Never pay the full price up front, always insist on a written contract, and know that you hold real rights: a deposit should be small and tied to a signed contract, you can hold back a percentage of every payment as legal protection, and in some situations you can cancel a contract within a cooling-off period. The exact rules differ by province. This guide states Ontario's rules, which are among the clearest, and flags where other provinces differ.
A note on which province you are in
Consumer protection for renovation contracts is provincial, not federal. The Ontario rules below come from the Consumer Protection Act, 2002. British Columbia, Alberta, Quebec and the rest each have their own consumer-protection legislation with different thresholds and cancellation rights. Quebec in particular runs its own regime under the Consumer Protection Act administered by the Office de la protection du consommateur (OPC). Treat Ontario's figures as a worked example, and confirm your own province before you rely on a specific number.
Fair deposits
A deposit is normal; an oversized one is a warning sign. The industry standard for residential renovation is:
- 10 to 15 percent at contract signing, which is enough to schedule and order materials.
- Never more than 30 percent up front for any job.
- Never in cash. A cash deposit leaves no paper trail and no recourse.
- Final payment is not released until the work is finished, inspected, and any deficiencies are corrected.
For custom or special-order items, a larger materials deposit can be reasonable, but ask for an itemised receipt showing what it covers.
What a written contract must contain
In Ontario, a consumer agreement over $50 must be in writing. Whatever province you are in, a good small-works contract should set out:
- The parties: full names and contact details, plus the contractor's licence or registration number where the trade is licensed.
- The scope: a detailed description of what is and is not included.
- The materials: brand and grade, and who supplies them.
- The price: a fixed price or a schedule of rates, and how any changes (variations) are agreed, in writing only.
- Payment milestones: the deposit, progress payments tied to stages, and a final payment held back until sign-off.
- The timeline: start date, completion date, and what happens if there are delays.
- The certificates and permits that will be provided, and who pulls the permit.
The estimate-overrun rule
Under Ontario's Consumer Protection Act, where a contractor gives you a written estimate, they cannot charge you more than 10 percent above that estimate without your consent. If the final bill creeps past the estimate plus 10 percent, you are entitled to refuse the extra unless you agreed to it. This is an Ontario rule; other provinces handle estimate overruns differently or through general contract law, so check yours.
Cooling-off rights
A cooling-off period is a window to cancel a contract for any reason. The key point: for renovation work it usually applies only to direct agreements, meaning ones signed at your door or over the phone, not ones you sign at the contractor's office.
- Ontario: the Consumer Protection Act gives a 10-day right to cancel a direct (door-to-door) agreement. If a contractor knocks on your door and you sign on the spot, you have 10 days to back out.
- A contract you sign in person at a showroom or office typically has no statutory cooling-off period in Ontario.
- New-home purchases are separate and have their own rescission rules: Ontario condos have a 10-day cooling-off period, BC pre-sale homes have a 3-business-day rescission period (with a small fee). Ontario's 10-day cooling-off for new freehold homes is legislated under the Homeowner Protection Act, 2024 but is not yet in force as of 2026.
- Other provinces mostly tie renovation cooling-off rights to door-to-door and remote sales too, but the days and the details differ. Check your own consumer-protection office.
The holdback right almost nobody uses
Every province with a construction or builders lien act gives you, the owner, the right (and often the obligation) to hold back a percentage of each payment. In Ontario the basic holdback is 10 percent of each payment, retained until the lien period has passed and any liens are cleared. Holding back protects you twice: it is your leverage if there are deficiencies, and it shields you from lien claims by unpaid subcontractors even after you have paid the main contractor. Build a holdback clause into the contract and release it only after the lien period ends, the work passes, and you have a statutory declaration that all subcontractors and suppliers have been paid.
Common mistakes
- Paying 100 percent up front. Stage payments against milestones and keep a holdback.
- Working on a handshake. Without a written contract you have far less to stand on.
- Assuming you have a cooling-off period. For an office-signed renovation contract in Ontario, you usually do not.
- Releasing the holdback too early. Wait for the lien period and the sign-off.
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