What should I do if my contractor goes over budget?

Budget overruns are unfortunately common in construction, but you have rights and options to protect yourself. The key is understanding whether the overrun is due to legitimate change orders, unforeseen conditions, or poor project management.

First, review your contract immediately. A well-written contract should specify how changes are handled, including a formal change order process that requires your written approval before additional work begins. In BC, under the Business Practices and Consumer Protection Act (BPCPA), contractors must provide written estimates for work over $500 and cannot charge more than 10% above a written estimate without your consent.

Distinguish between legitimate and questionable overruns. Legitimate reasons include discovering structural issues, plumbing problems behind walls, or asbestos that wasn't apparent during initial assessment. For example, opening up a 1960s Vancouver Special basement might reveal knob-and-tube wiring that needs updating, or a Kitsilano character home renovation might uncover foundation issues requiring seismic upgrades under BCBC 2024 requirements. However, overruns due to poor planning, incorrect measurements, or "scope creep" without your approval are not your responsibility.

Document everything and communicate in writing. Take photos of any discovered issues, keep all change orders, and follow up verbal conversations with email confirmations. If your contractor claims additional work is necessary, get a second opinion from another licensed professional. For electrical or gas work, remember that only Technical Safety BC (TSBC) licensed contractors can perform this work in BC.

Know your payment rights under BC's Builders Lien Act. You're entitled to hold back 10% of the contract price for 55 days after substantial completion. Never pay more than the original contract amount plus approved change orders. If a contractor demands payment for unauthorized work, you can refuse until the dispute is resolved.

For resolution, start with direct negotiation, then escalate if needed. Many budget disputes can be resolved by clearly defining what was and wasn't approved. If negotiation fails, the Civil Resolution Tribunal (CRT) at civilresolutionbc.ca handles construction disputes up to $5,000. For larger amounts, you may need BC Supreme Court or consider mediation through the Better Business Bureau.

Protect yourself going forward by requiring detailed written change orders before any additional work begins, and consider hiring a project manager for complex renovations.

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