Renovation Contracts in BC: What Has to Be in Writing

Scope: the section that prevents most arguments

The scope section should be long enough to be boring. It states what is being built, room by room, in enough detail that a third party who has never seen the project could walk in and tell whether it was finished.

That means naming the actual products. Not "quartz countertop" but the brand, series, colour, edge profile, and thickness. Not "hardwood flooring" but the species, width, finish, and grade. Not "tile shower" but the tile size, the waterproofing system, the niche dimensions, and whether the ceiling is tiled.

Where a selection genuinely hasn't been made yet, the contract uses an allowance and says so explicitly, with the allowance amount and what it covers. An allowance for plumbing fixtures should state whether it includes the faucets, the tub filler, the shower valve trim, and the rough-in valves, because those get split differently by different companies and the gap is where a $4,000 surprise lives.

Just as important is what the scope excludes. Every contract we write has an exclusions list. Asbestos abatement, unforeseen structural repair, upgrading electrical service, replacing failed drain tile, and permit fees paid to the municipality are common ones. Excluding something isn't a trick. It's telling the homeowner in advance where the unknowns are so a discovery in week three is a conversation rather than an ambush.

Price structure: fixed, cost-plus, or something honest in between

There are two real pricing models and a lot of muddled versions.

A fixed-price contract states a total. The contractor carries the risk of their own estimating errors and productivity, and the homeowner carries the risk of changing their mind. This is what most homeowners want and what we work under, because it puts the number that matters on the table before demolition starts.

Cost-plus bills actual labour and materials plus a percentage or fixed fee. It's appropriate on projects with genuine unknowns, heritage work being the classic example. It requires a lot of trust and a lot of documentation, and it should always carry a stated not-to-exceed figure. A cost-plus contract with no ceiling is an open cheque.

The version to be careful with is a fixed price built on a stack of allowances so large that the real number is unknowable. If half the contract value sits in allowances, it's cost-plus wearing a fixed-price label. Add up the allowances before you sign, and ask what happens to the contractor's markup when an allowance is exceeded.

Whichever model, the contract must state whether GST and PST are included in the stated price. On a $200,000 renovation the difference is not small, and "plus applicable taxes" buried in a signature block has surprised more than one homeowner.

The payment schedule and the Builders Lien Act holdback

Payments should be tied to completed milestones, not to dates on a calendar. A schedule that says "25% on the 1st of each month" pays for time. A schedule that says "payment due on completion of rough-in inspections, verified by permit sign-off" pays for progress, and only one of those protects the homeowner.

The deposit is worth thinking about. A deposit of 10 to 15 percent is normal and covers mobilization and early material orders. A deposit of 40 or 50 percent before anyone has arrived on site is a financing arrangement, and it means you're funding the contractor's operations. Several of the BC renovation failures that have made the news over the past few years involved exactly that pattern.

Then there's the holdback, which is the piece homeowners most often don't know about. Under BC's Builders Lien Act, an owner is required to hold back 10 percent of the value of the work from every payment. That holdback is released 55 days after substantial completion, provided no lien has been filed. It is not a bargaining chip or an optional retention. It's a statutory obligation, and an owner who pays it out early can end up liable to a subcontractor who never got paid.

The contract should reference the holdback explicitly and show it in the payment schedule. A contract that doesn't mention it is a signal about how the company operates.

• Deposit of 10 to 15 percent, tied to mobilization and material ordering
• Progress payments tied to verifiable milestones, not calendar dates
• 10 percent statutory holdback retained from each payment
• Final payment on substantial completion, less holdback
• Holdback release 55 days after substantial completion, absent liens
• Written statement of whether GST and PST are included

Change orders: no verbal approvals, ever

Every renovation changes. That's normal. What separates a well-run project from a bad one is whether those changes get priced and approved before the work happens.

The contract should say that no change proceeds without a written change order signed by both parties, stating the scope of the change, the cost, and the schedule impact. That last item is the one that gets skipped. A $3,000 change that adds nine days to the schedule has a cost beyond $3,000, and the schedule impact needs to be on the paper.

