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 you've confirmed all work meets contract specifications and has passed required inspections.

Here's the specific timeline for Ottawa contractors under Ontario's Construction Act:

The 60-Day Holdback Rule

You're legally required to hold back 10% of the total contract value for 60 days after "substantial completion" of the work. This protects you from construction liens that subcontractors or suppliers might file if they weren't paid by your contractor. The 60-day clock starts when the work is substantially complete - meaning it's ready for use even if minor finishing touches remain.

Before Making Final Payment in Ottawa

Verify all permits are closed: Contact City of Ottawa Building Code Services at 613-580-2424 to confirm all permits have passed final inspection. For electrical work, ensure ESA has issued final approval through esasafe.com. For gas work, verify TSSA sign-off at tssa.org.

Complete your walkthrough: Document any deficiencies in writing and ensure your contractor addresses them. Take photos of completed work for your records.

Confirm WSIB clearance: Verify your contractor's WSIB account is in good standing at wsib.ca/clearances to protect yourself from potential workplace injury claims.

Check warranty documentation: Ensure you receive all manufacturer warranties, care instructions, and any contractor warranty agreements in writing.

Red Flags to Watch For

Never make full payment if a contractor pressures you to pay before the 60-day period, claims they need money for the "next job," or says the holdback doesn't apply to smaller projects. These are common tactics used by contractors who may not pay their suppliers or subcontractors.

Be cautious if permits haven't been finalized or if the contractor can't provide proper completion certificates from ESA or TSSA when required.

Payment Schedule Best Practices

Structure payments throughout the project rather than paying large amounts upfront. A typical schedule might be 10% down, progress payments tied to completion milestones, and final payment (minus the 10% holdback) upon substantial completion. The final 10% gets released after the 60-day lien period expires.

Official Resources

For questions about lien rights and payment schedules, consult ontario.ca/construction-lien-act. The City of Ottawa Building Code Services can confirm permit status, and you can verify contractor licenses through ESA and TSSA websites.

Remember, once you make that final payment, your leverage to address any issues drops significantly. The holdback period exists to protect homeowners - use it.