Should I pay a contractor upfront or in installments?

Never pay a contractor the full amount upfront — this is one of the biggest red flags in construction and leaves you completely vulnerable if things go wrong.

The standard practice in Metro Vancouver is to structure payments based on project milestones, typically with no more than 10% down for materials or permits, followed by progress payments as work is completed. Legitimate contractors have established credit with suppliers and don't need large upfront payments to purchase materials.

Recommended Payment Structure

For most renovation projects, follow this approach: Start with a small deposit (5-10%) upon signing the contract, then tie payments to completed work phases. For example, on a kitchen renovation, you might pay 25% when demolition is complete and materials are delivered, 25% when rough-in work (plumbing, electrical) passes inspection, 25% when drywall and painting are finished, and the final 25% upon project completion and your satisfaction.

Under BC's Builders Lien Act, you should hold back 10% of each payment for 55 days after project completion. This "holdback" protects you if the contractor hasn't paid their suppliers or subcontractors, who could otherwise place a lien on your property. Many homeowners don't realize this is their legal right and responsibility.

BC's Business Practices and Consumer Protection Act requires written contracts for home improvement work over $500, and you have the right to cancel within 10 days if the contract was signed at your home. The contract must include detailed scope, materials, timeline, and payment schedule. For projects requiring permits in Vancouver or other Metro Vancouver municipalities, ensure your contractor pulls permits before starting work — unpermitted work can create serious issues when selling your home.

When to call a professional
Be extremely wary of contractors who demand large upfront payments, claim they need money for materials, or pressure you to pay immediately. Legitimate contractors typically have 30-60 day payment terms with suppliers. Also avoid contractors who show up at your door offering deals, quote significantly below others (20%+ lower often indicates problems), or can't provide proper licensing and insurance documentation.

Get at least three detailed written quotes, verify each contractor's WorkSafeBC coverage and business license, and check references from recent projects.