Deposits on Alberta renovations: when a contractor needs a prepaid contracting licence

The single most common renovation loss is a deposit paid to a contractor who never comes back. Alberta tackles this with a licence: contractors who take money before the work is done must be licensed and post security with the province.

Who needs the licence

Service Alberta says a business that requests an upfront payment before work starts, or payments before a renovation is completed, is a prepaid contracting business and must be licensed and post security with the province. The rules cover contracts solicited, negotiated or concluded in person somewhere other than the seller's place of business, such as your home.

Check the licence before paying

Use the province's online search tool to check that the business is licensed before you sign or pay a deposit. Recent consumer alerts describe charges against unlicensed prepaid contractors who took deposits without finishing work or refunding customers.

What the contract must include

Prepaid contracts of $200 or more must be in writing and include specified information, such as the names and addresses of both parties, the date and place, and a detailed description of the materials and work. You must receive a copy on or before the day work begins, or within 10 days after you sign, whichever comes first.

Your right to cancel

If the contract was solicited, agreed or signed at your home or elsewhere away from the contractor's business, you can cancel up to 10 days after receiving your copy. The cancellation period can extend to one year from signing in some cases, for example if the contractor was not licensed when you signed.

Exemptions

Some contracts are exempt from the licensing requirement, such as building or renovating a home covered by a new home warranty program with the required deposit protection. Cancellation and disclosure rights can still apply. Ask whether a deposit is refundable and under what conditions, and get the answer in the contract.

Prevention Checklist

• Check the contractor's prepaid contracting licence with the province before paying.
• Keep the deposit as small as you can and tie later payments to finished stages.
• Make sure the contract is written and includes the required details.
• Note the date you received your copy: the 10-day cancellation period starts then.
• If the contractor was unlicensed, you may be able to cancel for up to a year.

References

1. Government of Alberta (Open Government). Prepaid contracting: Consumer Protection Act, Web page, Licensing, security, contract content, cancellation. Accessed 2026-11-01.
2. Government of Alberta (Open Government). Home Improvements: what you need to know, Web page, Deposits, written contracts, cancellation. Accessed 2026-11-01.
3. Government of Alberta. Active consumer alerts, Web page, Charges against unlicensed prepaid contractors. Accessed 2026-11-01.

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