When homeowners repair or renovate, cash deals are all too common. “Pay me cash” contractors shave their prices by eliminating taxes and consumers pay less and get a better deal. Or do they?

There’s a definite downside to cash deals — the increased risk for homeowners. When you hear about renovation nightmares, odds are this involved a cash contractor. And most times, the homeowners who got ripped off weren’t able to do anything about it.

Fortunately, you can protect yourself by hiring a professional and getting your agreement in writing. Remember that contractors who work for cash ignore the rules — and this goes way beyond not paying their taxes. Before you consider hiring someone for cash, learn more about these common practices of cash operators that could cost you money:

1. The work is never started or left unfinished. After a large down payment or progress payment in cash, the contractor disappears forever.
2. Shoddy work and products. The contractor does as little as possible, using cheap materials. Because nothing is written down, there’s nothing you can do about it.
3. No permits and inspections. You may have an illegal project on your hands or one that doesn’t measure up to current codes and standards. What happens when you resell your home? Is it safe? How do you know?
4. No workers’ compensation. If someone gets hurt on the job, you may be financially responsible.
5. No builder’s insurance. If your home or adjoining property is damaged, the cost of repairs may come out of your pocket.
6. No warranty and no follow-up service. The contractor is nowhere to be found and doesn’t respond to your calls.

The Canadian Home Builder’s Association offers Canada’s best free and unbiased information on how to hire a contractor the smart and safe way. Find more information at www.getitinwriting.ca and for even more renovation tips, visit the Renovations section of our blog.