As the unofficial start of the holiday shopping season — Black Friday — has come and gone, Manitobans are now fully engaged in preparing for the holidays. All Manitobans love great deals. We do our homework and find the best possible deals and we aren’t shy about trying to make those deals even better. However, sometimes what looks like a great deal is not a deal at all but rather a recipe for disaster.
There are some key points to remember when you are getting a "really great deal" on home renovations, especially on "cash deals" where the person doing the work is being paid "under the table". These deals usually mean no taxes are paid and no permits are taken out for the work done. Having no receipt and no contract also means that there is no record of the work being done. If your contractor cuts a few corners and uses substandard materials, you have no recourse because there was no formal agreement. If the workmanship was shoddy or the renovation caused some damage to your home, there is no formal record of the work ever taking place. If you encounter problems a month or two down the line, don’t bother calling the person who originally did the work. Technically, they were never there. And rectifying a poor job can cost you more than having the job done right in the first place.
Not taking out the proper permits can also lead to issues further down the road, especially if you look at selling your home. Work done on undeveloped areas of you home, usually basements, require permits if there is any structural, electrical or plumbing work done. The City of Winnipeg recently passed amendments to its building bylaw and will soon require permits for any type of renovation work that is being done to an unfinished area of an existing home. If you have work done to finish a basement or attic without the proper permits and look to sell your home, it could lead to issues in terms of finalizing a sale or put the new home buyer in a position of applying for permits on work already done and then added cost of rectifying any issues if the work was not done properly. Legitimate contractors take out all necessary permits and ensure that a licensed tradesperson does the necessary work. Using a legitimate contractor that ensures the work is done properly and is properly permitted, combined with a written contract, are your best insurance as a consumer.
It is in your own best interest to protect yourself when it comes to renovations. When you hire a contractor, get a signed contract with the GST/HST number on it, a detailed warranty and a receipt for all amounts paid. Also make sure your contractor has liability insurance and workers’ compensation coverage for all workers entering your home.
Don’t assume your home insurance will cover the costs if something goes wrong. Imagine you had a roofing company working on your home and someone fell and was injured. Without workers’ compensation coverage and a clear contract, you could be held responsible, possibly sued and your home insurance might not cover you. If that same worker wasn’t injured but accidentally caused a fire or a leak in the roof that resulted in water damage, you might be paying out of pocket to fix the damage if your contractor doesn’t have liability insurance.
Make sure you get it all in writing from your renovator contractor by having a contract and getting receipts. And make sure you protect yourself from future costs by taking the right precautions. When a cash deal is "too good to pass up" on a renovation, be aware that it may end up costing you much more down the road.
Lanny McInnes is president of the Manitoba Home Builders’ Association.