Cash-only mentality ruining home improvement scene

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Posted by: from Navan
11/9/2012 at 7:39:24 AM

Why do home owners continue to take chance with their homes?

Why would you let someone work on your home that is worth $200,000, $400,000 or higher just to save a few hundered dollars of HST

From damaged bathtubs, broken personal items to the dog running off we've heard it all and these accidents leave the home owner with no recourse to recoup money to pay for the damage

The home owner got to save a few bucks because they entered an agreement under the table with a company but, ends up spending hundreds and thousands to repair incorrect work or damage to their properties.

A company on your property not paying its taxes is not going to re-imburse the home owner if their trucks leak oil on your inter-lock driveway or puts a ladder through a window

Why would a company care about it's quality of work and adhere to best practices if the home owner doesn't care? No chance they will offer a warranty for their work and if they do they would not honour it as they wont be back if the home owner called.

Why would a company risk their business, livleyhood and that of their employees?

Time for homeowners and business to turn this trend around -

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Date/Time11/9/2012 at 10:00:58 AM

I agree this cash business is a major issue.

I stay away from cash deals because I'm also not protected by our laws once engaged in this type of fraud.

I think the bigger problem is that homeowners want everything their neighbors have and everything on their wish list RIGHT NOW! If its not affordable, people should learn to wait.

We see it more and more in Canada. Homeowners are borrowing more consumer debt to keep up with the jones's or just because money is so cheap at the banks with the current low rates.

This explains why people are so ready to try to save the tax. They know they're already in deep to a creditor and they're trying to alleviate some of that stressful burden by forcing another party (contractor) to take on some risk.

I wouldn't risk it in my personal life and finances so not going to bother with the business. It's true, I have lost work because if my unwillingness to perform the work under those financial conditions. It's tough to find honest people in today's landscape of living on the edge of bankruptcy!

Mostly I blame the television shows that are convincing homeowners they can get these fantastic jobs done for next to nothing. Have you ever seen the cost breakdown at the end of a show. Has it ever shown tax? The answer is NO! Also, the production company is making a great deal more than the job is worth by publishing it for TV so the production expenses large portions of the work themselves.

Basically, I think the tv industry is tricking consumers into thinking work in the real world is inexpensive. The truth is, it's never been inexpensive to renovate and if you can't afford it this year and feel good about it, wait until next year when the cost is more palatable. Don't try to justify the cost by thinking your contractor wants the cash so badly that they'll commit a crime on your behalf.

We all go home to our families at night and we should all feel good about the days work we put in. We shouldn't have to cheat just to exist. If we do, we are living beyond our means.

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Date/Time11/9/2012 at 10:26:56 AM

Good points Dave and Pat

I think that Pat also included the other side of the equation, the Contractor (or trunk slammer) as the case may be that is saying "YES" to these "deals".

My approach is that I tell the client that I often save them more by passing along a portion of my discount to them on the materials I purchase. Only once have I ever been asked to provide the difference to show how much.

For the exception of wire and some basic fixtures, clients get raped for material at the Big Box for most electrical items. It is easy to do.

I do all my jobs above the books. If somebody tells me they want to pay cash right there before I can send them a bill, the bill is sent to show all the fees and taxes included.



John Kuehnl-Cadwell

Master Electrician

Datawise Solutions Inc

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James from Coey Stairs in Milton
Date/Time11/9/2012 at 11:36:27 AM

Its Simple, Lack of licensing.

In the state of Florida there is a $50,000 fine for renovating without a licence!!

To get a licence you must have a state registered company, insurance, performance bonds, and WSIB.

If we had these laws in Canada and a fine for homeowners for hiring unlicenced contractors, Mike Holmes would have to find another line of work!!

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Date/Time11/9/2012 at 2:31:10 PM

I would not be so hard on a homeowner that is trying to save some money. Yes they made the decision to proceed with the contractor even though he turned out to be a shady character. Some of the blame should be on the contractors who quoted the project as they did not do a thorough job in explaining of the pitfalls.

Yes I even think that we, as in all of the contractors and renovators, have also tried a new trade on the basis of their pricing and pitch and also got burnt either with the dollar amount or the materials used and the quality and delivery of their work and finishing quality.

We must continually work hard to inform the consumer/homeowner of the pitfalls in not using professional renovators and licenced trades who are members of their associations or other organizations. We must continue to spread the word although it is a slow process.

