Most renovation scams share the same handful of warning signs: a cash-only deal with no receipt, an unsolicited knock at your door, pressure to sign immediately, a refusal to pull a permit, no insurance or Workers Compensation Board (WCB) registration, and a demand for full payment up front. Any one of these should make you stop. Two or more together, and you should walk away. This guide names the red flags and tells you exactly what to do instead.
The cash-only pitch
A contractor who insists on cash and "no receipt" is a problem on every level. They are almost certainly evading GST/HST, which can make you a party to tax fraud. They are very likely uninsured, because no legitimate insurer covers unreported revenue. They are almost certainly not WCB-registered, which throws the deemed-employer liability onto you if a worker is hurt. And you are left with no paper trail for a warranty claim or a dispute. If there is a fire, an injury or a structural failure, cash-only leaves you with essentially no legal protection. Insist on a written contract and pay by traceable means.
Door-knockers
Unsolicited door-to-door selling for home repairs is the single biggest source of contractor fraud in Canada. The classic lines are:
- "We are working in the neighbourhood and noticed your roof needs attention."
- "We have leftover asphalt from a job down the street and can give you a great deal."
No legitimate roofing contractor has "leftover asphalt." The price quoted at the door almost always balloons once work starts, on the back of newly "discovered" problems. In Ontario, a contract for goods or services over $50 signed at your home gives you a 10-day right to cancel under the Consumer Protection Act, so use it; but the safer move is never to sign at the door at all. Other provinces have their own door-to-door rules, so check yours.
Storm chasers
After a hailstorm, ice storm or flood, roofing and restoration crews descend on the affected streets. Watch for:
- Out-of-province or out-of-country plates and no local business presence.
- Pressure to sign immediately "before prices go up."
- A demand that you sign an Assignment of Benefits, which hands your insurance claim rights to the contractor. Do not sign one on the doorstep.
- No verifiable local address: a PO box, a hotel, or a temporary office.
- Claims of a "special relationship" with your insurer, or manufacturer warranties they cannot actually back.
After any weather event, slow down. Confirm a local phone number, a business address that has operated in your market for more than a year, a current CGL certificate, and a verified licence or registration before you let anyone on the roof.
The "no permit needed" line
Permits protect you, not the contractor. They trigger an independent inspection that confirms the work meets code. Anyone who discourages you from pulling a permit, or claims the job does not need one when it clearly does, is hiding something. Unpermitted structural, electrical or gas work can void your insurance, fail a future home sale, and leave you paying to redo it. If a contractor will not work on a permit, that is the end of the conversation.
Other universal red flags
- Full payment demanded up front. A deposit of 10 to 15 percent is normal; the whole price is not. See Deposits and Your Consumer Rights.
- No written contract for work over a few hundred dollars.
- No insurance or WCB documentation when you ask. See Checking a Contractor Is Licensed.
- An unusually low bid, 40 percent or more below the next quote. It is either missing scope or a plan to walk away.
- Reluctance to give references from recent local jobs.
- Pressure and urgency. "This price is only good today" is a sales tactic, not a deadline.
What to do instead
- Get three written quotes on the same scope (see What Renovation Work Should Cost).
- Verify the licence, WCB clearance and insurance yourself.
- Sign a written contract with staged payments and a holdback.
- Pay by traceable means, never cash, and keep every receipt.
- If you are pushed to decide on the spot, that alone is your answer: say no.
Common mistakes
- Letting urgency override the checks. A real contractor will wait for you to verify them.
- Signing an Assignment of Benefits to get the roof done fast. You can lose control of your own insurance claim.
- Paying cash for a discount. The "discount" is the protection you are giving up.
- Skipping the permit to save time or money. It can cost you far more later.
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