Your contract should outline exactly what work will be done in the renovation. It should include all drawings that can be done in advance of the project. It should also include a timetable for the project, with start and end dates. A payment schedule is crucial and should be based not on time spent on the job but on measurable milestones (eg, completion of plumbing work, completion of electrical, etc.). Beware of a contract that demands a down payment of more than 10 or 15 per cent.

The contract should indicate whether the homeowner or the contractor will be responsible for securing all the necessary permits, licenses, inspections and certificates for the work. There should also be a clause stating that work will conform to the requirements of all applicable codes, such as building, safety and fire codes.

The contract should spell out your right to hold back a certain percentage of the total cost of the renovation in case a subcontractor places a lien on your home because the contractor has not paid them. You are allowed to hold back up to 10 per cent of the total bill for 30 days, in case something goes wrong after the work is complete.

It should also be stated in the contract that you will not pay any costs above the quote unless agreed to in writing. The contract should be easy-to-read. Typed out is best. There should be no fine print.

You’re taking a big risk if you’re tempted to save some money by forgoing the formal contract and paying cash. Good luck getting satisfaction if something goes wrong after the work is complete. As well, you may be responsible if there’s an accident during the construction.Most provinces allow for a cooling-off period when you sign a contract in your home. You should have up to 10 days to change your mind after you sign a contract.