Know What a Proper Builder Contract Should Contain

Imagine signing a contract to build your dream home in Toronto—only to realize halfway through that no one ever discussed warranty coverage, timelines, or who’s responsible for what. That’s the danger of vague or incomplete proposals.

In this section of our 7-Step Guide to Starting Your Toronto Home Renovation, we break down what a proper builder proposal should include—and why getting these details in writing is essential.

Why the Contract Matters

Your builder’s proposal/contract is more than just a quote—it’s a preview of how your renovation will be managed. A well-prepared, detailed proposal demonstrates professionalism, transparency, and planning discipline. If your builder hands you a 2–3 page document, that’s a red flag.

A complete proposal for a major home renovation should be at least 10+ pages and include scope, specifications, timelines, and legal protections. Many reputable builders include detailed breakdowns of site preparation, demolition, foundation work, framing, mechanical systems, finishes, and general conditions—with line items, allowances, and clear descriptions for each.

What Every Good Contract Should Include

Construction Drawings and Designs
Architectural and structural drawings should be attached or referenced. For example, “City Stamped Drawings for Permit #24-123-456 by Architect ABC” ensures everyone is working from the same approved plans.
Material Specifications
Itemized lists for flooring, cabinetry, millwork, windows, roofing, and even allowances for stone or tile. This avoids disputes over quality levels or product substitutions later.
Cost Breakdown
A professional proposal shows a category-by-category breakdown—labour, materials, subcontractors, permits, project management fees, and allowances. In a cost-plus agreement, percentage markups should also be disclosed.
Project Timeline
Clear start and completion dates, plus milestone targets. In Toronto, where weather and permit delays can be a factor, the contract should explain how schedule adjustments are handled.
Payment Schedule
Milestone-based payment triggers (e.g., deposit, after framing, after drywall) reduce risk for both parties. The contract should also address late payment penalties and interest.
Insurance and WSIB
Proof of liability insurance (often $3M per occurrence) and WSIB coverage protects you from potential legal or financial liability.
Warranty Information
Spell out the length of coverage (e.g., two years from completion), what’s included/excluded, and special conditions—like maintaining humidity levels for hardwood floors.
Change Order Process
A clear system for requesting and approving changes in scope, cost, or schedule helps avoid “he said, she said” disputes.
Dispute Resolution
Professional contracts may reference Ontario’s adjudication process under the Construction Act, offering a faster alternative to litigation.

Expert Tips for Reviewing Builder Proposals

Ask for a Sample Contract Upfront – See the builder’s typical level of detail before you commit.
Get Legal Review – Have a lawyer confirm the terms protect your interests.
Compare More Than Prices – A “cheaper” bid missing key details often costs more in the end.
Look for Specifics, Not Assumptions – Phrases like “as required” without detail can hide surprises.

Toronto Insight: Why Details Matter More Here

Toronto’s mix of older homes, strict zoning, and high construction costs means that unclear proposals can quickly lead to delays, change orders, and cost overruns. Builders familiar with the city’s permitting process, inspection requirements, and neighbourhood quirks will prepare more thorough documents—and those details will protect you.

The Takeaway: The Right Contract Sets the Stage for Success

A comprehensive proposal isn’t just paperwork—it’s your roadmap to a smooth renovation. It ensures expectations are aligned, reduces risk, and keeps your project moving forward without costly misunderstandings.

Coming Up Next: Step 7 – How to Choose the Right Team.