The basement renovation company went out of business mid-project - what do we do?

If your basement renovation contractor has gone out of business mid-project, you need to act quickly to protect yourself legally and financially while figuring out how to complete the work. This is unfortunately more common than homeowners realize, and there are specific steps you should take immediately.

First, document everything thoroughly. Take photos of the current state of work, gather all contracts, invoices, receipts, and correspondence with the contractor. Contact your bank or credit card company immediately if you made payments - you may be able to dispute recent charges or stop pending payments. If you paid by credit card, you often have better protection than cash or debit payments.

Check what insurance protections you might have. If the contractor was WSIB-insured (which is mandatory in Ontario), contact WSIB to understand your options. Review your home insurance policy - some policies have coverage for contractor default or incomplete work, though this varies significantly. If the contractor was bonded, contact the bonding company immediately as there are often strict time limits for claims.

For the legal and permit situation, contact the City of Ottawa Building Code Services at 613-580-2424 to discuss your active permits. The permits are tied to your property, not the contractor, so the work can continue with a new contractor. However, you'll need to ensure any completed work meets code before proceeding - this may require additional inspections. If there are code violations or unsafe conditions, address these immediately for safety reasons.

Finding a new contractor to complete the work requires careful vetting, especially given your situation. Look for contractors with strong local reputations, proper licensing, and WSIB coverage. Be upfront about the situation - experienced contractors have dealt with this before and can assess what work needs to be redone versus what can be completed. Get multiple quotes specifically for completion work, as this often costs more than starting fresh due to the need to assess and potentially redo existing work.

Financially, this situation can be challenging. You may be able to pursue the original contractor through small claims court (up to $35,000 in Ontario) or Superior Court for larger amounts, but collection can be difficult if they've truly gone out of business. Keep all documentation for potential tax deductions on losses and for insurance claims.

For immediate safety concerns, if electrical work was left incomplete, have it inspected by a licensed electrician immediately. Exposed wiring, incomplete plumbing, or structural work left half-done can create serious safety hazards. Don't ignore these even if it means additional unexpected costs.

The key is acting quickly while the trail is still warm and protecting yourself from further financial exposure. If you're dealing with this situation in Ottawa, we'd be happy to provide a free assessment of what work needs to be completed and help you understand your options for moving forward safely and within code requirements.