Should I renovate my home with cash or with a contract?

As many individuals enjoy spending time and money making sure that their homes are an enjoyable place to live, everyone wants to save money wherever they can. For example, if a homeowner wants to renovate their bathrooms or update their kitchen, between multiple contractors, the lowest quote could happen to be a cash deal. It might sound like a great idea to proceed with the renovation, but unfortunately you are a agreeing to a nothing-written down contract where the contractor can’t be held responsible if things go sideways.  Always be weary of a cash deal.

Why you should avoid a cash deal

Most commonly, a cash deal comes to play when someone offers to do the work for the least amount of money. They ask for cash, and nothing gets written down in the process. The business that does cash transactions will not claim the income and ultimately avoid paying taxes altogether. This process is illegal, and most likely the business won’t have the proper insurance and a legal business licence as well. 

Even though that a cash deal may be the cheapest quote, a cash deal means that there is no paper trail if legal issues arise. There will be no receipts, no contract in place, and almost guaranteed no warranty on the work completed. With no proof of payment, there is no way to hold the home contractor accountable for the work that he promised would be completed on your home. 

The risks of a home renovation with a cash deal

1. Most commonly, the biggest issue with a cash deal renovation is unfinished or poor workmanship. Companies exist for a reason. They are good at a specific task they perform and can make money doing that task. If an unqualified contractor exists in a specific field, they wouldn’t be hired, and the business would dissolve over time. Hiring someone for cash will most likely get you an unqualified contractor. 

2. Unfortunately, it is hard to hold the contractor responsible to any warranty claims. Based on promises alone, if any issues arise due to faulty manufacturing or poor installation, it can be very hard to get the individuals back to remedy the problems. Having a good reputation for a business will almost guarantee the contractor coming back to fix any issues.

3. If physical injuries occur, or damage happens to your home in the renovation, you may be held responsible to fix the problems. With no WCB, the homeowner is responsible to pay for any medical injuries and the appropriate treatments if the damage occurs on your property. If issues happen during the construction process, the homeowner is held liable if no business insurance exists. 

How to have a smooth home renovation

The most important step to take to ensure a risk free renovation is to do your research. You should get at least two quotes and make sure there will be a contract in place. The contract should outline what the contractor is responsible for, as well as the homeowners responsibilities. The business hired should have the proper insurance, business licence and WCB for its employees. 

When hiring the professional, read reviews to verify that the contractor is right for the job.