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The following points are really important when choosing a General Contractor “GC”. This is what I look for when I am underwriting for a client that is hiring a GC to build the project.


  • Licensed with Tarion; if the GC is licensed with Tarion to build houses in Ontario then I know that the builder has passed Tarion exams with respect to the building code.
  • Licensed Carpenter or Trade; if the GC is licensed in any of the trades then most likely they will have experience and general knowledge about construction.
  • Liability Insurance; I ask the GC to provide proof of liability insurance. Liability insurance protects the GC and client in case anyone gets hurt on the job site.
  • References; I will ask for a resume from the builder and the lender will probably want to talk to the GC directly to get a sense of experience. If I can check out the references or see projects they have worked on before, then that’s very helpful.
  • Contract with Client; we look at the contract between the GC and the homeowner. If the GC is looking for a large deposit up front, that’s a red flag. If no one has picked up tools or stepped foot on the job site then why should the client pay a deposit? It needs to make sense to the lender. Its not to say that this is not OK but it needs to be explained.
  • Hard Cost Budget; We have a general idea of what it should cost to build per square foot. Which can fluctuate depending on the size of the project. If the price per square foot is very high then that is a red flag. I will analyze the budget to understand why the budget is so high. The most expensive item in the budget is always, without exception, labour.
  • Who is paying the trades? If the GC is paying the trades and the client has a fixed price contract with the GC, then its very important that the construction draws are part of the contract. The lender will need to approve the agreed upon construction draws.
  • How much is the GC fee? There is a standard industry wide fee that most GC’s charge. I like to see the fee broken out in the contract between GC and client.
  • Schedule for the Project; how long it will take, when will certain items be in place and completed satisfactory, overall scope of work to be completed.

These are the most important considerations. If you choose a GC and don’t carefully check out all of the above then you’re putting yourself and the project at risk. Before I get into trouble with any GC out there reading this, I must also say A GC does not have to be licensed to be extremely knowledgeable and experienced, but they must be able to prove it to the Lender