Five Red Flags When Hiring a Contractor

A major Canadian Bank’s research discovered that 80% of people in the market to do renovations to their home do not trust contractors. That’s not surprising. We hear so many horror stories from people who call us. Stories about contractors that have left a job unfinished, sometimes not even started, with large payments already made. Contractors who don’t come back to repair issues.

The good news is that there are good contractors out there. We’re not the only contractor you can trust. But there are signs to watch for if you want to avoid the bad ones. There are red flags that should set off alarm bells.

They say you don’t need a permit

It’s true not every renovation project needs a permit. If you’re simply doing something like replacing kitchen cabinets without any electrical, plumbing, or structural work you can do those types of projects. But if your kitchen reno requires a load bearing wall to be taken down, or some major plumbing or electrical changes you’re going to need a permit.

If your reno is going to require any major electrical or plumbing work (things bigger than changing a light fixture or a faucet), if it requires any heating and ventilation changes, if it requires major structural changes to your house, like removing a load bearing wall or finishing a basement, you’re going to need a permit.

We always tell our homeowners, don’t put yourself and your family at risk by trying to save a little bit of money by not getting a permit. Many times, you can apply for a permit yourself and it will only cost you a few hundred dollars.

If a homeowner does a project without a permit and there’s a liability issue that arises due to an accident or poor workmanship, they open themselves to the high probability of their insurance claim being denied, and sometimes even legal action.

It’s not worth doing any project without a permit when one’s required.

If you’re interviewing a contractor and their trying to convince you that, “You don’t need a permit. It’s just a money grab by the City.” Be on the alert.

They want you to pay them in cash

We once had a homeowner ask if he could pay us in cash. I said, “No problem. But I’ll still have to charge you taxes and report to my bank where I got this cash from.” Needless to say, it was the end of that conversation. If a contractor is willing to work for cash and not charge the proper taxes it’s a sure sign that there’s an integrity issue. It’s seldom the case that an integrity issue limits itself to working for cash.

A good contractor will understand their responsibility as a contributing member of society, that tax collection, though not want we might want to do, is in the best interest of all. No one really wants to pay taxes, but we sure appreciate the healthcare, the education, and many other programs our governments use those taxes for.

They don’t have a contractor’s licence or insurance

I’m not aware of any municipalities in Canada that allow renovation work, that require a permit, without the contractor holding a valid licence and valid insurance. Both of these are for the homeowners protection. Perhaps there might be some weekend warriors or small-scale contractors that might have the skillset and knowledge to do some reno work. How do you really know if they’re qualified? You don’t. That’s why our governments and the Canada Building Code requires contractors be licenced and insured.

You might save yourself a bit of money in the short-term to hire an unlicenced contractor. But in the long-term it’s not in your best interest. The liabilities and risks are too high.

They won’t give you a detailed contract

First of all. A contractor should be willing to put it in writing with detailed work descriptions.

Our company is transparent. It’s part of our ethos. When we provide an estimate for $57,267.45, we provide the worksheets that account for every single penny. We provide a material list, labour broken down by tasks, all subcontracting and misc. items. Many contractors might not feel comfortable doing so, but at the minimum they should provide you with some type of breakdown, more than just X amount for labour and Y amount for material.

An unwillingness to share cost information and an unwillingness to be transparent should be an indication that there might be something to hide.

They have no proof they adhere to any specific code of ethics

Someone can tell you they’re a good contractor and that you can trust them. But really. What proof do they have to back that up?

A good contractor will have construction peer groups to keep them accountable. These groups or associations will have specific code of ethics and standards that must be adhered to.  

In the city where we live, Hamilton, Ontario, we’re members of The Canadian Home Builders’ Association and the Ontario Homebuilders’ Association branch’s West-End Home Builders’ Association. We’re accredited by RenoMark, the renovation industries mark of excellence. We’ve earned the prestigious Baeumler Approved designation. Also, we’re an accredited Better Business Bureau company with an A+ rating.

All this to say. A company can’t just say they’re good. They have to be willing to be kept accountable to high standards by independent groups. If a contractor isn’t willing to do that, perhaps it should be a red flag.

We empathize with homeowners that get hurt by bad contractors. Know that there are good ones out there. Hopefully, this will help you find one.