Canadian homeowners may be spending money unwisely on home renovations by shady contractors.

The warning comes from contractors’ review platform TrustedPros which anonymously asked professionals whether homeowners ask to check their credentials.

Only 5% said they were always asked, while 60% said only between 0 and 5% of customers carried out due diligence on them.

With many homeowners using HELOCs and refinancing to fund renovations costing thousands of dollars, the report highlights a significant risk for homeowners, and their lenders.

The key areas that homeowners are failing to check are trade and business licenses, liability insurance, and workers’ compensation insurance.

Too many homeowners do not understand industry regulations or may be misinformed by unscrupulous operators.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

More market watch: