When should I make the final payment to my contractor?

In Ontario, you should make your final payment to your contractor only after the 60-day lien period expires AND all work is completed to your satisfaction. This protects you under the Construction Act (formerly Construction Lien Act).

Here's the specific timeline for Ottawa homeowners:

The 60-Day Rule
Under Ontario's Construction Act, you must hold back 10% of the contract value for 60 days after substantial completion. This "holdback" protects you from potential liens filed by subcontractors or suppliers who weren't paid by your contractor. Even if your contractor asks for full payment immediately, you're legally required to maintain this holdback.

What "Substantial Completion" Means
Substantial completion occurs when the work is ready for use for its intended purpose - not when every tiny detail is finished. In Ottawa, this typically means:

• All major systems (electrical, plumbing, HVAC) are functional


• City of Ottawa final inspections are passed


• ESA electrical inspection is complete (if applicable)


• TSSA gas inspection is complete (if applicable)


• You can safely occupy or use the space

Before Making Final Payment
Verify these items are complete:

• All City of Ottawa permits are closed with final inspections passed


• ESA Certificate of Inspection received (for electrical work)


• TSSA inspection certificate (for gas work)


• All deficiencies from your final walkthrough are corrected


• Warranty documentation is provided


• Lien waivers from major subcontractors (if requested)

The Payment Schedule
A typical Ottawa construction contract should follow this structure:

• 10% deposit (maximum recommended)


• Progress payments tied to completion milestones


• 10% holdback retained until 60 days after substantial completion


• Final payment only after lien period expires

Red Flags to Avoid
Never make full payment if your contractor:

• Demands 100% payment before work is complete


• Pressures you to skip the 60-day holdback period


• Claims they need full payment to "pay suppliers"


• Hasn't obtained proper permits or inspections


• Has outstanding deficiencies on your punch list

Protecting Yourself
Before releasing final payment, contact City of Ottawa Building Code Services at 613-580-2424 to confirm all permits are properly closed. For electrical work, verify the ESA Certificate of Inspection at esasafe.com. For gas work, ensure TSSA compliance through tssa.org.

The 60-day holdback period starts from substantial completion, not from when you make other payments. This gives any unpaid subcontractors or suppliers time to file liens against your property. Once this period expires without liens being filed, you can safely release the final payment.

Remember, a reputable Ottawa contractor will understand and respect these legal requirements. Any contractor who pressures you to ignore the Construction Act requirements should raise serious red flags about their professionalism and knowledge of Ontario construction law.