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The Cash Deal Contractor

We hear about this all the time in the renovation industry and after 40 years of being in the business I still don't understand what the attraction of the cash deal is to the consumer. I know it must sound like we're only concerned about losing customers to this illegal activity, which of course we are, but the concern is much greater than that. The liability and exposure a consumer puts themselves in when entering into a cash relationship with an illegitimate contractor is indeed a serious concern.

First off, cash does very little for a legitimate contractor and the suggestion of it puts us in an awkward and let's face it, illegal position. We still need to pay suppliers, sub trades, payroll and our government remittances etc. and cannot do this with cash funds. Therefore, it is of no real use to us.

To the consumer, you save what? A little bit of tax dollars in order to expose yourself to a whole list of possibilities that could come into play and in the end make you wish you had never thought of entering ito a cash deal relationship. Allow me to explain.

The cash contractor usually operates this way because for some reason they feel they have to. They may have been sued before, are under investigation, their accounts may be frozen by the government or for some other reason cannot operate legitimately. Or, this is a side business they are not claiming as income. For any of these reasons, is this the type of entity you want working on your biggest investment?

You would be safe to assume they do not carry any liability insurance, nor would any of the subtrades working for them and should something happen while they are working on your house, you would be liable for everything with no recourse to the contractor as this was a cash deal which means there is likely no contract in place to give you an amount of protection.

As the cash contractor is unlikely fully trained and up to date on current codes and building practices and we know there won't be any permits and inspections on this, you are putting your home insurance in jeopardy because when they find out that the work was done in this manner you will likely not be covered.

My biggest concern, however, is WCB coverage. In the event that someone is injured while working on your home under a cash deal (which is more prone to happen here as safety protocols and proper training surely isn't on the cash contractors mind) you, the homeowner, could be held responsible for all costs associated with this injury and potential rehab of the worker. Is this really worth? Just to save a few tax dollars.

As I am limited in my column to educate you fully on this matter, I've highlighted just a few of the major concerns when dealing with the cash contractor. We have not even touched on quality control, deposits lost, subtrade liens on your property for not being paid, and the list goes on.

My advice to you when considering a renovation is not to think of the tax dollars as tax dollars but more as insurance against potentially losing everything. It's a small price to pay.

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