My contractor is asking for payment before completion, what should I do?
- coraliefortin076
- Jul 1
- 5 min read
When you undertake a construction or renovation project, the relationship with your contractor is based on trust, but also—and above all—on solid contractual foundations. At Plan Maison Québec, we assist hundreds of families each year in designing plans for houses, cottages, and garages across Canada. One of the recurring issues our clients face is contractors' requests for advance payments. Is this legal? Is it reasonable? And, most importantly, how should you react if this happens to you?
In this article, we'll unpack this issue to provide you with the tools you need to avoid unpleasant surprises and protect your investment.
Basic rules regarding payments in a renovation or construction project
Before even discussing advance payments, it's important to understand how payments should normally be structured in a construction or renovation project. In Quebec, as elsewhere, the contract between you and the contractor is the legal basis of your agreement. This document must indicate the total cost of the project, the stages of completion, the timelines, and the payment terms.
In most cases, payment is made according to a pre-established schedule. For example, an initial payment may be required upon signing the contract, followed by progressive payments as the stages are completed, and a final balance upon completion of the work.
At Plan Maison Québec, we always recommend that our clients ensure these terms are very specific in the contract and that nothing is left to chance. This is one of the best ways to protect yourself against unforeseen demands.
What the law says about payments before completion of work
The law does not require you to pay a contractor for work that has not yet been completed. This doesn't mean that a contractor isn't entitled to request a deposit, but this request must be justified, reasonable, and, above all, clearly stipulated in the contract. The Office of Consumer Protection recommends never paying more than what has been completed or delivered.
Contractors often request a deposit to cover the purchase of materials, but this amount should remain limited (often around 10 to 15% of the total cost). If the contractor asks you to pay a significant portion (or all) of the work before it is completed, this could be a red flag.
At Plan Maison Québec, we have seen too many cases where clients have paid in advance, only to end up with abandoned projects or botched work. Be vigilant.
Why do some contractors ask for advance payment?
There are several reasons why a contractor might make such a request. Sometimes it's simply a need for cash to cover unforeseen expenses or to purchase expensive materials. Other times, it may be due to poor financial management or even questionable intentions.
It's important to differentiate between a serious contractor, who is transparent about why they need advance payment, and one who seems to avoid questions or puts pressure on you. The attitude of the person you're talking to will speak volumes about their intentions.
What are the risks to be paid before the end of the work?
Advance payment presents several concrete risks:
Abandonment of the project: If the contractor receives the money and decides not to complete the work, you will be in a very difficult position to get them back or recover your money.
Non-compliant work: A contractor who has already been paid no longer has any incentive to meet the promised quality or deadlines.
Legal disputes: Without proof that the payment was justified or provided for in the contract, legal proceedings can become lengthy, costly, and uncertain.
It's important to remember that even in cases where you win in court, you will often have to advance the costs to assert your rights. And recovering a debt from an insolvent contractor can be virtually impossible.
How should you react if your contractor asks you for advance payment?
The first thing to do is not to panic. Even if the request seems sudden or insistent, it's crucial to take a step back and assess the situation objectively.
Return to the contract: Is the requested payment stipulated in the contract? If not, you have the right to refuse.
Request a written justification: The contractor must be able to explain why they require payment before completion. Request a detailed quote or an official document, and make sure it covers verifiable elements (such as the purchase of materials).
Negotiate guarantees: If you're considering accepting payment, make sure you have solid guarantees in return. This could include a formal contract amendment, penalties for delays or poor performance, or a higher retention amount upon completion.
Consult an expert: Before making a decision, speak with a lawyer, notary, or construction consultant. The Plan Maison Québec team can also refer you to trusted partners specializing in legal or contractual matters.
The retention money: an essential tool
A good practice is to retain a portion of the total amount until the work is completed. This retention, often around 10 to 15%, allows you to assess the quality of the work before paying the balance. You can even link this payment to a final inspection or the receipt of a certificate of compliance.
This method holds the contractor accountable and gives you concrete leverage to ensure that everything is completed according to standards. At Plan Maison Québec, we systematically encourage the inclusion of this type of retention in our clients' contracts.
Beware of “extras” and unforeseen costs
Another common pitfall in renovation or construction projects is additional costs, often referred to as "extras." These are additions that weren't included in the initial contract and can quickly balloon the bill.
Some unscrupulous contractors use extras as leverage to obtain more money, sometimes even before the work is completed. This is why it is essential that any request for changes to the project be documented, costed, accepted by both parties, and included in the contract.
Plan Maison Québec helps its clients anticipate these situations by developing precise, detailed plans that meet the standards of professional contractors. A good plan minimizes the risk of surprises and strengthens your negotiating position.
What if you have already paid?
If you gave in to pressure and paid a significant portion of the work before completion, all is not lost, but you must act quickly:
Document everything: Keep emails, invoices, proof of payment, progress photos, etc.
Send a formal notice: If the contractor is late in completing the work, a formal notice can remind them of their obligations.
File a complaint with the appropriate authorities: The Office de la protection du consommateur or the Régie du bâtiment du Québec can assist you with certain procedures.
Consult a lawyer: You may be able to resort to Small Claims Court if the amount at stake allows.
Conclusion: Prevention is better than cure
The construction and renovation industry can be fraught with challenges, especially when large sums of money are involved. If your contractor asks you for payment before the work is completed, be vigilant, informed, and above all, surround yourself with the right experts.
At Plan Maison Québec, our mission is to offer you much more than quality plans: we support you every step of the way in your project by providing you with concrete tools for success.
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