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Date/Time11/9/2012 at 6:33:08 PM

Very often it is government employees that ask us for a cash deal. They dont seem to realize that their very livelihood depends on taxes. As your writing clearly explains, if things go wrong, you have absolutely no recourse. We dont do cash deals for anyone for any reason.

Well written.

Paul Justice

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Date/Time11/9/2012 at 7:15:29 PM

I agree they should not take the chance. But I understand the thought process. There are three reasons I hear on a regular bases.

1 If I pay full price I am paying to much.

2 There has to be a cheaper way to do this.

3 I cant afford this.

When it comes to Home owners, education is the best defense. As a reputable company we need to continue to fight the battle of telling, showing and doing the right thing.

I just took a look at a basement development that was built with no permits and no licensed contractors. The condo board found out now they are being told to take it all out or bring it up to code. It would have been cheaper to do it right the first time.

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Owner from Hung Well Doors in Gatineau
Date/Time11/10/2012 at 8:58:12 AM

I am with Pat in that the number of jobs I have lost because I will not do it under the table.

I simply cannot count how many people have asked for the cash deal, it has become a standard question in my field, and I'm sure it is probably the same in all of them.

The contractors are certainly responsible for some of this as they are the ones willing to undercut and work for cash with inferior quality products and craftsmanship, however I cannot feel sorry for the customer when they will compare my products and service with that of the fraudulent contractors or that of the big box stores.

I say stop giving sympathy to the people who enter into these kinds of deals and giving them their 15 minutes to cry foul to the public on the news. Sure expose fraudulent companies for what they are, but be sure to put the responsibility on all parties involved.

You get what you pay for!

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Johnny from Avid Contracting in Oakville
Date/Time11/11/2012 at 8:20:23 AM

I totally agree with you about this trend because I have experienced it myself. Working for residential home builder for many years and just recently losing bids on upcoming sites because of shady low ball companies.

I heard rumors from a key building materials supplier that it is even affecting their sales. Certain companies are asking to pay cash for their materials and trying to avoid a paper trail all together. Honest and certified companies like mine don't have to rely on back door tactics to save cost on a project.

I hope the ministry can do something to help the situation and put a stop to this trend.

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Date/Time12/23/2012 at 1:40:13 PM

Hi guys,

I think we re all singing the same tune, it's because we have experience, and chose to run our business like a business and not a quick get rich scheme.

Over the years I have been involved In different businesses, and I've have always noticed the same problems within these businesses. If a client wants to pay cash it is because :

He doesn't want to pay u, partial or at all.

He doesn't have the money to pay u right now but he may have some of the money when you have completed the job.

He doesn't value honest payment for honest work and chances are your going to get ripped off with time collecting it or only partiall payment.

If we pay tax on everything we buy, why are u passing over the tax paid material. And the tax paid subs, and employees to a person that chooses to reduce his payment to u by 13%. UR cheating your self

There's only so large you can grow, ur business when dealing with cash only. Someone has to remember how much was collected and how much is outstanding

Good luck to all.

I can say I sleep at night knowing, I collect at pay taxes annually.


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Date/Time2/5/2013 at 7:45:45 PM

A lot of the problem here in Toronto is that every fireman, teacher and off duty cop think they are

contractors !!!

They go around doing jobs under the table, undercutting real contractors. I know they would all bitch and cry if us contractors came into the schools during our off season and taught for less money undercutting them.


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Date/Time2/26/2013 at 9:42:56 PM

The truth is that our Government does not really care. They are not concerned about the underground economy. In fact they support it. The WSIB even pushed through a law to the house to mandate WSIB premiums to all proprietors all executive officers who already have their own private insurance at a much lower price. Of course when I ask WSIB why, I am told the new bill will protect us from the underground economy while the average company will see an average of 8000.00 hike per year paying 10.25% on companies net income if they subcontract for other companies. This law passed as of Jan. 1st is in effect.

They only care about money and not us but we pay for their protection against the underground economy. Who protects us from the WSIB. I am certain that if the government would loosen up their dividends on businesses and taxes and promote us and the WSIB was fair and had us in mind and costs were much less, then the cash cows could afford to do business fair too. We would all win. But instead everything will inflate and help insrease the underground trade.

I don't want to come off too sour here but am I the only one feeling this pressure. It feels like for every dollar made 40 cents goes to CRA, WSIB, Insurance and we still have wages and deductions and UI to pay out. Fuel costs are not helping either. All these can only bring our prices up to make the station wagon bandits look more desireable to our customers.

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