Why paying 'under the table' for construction or renos is NOT a better deal!

A cash deal means a lot more risk for you,
and far less control over how your project turns out.
And that’s no deal at all.



When a project goes wrong, repercussions can often cost much more than the original perceived cash savings.  If you pay cash, with no receipts, you have no warranty, no recourse for poor workmanship or damages to your home, and no Capital Gains Tax advantages when selling.  Too many homeowners fork over big bucks for work that never gets done or is done poorly, or for materials that never make it to the job site.  And Mike Holmes won’t be there to help out when your dream project turns into a nightmare.

If a contractor is working “off the books”, he also wants to avoid bringing any attention to his activities by obtaining the proper building permits. If permits are not in place and building codes not followed, and the municipality finds out, the homeowner will be considered the party who is at fault.  If the work does not meet code requirements, the municipality can (and often does) order it to be torn down, at the homeowner's expense. If any laws are broken, this is the homeowner’s responsibility.  Not having a current building permit for a project also means that the proper inspections are most likely not going to get done at various stages of the project, and can mean very costly surprises later on. 

If proper warranties, contracts or permits are not in place, your insurance company may deny any liability and claims, leaving you with no recourse except to pay the expenses from your own bank account.  

When you agree to a cash “discount”, you are also hurting the honest business owners who create employment and make investments in your community, by undermining competitiveness with a price that does not reflect true value.  The construction and renovation industry is one of the largest contributors to the Ontario economy, and when that industry is compromised, our economy suffers, particularly when contractors on a local level can’t compete with those who are doing business illegally.

Contractors who participate in the “underground economy” avoid their tax responsibilities at your expense, and place an unfair burden on all law-abiding taxpayers. Unpaid taxes mean less money for programs such as health care, childcare, employment insurance, and pensions. These contractors are also likely to pay their employees’ wages in cash, to avoid paying their portion of employment insurance premiums and Canada Pension Plan contributions, as well as Workers Compensation fees, depriving their employees of these important benefits. It’s unlikely, too, that unprofessional contractors are involved in any Safety Standards Training.  For the homeowner, if a jobsite injury occurs where no benefits are in place, it can mean expensive and stressful lawsuits, hefty Ministry of Labour fines and court-ordered payments to the injured party.

Don’t be fooled into thinking that it is only a high-priced project that needs safeguards.  A contractor who avoids his legal obligations is often less knowledgeable, and less conscientious, especially when he knows that he can sidestep any liability.  It’s not as uncommon as you might think that a $500. plumbing job turns into a $5,000. + water damage repair, or a $200. electrical “fix” causes a fire that damages or destroys a home, or lack of safety precautions on a small renovation that results in a worker being disabled.  

Home renovation and construction is a complex process.  As a consumer, you need to know that your interests are protected. You want to work with a reputable, professsional contractor – one that treats you fairly and honestly, puts their promises in writing, and backs up their work. You should not deal with anyone who offers a special price if you pay cash and offers no security.

A cash deal means a lot more risk for you, and far less control over how your project turns out. And that’s no deal at all. The bitterness of poor workmanship lasts longer than the sweetness of an artificially low price.

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