Contractor Deposits and Payment Schedules in BC

A deposit and a payment schedule decide who carries the risk while a renovation is underway. This guide explains what a deposit is actually for, what BC law does and does not cap, and how Kelowna homeowners can set up staged payments that keep the money in step with the work.

What a deposit is for

A deposit is money you pay before the work starts. Contractors use it to hold your place in the schedule, order materials, or pay for specialty items that have to be ordered in advance, such as windows, cabinets, or flooring. For the contractor, it shows the job is real. For you, it is the riskiest money in the project: if the contractor stops showing up, the work stalls, or the business closes, money already paid is much harder to recover than money you never handed over. That is why the size of the deposit and the conditions attached to it matter as much as the total price.

What BC law says about deposits and contracts

BC does not set a general deposit limit for home renovation contracts. Consumer Protection BC explains that outside certain door-to-door sales, BC law does not specify how much a business may charge as a deposit, so the amount is something you negotiate and write into the contract. The one deposit cap that does exist applies to door-to-door sales, also called direct sales contracts: a deposit cannot be more than $100 or 10% of the total price, whichever is less, and being asked for more can give you a right to cancel. That cap does not automatically cover a contractor you contacted yourself or invited to your home, so if a door-to-door sale is involved, confirm the current rules with Consumer Protection BC.

• Home renovation contracts are commonly future performance contracts under BC's Business Practices and Consumer Protection Act — contracts where the total price is over $50 and you pay all or part of the price before all the work is finished.
• BC law requires certain information to be in those contracts, including a description of the goods or services, an itemized price, the total price, and the terms of payment (the payment schedule and the amount of each payment).
• You are entitled to a copy of the contract: for future performance contracts, it must be provided within 15 days after the contract is entered into.
• If required information is missing, you may have a right to cancel. Cancellation rights are limited once work has started, and disputes after that typically go to the Civil Resolution Tribunal or the courts.
• Claim limits are set by law and can change, so check the current claim limit before you file.

A payment schedule that protects both sides

A good schedule ties money to visible progress rather than to dates or promises. That protects you from funding work that has not happened, and it protects the contractor from financing the whole job out of pocket. The schedule belongs in the written contract, with the amount, the stage, and what has to be complete before each payment is made.

• A modest deposit when the contract is signed, connected to real upfront costs such as ordering materials or reserving the crew.
• A payment when the first stage is finished and you have seen it, such as demolition and site preparation, or rough framing and rough-in.
• Further payments at clear milestones, such as passing an inspection, drywall and finishing complete, or fixtures installed.
• A final payment large enough to matter, released only after a walk-through and after any deficiencies are corrected.
• The 10% holdback, kept back from progress payments and released only after the holdback period described below.

The holdback idea, in plain words

BC's Builders Lien Act protects the people and suppliers a contractor hires. If the contractor does not pay a subcontractor or a material supplier, that person can file a builders lien against your property. The Act handles this by requiring the person paying the contractor to hold back 10% of the payments to the contractor. The holdback period runs 55 days from completion (or from the date a certificate of completion is issued), and an unpaid subcontractor or supplier can file a lien within 45 days. If no lien is filed, the holdback is released to the contractor. If you have already paid the contractor in full when a lien appears, you may have to pay again to clear it, so keeping the 10% in your own hands is what limits your exposure. This is a simplified picture; for your own project, confirm the details with the relevant authority or a lawyer.

Red flags worth pausing for

• A large cash deposit, or pressure to pay in cash without a receipt.
• A request to pay a personal account or personal name instead of the business, with no invoice or receipt.
• Being asked to pay for materials that are not on site or have not been delivered.
• No written payment schedule in the contract — just a total price and a request for money.
• Pressure to make a progress payment before the work it covers has actually been done.

Where to start in Kelowna

Before you sign anything, ask each contractor for a written contract that spells out the deposit, the payment schedule, and what counts as a completed stage. Compare more than one quote for the same scope, check the business's insurance and workers' coverage, and agree in writing that the final payment and the 10% holdback are released only after the work is done. You can browse general contractors, roofers, and flooring companies on this directory, look at the contact details and credentials each business has provided, and ask every shortlisted contractor for the same written schedule so the quotes are easy to compare.