Construction contracts in BC: how a build is priced, paid for and changed.

Fixed price or cost plus, in short

The first decision is the price basis, and the fixed price or cost plus chapter of our custom home guide covers it in full. In short, a fixed price contract sets one number for a defined scope, and the builder carries the cost if the work costs more than it priced. A cost plus contract pays the actual cost of the work plus a fee, so the homeowner carries any overrun and sees every invoice in return.

This guide covers what comes after that choice. Two contracts of the same type can protect a homeowner in different ways, depending on how the fee is set, how payments are checked, how changes are priced, who insures the work and how disputes end. Those terms are the subject of the six chapters.

We write it for homeowners and landowners in Metro Vancouver: someone signing for a renovation of a Vancouver character house, a new custom home in Burnaby, or a duplex or fourplex on their own lot in Surrey or Coquitlam. The statute sections apply across British Columbia.

Six questions a contract has to answer

How is the builder's fee set? Under cost plus, the fee is a percentage of cost or a fixed amount, and the definition of cost of the work needs as much attention as the fee. The cost plus fees chapter covers fee methods, guaranteed maximum price and open book records.

Which form is it on? The Canadian Construction Documents Committee publishes the national standard forms: CCDC 2 for a fixed price, CCDC 3 for cost plus, and CCDC 5A and 5B for construction management. The standard contract forms chapter covers them and lists the clauses to check in any contract.

How does the money move? Deposits, progress payments and the holdback all run under the Builders Lien Act. The payments and holdbacks chapter covers holdback accounts, the completion test, lien deadlines and what home warranty covers before occupancy.

What moves the price? Change orders, allowances, provisional amounts, contingency and delay. The changes and allowances chapter covers how each should be written.

Who insures the work and who runs safety? The insurance and site safety chapter covers builder's risk and liability insurance, your own home policy, and the WorkSafeBC prime contractor and clearance rules.

What happens when it goes wrong? The disputes and ending chapter covers mediation, arbitration, the tribunal and court limits, liens in a dispute, and ending the contract.

The money rules BC law sets for every contract

Some contract terms are set by statute, whatever the parties write. The Builders Lien Act gives a lien to contractors, subcontractors and workers who improve land, and the Act contains no exemption for an owner's own home. Section 4 requires the person primarily liable on the contract to hold back 10% of the greater of the value of work provided and the payments made. Section 5 requires a joint holdback account for contracts of $100,000 or more (as of 24 October 2026). Section 42 (2) makes void any agreement that the Act will not apply.

The Act's dates run from completion, which it defines in numbers. A contract counts as complete when the work left can be finished or fixed for no more than 3% of the first $500,000 of the price, 2% of the next $500,000 and 1% of the rest (section 1 (2), as of 24 October 2026). Liens must be filed within 45 days of completion, abandonment or termination (section 20), and the holdback is kept for 55 days from the same point (section 8). Section 34 caps what lien holders under one contractor can recover at the greater of the amount the owner still owes and the required holdback.

More rules are coming. BC's Construction Prompt Payment Act received Royal Assent on 27 November 2025 and, according to the province's page last updated 20 August 2026, is not yet in force. Once it is, it will set payment deadlines, including 28 days for an owner to pay a proper invoice in full, and an adjudication process for payment disputes.

How the price moves after signing

A renovation price is fixed only for the work described in the contract documents. Under a fixed price contract, owner changes, allowance overruns and conditions the contract excludes are added through change orders. Under cost plus, the price is the actual cost of whatever is built, plus the fee.

The protection is in the paperwork. Each change should be priced and signed before the work starts, with its effect on the schedule written down. Each allowance should state what it covers, the selection deadline and how the difference is settled. A contingency should be named as the owner's or the builder's, with a rule for who approves spending it. Delay clauses should list the events that extend the completion date and say whether liquidated damages apply.

Insurance and safety on a homeowner's site

Every contract should name two policies: insurance on the work while it is built, called builder's risk or course of construction insurance, and liability insurance. CCDC 41, the CCDC's insurance requirements document, asks for general liability of at least $10,000,000 per occurrence and property insurance of at least 1.1 times the contract price (figures as of its 14 December 2020 publication). Tell your own home insurer before the work starts.

WorkSafeBC rules reach the homeowner too. Under section 13 of the Workers Compensation Act, the owner is the prime contractor, the party responsible for coordinating safety on a site with more than one employer, unless a written agreement names someone else. WorkSafeBC says a homeowner can be held liable for the unpaid premiums of a contractor that is not registered and paying, and recommends a clearance letter for each contractor.

When a dispute starts

Disputes go where the contract and the amount send them. A contract can require mediation, arbitration or both. Without arbitration, the Civil Resolution Tribunal hears most small claims up to $5,000, Provincial Court small claims hears $5,001 to $35,000, and larger claims go to the Supreme Court (limits as of 24 October 2026). A builders lien is enforced in the Supreme Court whatever its size. Under section 6 of the Limitation Act, most court claims must start within 2 years of discovery.

When to bring in a lawyer

This guide explains how contracts and BC statutes work in general terms. Venture Pacific is a developer, and nothing here is legal advice about your contract. Have a lawyer who practises construction law review a contract before signing when the price is large for your finances, the form is the builder's own or an amended standard form, there is an arbitration clause, a lender is involved, or the building will be sold or rented. Get advice again before ending a contract or answering a lien.