🚩 Common Renovation Scams to Watch Out For

May 2

1. Upfront Cash Demands

A reputable contractor may ask for a deposit (typically no more than 10–15% in Canada), but large upfront cash demands are a major red flag. Scammers often take the money and disappear or never finish the work.

2. No Written Contract

Avoid anyone who says, "We don’t need paperwork — trust me." Without a clear, detailed contract, you have no legal protection if something goes wrong.

3. Fly-by-Night Contractors

These are people who show up after a storm or in booming real estate markets, often without a business license or online presence. They may do poor-quality work — or none at all — and vanish once paid.

4. Inflated Invoices

Some scammers take advantage of mortgage renovation funds by submitting exaggerated invoices for low-quality or incomplete work, hoping you won’t check the details.

5. Pressure Tactics

Be cautious of anyone who pushes you to sign quickly or says they have a “limited-time offer.” Pressure is a tactic used to avoid scrutiny.

🛠️ Using Mortgage Funds: What’s the Risk?

When you finance renovations through your mortgage, you’re working with borrowed money — and in most cases, the lender won’t release it all at once.

If a contractor disappears mid-project or delivers shoddy results, you could still be responsible for paying back the loan — even if the renovation never gets finished.

✅ How to Protect Yourself

1. Work with Verified, Insured Contractors

Check references, online reviews (like Google, HomeStars, or TrustedPros), and verify that they’re insured and licensed in your province.

2. Use a Written Contract

This should clearly outline:

Scope of work
Materials used
Payment schedule
Completion timeline
Warranty details

3. Stage Payments Based on Progress

If you're using a purchase-plus-improvements mortgage, funds are usually released in stages based on project completion. Don’t advance money unless work has been inspected and approved.

4. Get Multiple Quotes

Don’t settle for the first price. Comparing estimates helps you spot inflated bids or suspiciously low ones that may indicate shortcuts.

5. Document Everything

Keep copies of contracts, invoices, communication, and photos of work done. If you need to report a fraud or dispute charges with your lender, this will be essential.

🧾 Bonus Tip: Talk to Your Mortgage Broker or Lender First

Lenders often have strict requirements for how renovation funds are handled — including approved contractors or required inspections. Speak with them before starting any work, or you may risk delayed funding or denied reimbursement.

Georgia .