- Most contractors who vanish after a deposit aren't running a scam — though some are.
- Before you do anything else, reread the agreement.
- Put your demand in writing — email is fine, but a formal demand letter (from you or a lawyer) carries more weight.
You paid a deposit, signed the contract, cleared your calendar — and then nothing. No crew, no materials, no call back. Weeks pass and the contractor who took your deposit never started the job. It's one of the most common complaints Ontario homeowners bring to a lawyer, and it's usually a straightforward breach of contract, not a mystery.
The good news is that Ontario law gives you a clear, familiar path to get your money back: document what happened, demand a refund in writing, and escalate through the courts if the contractor won't cooperate. This article walks through that path step by step.
Why This Happens
Most contractors who vanish after a deposit aren't running a scam — though some are. More often, they've overcommitted to other jobs, run into a cash-flow problem, or simply prioritized a more profitable project. Whatever the reason, once they've taken your money and failed to perform, they're in breach of the contract you signed.
A deposit is meant to secure your spot in the schedule and sometimes cover early material costs. If no work has started and no materials have been ordered on your behalf, the contractor generally has no basis to keep the money.
Step 1: Check What Your Contract Actually Says
Before you do anything else, reread the agreement.
- What does it say about start dates, delays, and cancellation?
- Is there a refund clause, or a clause forfeiting the deposit under certain conditions?
- Did the contractor promise a written start date, and did they miss it?
A written contract with a firm start date makes your case simpler. Even without one, Ontario law implies that a contractor must perform within a reasonable time once paid — silence in the contract doesn't mean the contractor can sit on your money indefinitely.
Step 2: Send a Clear, Written Demand
Put your demand in writing — email is fine, but a formal demand letter (from you or a lawyer) carries more weight. It should include:
- The date you signed the contract and paid the deposit
- The amount paid and how (cheque, e-transfer, cash)
- What was promised and by when
- A firm, reasonable deadline to either start the work or refund the deposit in full
- A statement that you will pursue legal action if the deadline passes
Send it by a method that gives you proof of delivery, and keep a copy. Many contractors refund a deposit once a demand letter makes clear that the homeowner is serious and organized.
Step 3: Gather Your Evidence
Before escalating, pull together everything that documents the deal and the breach:
- [ ] The signed contract or written quote
- [ ] Proof of payment (e-transfer confirmation, cancelled cheque, receipt)
- [ ] All text messages, emails, and call logs about scheduling
- [ ] Photos showing no work or materials on site (if relevant)
- [ ] Your demand letter and any response
This record is what turns "he said, she said" into a case you can actually prove in court.
Step 4: Decide Where to Sue
If the contractor doesn't refund the deposit, your next step is usually a civil claim for breach of contract. Ontario runs civil money claims on different tracks depending on the amount involved — Small Claims Court, Simplified Procedure, or the ordinary Superior Court process. For most residential deposit disputes, the amount in question keeps the case within Small Claims Court's jurisdiction, which is designed to let people represent themselves without a lawyer.
Before filing, it's worth confirming the current Small Claims Court monetary limit, since that threshold is set by regulation and adjusted periodically. If the deposit was unusually large, a lawyer can help you confirm which court applies.
Step 5: File and Follow Through
Once you file a claim, the contractor is served and given time to respond. If they don't respond at all, you can typically move for a default judgment without needing a trial. If they file a defence — for example, claiming they ordered materials or that you cancelled first — the matter usually proceeds toward a mandatory settlement conference before any trial date.
Getting a judgment isn't automatically the same as getting paid. If the contractor still won't pay voluntarily, Ontario law provides enforcement tools such as garnishment of a bank account or wages, and a writ of seizure and sale against property or other assets — though you generally have to take active steps to use them; the court doesn't collect the money for you.
When a Lien Might Also Apply
If the contractor supplied any materials or started any preliminary work on your property before disappearing, a construction lien dispute could technically be in play — though liens are usually a tool for unpaid contractors and suppliers, not homeowners chasing a refund. If your project involved a signed construction contract with holdback provisions, or the contractor is now claiming they're owed money too, it's worth having a lawyer review the file, since construction disputes carry strict, short deadlines that don't wait for you to sort things out informally.
Frequently asked questions
Can the contractor keep my deposit if they say they already bought materials?
Only if they can actually show materials were purchased specifically for your job and the contract allowed for that. A vague claim of "costs incurred" without proof usually isn't enough to justify keeping the full deposit.
What if I paid cash and have no receipt?
It's harder, but not impossible. E-transfer records, text messages confirming the amount, or even a witness to the payment can help establish the deposit was made. This is why written contracts and traceable payment methods matter so much going forward.
Is it worth reporting the contractor anywhere besides court?
You can report certain conduct to consumer protection authorities or trade licensing bodies where applicable, but that generally won't get your money back directly — a civil claim is usually still needed to recover the deposit itself.
How long do I have to sue?
Ontario's general limitation period for starting a civil claim is set by the Limitations Act, 2002 and runs from when you discovered — or reasonably should have discovered — the problem, not necessarily the date you paid. Don't assume you have unlimited time; get advice promptly once it's clear the contractor isn't going to perform.
This is a litigation question
Start a file online — flat, published fees, reviewed by a licensed Ontario lawyer before a dollar is owed.