances.

If disputes arise over payments, contact Ontario's consumer protection office at ontario.ca/consumer or consider mediation through the Better Business Bureau before payments become a bigger issue.

Remember: a professional contractor will never pressure you about payment terms and will be happy to explain their schedule and reasoning.