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"Cash Only" home reno's and repairs - BEWARE!

Blog by Diane Cardoso | December 29th, 2011

There are significant risks to a home owner when paying "Cash Only" for home renovations and repairs.  Here are some items to consider and be aware of before hiring a contractor on a 'cash only' basis:  1) Lack of Insurance for workers.  You as a homeowner may be liable for medical and rehab costs, if the renovator is not insured. 2) No contract in writing. When there is no contract, there is no warranty protection and/or if the work done damages your existing home. 3) Home insurance invalidation. Your home insurance may not cover any damage caused by a cash only renovator. 4) By-Law and code violations. Repairs from cash only renovators may not comply with the BC Building Code, including Fire, Electrical codes and zoning bylaws. The local government can issue a stop work order with repairs to be redone or removed. 5) Canada Revenue Agency. Tax evasion is illegal and if found, the home owner could be involved in a lengthy and costly process, and if found liable, you could be subject to fines and jail time.  6) BC Builders Lien Act.  Under Sec 4, a home owner is required to withhold 10% of the total value of the work done in case the renovator doesn't pay his suppliers or sub-contractors.  In cash only transactions, the home owner doesn't have this protection.