It should also state the markup applied to changes. If the base contract carries an 18 percent overhead and profit and change orders are billed at 30 percent, that difference should be visible before signing, not discovered on the third change.

The reason this matters isn't paranoia. It's that a verbal approval in a noisy job site between a homeowner and a site lead, at 4 pm on a Friday, is remembered differently by the two people who were there. Writing it down takes four minutes and removes the entire category of dispute.

Insurance, licensing, and WorkSafeBC

Ask for three documents before signing, and actually read them.

A certificate of commercial general liability insurance, ideally $5 million for residential renovation work, with the policy period covering your project. Ask to be named as an additional insured on the certificate for the project, which is standard and free.

A WorkSafeBC clearance letter. This is the one homeowners skip and it's the one with the sharpest teeth. If a contractor is not in good standing with WorkSafeBC and a worker is injured on your property, liability can flow to the property owner. The clearance letter is free to obtain from WorkSafeBC's online system and takes about two minutes to check. Get a fresh one, not a copy from eight months ago.

Business licences for the municipality where the work is happening. The City of North Vancouver, District of North Vancouver, and West Vancouver each license separately, and a company licensed in one is not automatically licensed in another.

If the project involves new dwelling units, ask about BC Housing licensing and third-party home warranty coverage. Renovations to an existing home generally fall outside the mandatory warranty scheme, but new laneway houses, coach houses, and some substantial reconstructions do not.

Warranty, deficiencies, and what happens at the end

The contract should state the warranty period on workmanship, which is commonly one to two years for residential renovation, and clarify that manufacturer warranties on products pass through to the homeowner.

It should also define substantial completion and describe the deficiency process. A good clause says that at substantial completion both parties walk the project and produce a written deficiency list, that the contractor has a defined period to complete those items, and that the holdback release runs from the statutory date rather than from deficiency completion.

One clause worth negotiating: what happens to the deficiency list if the parties disagree. Naming a dispute mechanism, whether that's a mutually appointed third-party inspector or mediation before litigation, turns a bad ending into a manageable one. Nobody wants to think about this when signing, which is exactly why it belongs in the document.

Permits, schedule, and site conditions

State who applies for permits, who pays the municipal fees, and what happens if the permit takes longer than anticipated. In both North Vancouver municipalities a building permit for a substantial renovation can run 10 to 16 weeks in review, and a contract with a hard start date that ignores permit timing is fiction.

The schedule clause should give a start date, a substantial completion target, and a description of what constitutes an excusable delay. Weather, permit delays, owner-directed changes, and material lead times outside the contractor's control are reasonable. "Any delay whatsoever" is not.

Site conditions deserve their own paragraph. Which bathroom the trades use, whether the homeowner is living in the house, what hours work happens, how the site is secured overnight, who handles waste removal, and where materials get staged. On a Lower Lonsdale project with no driveway and permit parking, staging is not a trivial detail.

The clauses to push back on

A few things show up in renovation agreements that a homeowner should question.

Payment terms that front-load heavily, where 70 percent of the contract value is paid before the halfway point of the work. Escalation clauses that let the contractor raise the price for material cost increases without a cap or a documentation requirement. Clauses waiving the statutory holdback. Broad exclusions of consequential damages combined with no warranty period. And any agreement that names the company one way in the header and a different way in the signature block, which usually means you're contracting with a numbered company that has no assets.

Also worth noticing: whether the contract identifies the person who will actually run your project. A company with three site leads produces three different experiences, and knowing which one is yours before signing is fair to ask for.

How we handle contracts

Our agreements run long because the scope section is written to be specific. Products are named. Allowances are listed with what they include. Exclusions are stated plainly rather than buried.

We encourage clients to have a lawyer read it. That's not a common thing for a contractor to say, and it's deliberate. A homeowner who understands what they signed is a better client for the next eight months than one who signed something they didn't read, and the projects that go smoothly almost always started with a slow, unhurried conversation about the document.