Hiring Contractors for Your Condo Corporation: What Ontario Boards Need to Know

Why Contractor Hiring Is a Governance Issue, Not Just a Practical One

Condo boards in Ontario are not just customers hiring a handyman. As directors of a corporation, board members carry a fiduciary duty to the unit owners they represent. Every spending decision, especially larger ones involving contractors, must be made with care, diligence, and transparency.

This is not legal advice, but generally speaking under Ontario law, the Condominium Act, 1998 requires that board members act honestly and in good faith, exercising the care and diligence expected of a reasonably prudent person. Rubber-stamping a quote from a familiar vendor without a competitive process can leave individual directors exposed, and the corporation without recourse if the work falls short.

That standard applies whether the board is hiring a snow removal service for $8,000 a season or a concrete contractor for a $400,000 parking structure repair. The scale changes; the duty does not.

When Does Your Corporation Need a Formal Tender or RFP?

Not every job requires a formal request for proposals (RFP), but most bylaws and governance best practices suggest that spending above a certain threshold should trigger a competitive bidding process. Many declarations and bylaws set this threshold between $10,000 and $15,000, though your specific documents will govern.

For smaller recurring work, such as gutter cleaning or window washing, a standing service agreement with a vetted vendor is often acceptable. For capital work drawn from the reserve fund, a competitive process is not only wise, it signals to owners that their money is being managed responsibly.

A well-structured tender package typically includes:

•      A clear scope of work, including materials, standards, and exclusions

•      Required insurance minimums and a valid WSIB clearance certificate

•      A timeline for completion, with any provisions for delays

•      Instructions for submitting sealed bids by a firm deadline

•      Documented evaluation criteria, so the board is not simply choosing the cheapest quote

London Ontario boards working with Sapphire have found that a documented evaluation process also protects directors if an owner later questions why a particular vendor was selected. Paper trails matter.

For more on governance mistakes that cost boards money and credibility, read our guide: Top 5 Mistakes Condo Boards Make (From a Condominium Management Expert)

What to Verify Before Signing Any Contractor Agreement

Before awarding work, a board should confirm several things beyond the quote amount itself. Skipping this step is one of the most common and costly errors Ontario condo boards make.

Insurance

The contractor should carry general liability insurance, with $2 million being a common minimum and $5 million appropriate for larger capital projects. The corporation should be named as an additional insured, and the board should request a current certificate, not just verbal confirmation that coverage exists.

WSIB Clearance

In Ontario, a WSIB clearance certificate confirms the contractor is in good standing with the Workplace Safety and Insurance Board. Without this, the corporation could face liability if a worker is injured on site and premiums are unpaid.

Licensing

Several trades in Ontario require specific licences. Electricians, plumbers, gas fitters, and elevator mechanics are all regulated. Verifying licensing takes a few minutes and matters enormously if something goes wrong or an inspection is triggered.

References

Ask for two or three recent references from comparable projects, ideally other condo corporations or commercial properties. A residential renovation contractor may not have the experience or insurance structure suited to work in an occupied multi-residential building.

Scope Clarity

Vague scopes create disputes. Before signing, confirm that the agreement specifies what is included, what is excluded, how change orders are handled, and what the payment schedule looks like.

Managing the Contractor Once Work Begins

Awarding the contract is not the finish line. Boards and their property managers have a responsibility to monitor work as it progresses, not just inspect it once complete.

Designate a single point of contact. Whether it is the property manager or a specific board director, all contractor communication should flow through one person. This prevents conflicting instructions and creates a clear record if a dispute arises.

Track milestones and holdbacks. For larger projects, payments should be tied to progress milestones rather than paid in full upfront. This is not legal advice, but generally speaking under Ontario law, the Construction Act requires a statutory holdback of 10 percent from each payment, retained until the lien period expires. Releasing holdbacks early is a common and costly mistake that can leave a corporation exposed to lien claims from unpaid subcontractors.

Document everything. Photographs, site inspection notes, and written records of all change orders protect the corporation and give the board the standing to push back on substandard work.

At Sapphire, we find that boards who treat contractor management as an ongoing process rather than a one-time transaction consistently get better results, from better pricing on contract renewals to better workmanship during the job itself.

Understanding how contractor costs fit into your long-term financial plan starts with a solid reserve fund study. For more, read: Reserve Fund Studies in Ontario Condo Boards

When Contractor Costs Exceed the Budget

Sometimes a project comes in over budget. Unexpected site conditions, scope changes, or a reserve fund that was not adequately funded can push a corporation toward a difficult choice. Knowing when this is likely, and communicating early with owners, is always better than waiting until a crisis forces the conversation.

If your corporation is facing a shortfall that may require a special levy, our guide on What is a Special Assessment? walks through the legal requirements and how to communicate the situation clearly to owners.

Boards should also be clear on the difference between operating fund expenses, which are routine costs covered by the annual budget, and capital expenditures drawn from the reserve fund. Misclassifying a large project can distort financial reporting and generate difficult questions at the next AGM. In London and Sarnia, this distinction comes up often when aging building systems require unplanned repairs.

Frequently Asked Questions

Do Ontario condo corporations have to get multiple quotes for contractors?

Most bylaws and governance best practices require competitive bids above a dollar threshold, commonly between $10,000 and $15,000. Check your declaration and bylaws for the specific rules that apply to your corporation. Even below that threshold, obtaining two or three quotes is sound practice that protects the board from later criticism by owners.

What insurance should a contractor have to work on our condo property in Ontario?

At minimum, contractors should carry general liability insurance, often $2 million to $5 million depending on project size, and provide a valid WSIB clearance certificate. For most projects, the condo corporation should be named as an additional insured on the policy. Always request current certificates before work begins.

What is the construction holdback in Ontario and does it apply to condo corporations?

This is not legal advice, but generally speaking under Ontario law, the Construction Act requires a statutory holdback of 10 percent from each payment to a contractor, retained until the lien period expires (generally 45 days after substantial completion). This protects the corporation from lien claims by subcontractors or suppliers who may not have been paid by the general contractor. Releasing holdbacks early is a common and costly mistake for condo corporations across Ontario.

Related Reading

→ Top 5 Mistakes Condo Boards Make (From a Condominium Management Expert)

→ Reserve Fund Studies in Ontario Condo Boards

→ What is a Special Assessment?