Hiring a contractor

Prepaid contractors

There are special rules for contractors who accept money before work is complete and discuss or finalize a contract away from their normal place of business (i.e., your home). These contractors are considered prepaid contractors. They must be licensed by Service Alberta and post a security.

• Find out if a contractor is licensed as a prepaid contractor

Get written estimates

Get written estimates from more than one business. A written estimate should include:

• a complete description of the work that will be done
• the type and quality of materials that will be used
• the project start and completion dates
• itemized costs and the total price
• a statement of any guarantees made by the contractor
• the required method of payment

Hire qualified tradespeople

Check the qualifications of the tradespeople who will do the work. A qualified tradesperson will have a pocket certificate issued by the Government of Alberta

Check for insurance

• Make sure the contractor and tradespeople have Workers' Compensation Board (WCB) coverage. Ask for the WCB number.
• Ask to see an insurance certificate showing public liability and property damage coverage for all workers on the job. If uninsured workers hurt themselves on your property, you and the other party would have to agree on who is liable. If there is no agreement, legal action may be needed.

Avoid contractors who

• knock on your door to tell you they just happen to be working in the area and can give you a special price (most problems relating to home renovations involve contractors who solicit contracts door-to-door)
• promise a discount if you allow them to use your home to advertise their work (the contractor has probably made the same offer to everyone)
• quote a price without seeing a job
• demand a large down payment to buy materials (most reputable contractors maintain charge accounts with their suppliers)
• refuse to give you a written contract outlining what they will do
• provide a post office box as their address or an answering service for a telephone number
• will not commit to a specific start and completion date

Check into permits

• Check with local government to determine if permits or inspections are needed and, if so, at which stages.

Sign the contract

• Verbal contracts are hard to prove. Always insist on a written contract.
• Fill any blank spaces on the contract with NA (not applicable). Strike out anything you don't agree with and make sure you and the contractor initial the changes.
• To ensure you are protected, consider having the contract reviewed by your lawyer.
• Once you sign a contract, it is legally binding. Be certain you and the contractor agree on the details of the work to be done, the materials to be used and the timing of the project before you sign.
• The formal payment schedule should be clearly outlined in the contract. Most contractors will ask for a deposit or down payment.
• Find out if this is refundable and, if so, under what conditions.
   

Changes to the contract

• Ensure any changes to the contract have your written approval and a signed statement from the contractor giving the increase or reduction in cost.
• If you are borrowing money to pay for the work, find out if someone from the financial institution must also approve any changes.

Contract checklist

The information below should always be included in a home renovation contract. There are additional requirements for prepaid contracts.

• A detailed description of the work to be done. Include blueprints if appropriate.
• A statement of the type and quality of materials to be used
• A statement of any work that is to subcontracted (i.e., plumbing and wiring)
• A statement that identifies who is responsible for getting all necessary permits and ensuring that inspections and approvals by local authorities will be done at the proper times. The homeowner is ultimately responsible for making sure necessary permits are in place before work starts.
• A statement that all work will be done according to local codes.
• A statement that the contractor is responsible for removing all debris as soon as construction is completed.
• A clearly itemized payment schedule including any hold-back provisions under the Builders' Lien Act.
• A statement of all warranties explaining what is covered, for how long and what will be done if there are problems.
• A Certificate of Insurance showing the contractor's public liability and property damage insurance.
• If the renovations involve a substantial amount of money, you may want to consider additional protection such as a performance bond in the event the contractor fails to complete the work.
• The contractor's Workers' Compensation Board number.
• A statement outlining any cancellation rights.
• A statement outlining how problems will be resolved.

If you have questions

Hiring a contractor or home inspector, and how to file a complaint | 1-877-427-4088.

Consumer Quick Tips: Home Improvements - what you need to know