A word to the wise before starting renos / how to pay
We’ve cautioned you many times, but this time you’re going to hear it directly from the Ontario Ministry of Consumer Services (MCS.)
“Home renovations are a timely subject” MCS media relations adviser Sandra Bento says. “Last year, the ministry received over 2,000 calls from Ontarians with concerns about their home renovations. Your readers should consider a few key things when pouring money into their biggest investment, their home.”
• If the contact with the contractor is unsolicited, don’t feel pressured to make a decision or sign a contract.
• When it comes to deposits, make sure you have a contract detailing the payment schedule, the specifics of the renovations and the contractor’s business information.
• Keep the down payment to a minimum, usually no more than 10 per cent of the quote.
• Under Ontario’s Consumer Protection Act, consumers are entitled to a 10-day cooling off period, if they signed a contract in their home and the price is more than $50.
Now we know complaints involving home renovations can cover a variety of different scenarios. Sometimes, the contractor takes your money and disappears. That’s the worst case scenario.
Other times, they don’t do what you want. Or, don’t finish the work. Or, don’t honour their warranty. Or, they damage your property and refuse to compensate you.
Let’s keep things in perspective. In 2011, the residential renovation sector contributed more than $23 billion to Ontario’s economy and supported 211,000 jobs.
“Renovations and repairs shouldn’t be left to chance,” the ministry says. “Families can get the best return for their hard-earned dollars by following these tips,” the MCR advises:
• Choose a reputable contractor. Ask for recommendations, check websites like RenoMark, or call your local homebuilder’s association. Reputable contractors will be bonded, will make sure their workers are insured against workplace injuries and will charge HST.
• The lowest quote may not be the best. Have three contractors view the job and give a written estimate. Then check sources like the ministry’s own’ Consumer Beware List.
• Make sure your contract contains key information like the contractor’s name and contact information and start and end dates.
And here’s the minister’s own advice.
“Your home is your castle,” Margaret Best says. “If you are looking for people to help you renovate or repair it, take the time to find licensed professionals known for their reliability and quality of work. Do not take chances — protect your investment.”
Here’s something else you should check out:
• Your renovation or repair may qualify for a government grant, subsidy or tax credit.
• If electrical work is part of the planned renovation or repair, your contractor needs a valid electrical contractor licence issued by the Electrical Safety Authority.
So there you go folks. You’ve been forewarned once again. If you still do business with the guy who wants 50 per cent upfront, offers you the lowest price and no HST … then here’s the guarantee which comes with his work: He’ll more than likely jack up his price before finishing, do a lousy job and ignore you once he has his money.
You’ll call me, the ministry and the Better Business Bureau.
But add the Canadian Revenue Agency to that list, because hitting the bottom-feeders in the pocket is what really bothers those guys. They just hate paying income tax. That’s something other folks do.
But the truckload of tax revenue they remove from the nation’s coffers is why the rest of us pay more for goods and services. They are not your friends.
This article previously ran in the Hamilton Spectator
Renovating your cottage for retirement: how to pay
Your cottage has always been an important part of your lifestyle – and now that retirement is just around the corner, you’re thinking of making cottage life your year-round life. But a cottage built and outfitted for part-time occupancy isn’t always the ideal abode for full-time living, especially through your senior years.
So you’re also probably thinking renovation. And if that’s the case, you’ve got some more thinking – and planning! – to do. Here are a few tips to get you started on a cottage retirement reno plan that works for you.
Construct an enduring design for living. This is going to be your retirement home, so plan for the long term. Select durable, low- or no-maintenance materials. Consider such age-friendly modifications as access ramps, wider doors, lower counters and easy-to-use bathroom facilities. An architect and/or reputable contractor can help you make the right choices.
Set a budget and stick to it. Changes during construction are very costly.
Explore your financing options. You may choose to do the renos yourself or hire a professional – either way, you’ll have to pay for them. Your financing options include:
• Using your credit card for a small reno – but keep in mind, credit-card interest usually exceeds 18 per cent. You should plan to pay the balance to zero when the statement arrives, thereby saving the interest costs.
• Taking out a personal loan at an interest rate and payback schedule you work out with the lender.
• Obtaining a personal line of credit or a secured line of credit based on your equity in the property, with interest charges usually only on the funds you use each month and allowing you to borrow funds as needed.
• Arranging a construction loan. Often necessary for larger projects, the loan is based on an appraiser’s evaluation of the finished residence, with money usually released at specific points during construction.
• Refinancing your mortgage, which can allow you to borrow up to 80 per cent of your cottage’s appraised value.
• Using your investments or retirement funds. Proceed with caution: you may be shortchanging your retirement lifestyle. You could lose money by cashing out investments in a down market or by spending investments that can’t be replaced at the same interest level. And borrowing from your Registered Retirement Savings Plan may not only trigger an immediate tax hit, you’ll also lose years of potential growth.
From the Investors Group library