Home renovations are one of the most common ways of increasing the value of a home. And most people are careful to choose a reliable contractor.

But as one Toronto woman learned, it’s important to not pay a contractor too much money up front.

Ann Marie Charles said she paid a contractor more than $23,000 to finish her basement so that she could rent it out for extra income, but there was a problem with the permits for the project. After several months, she said the contractor left without refunding any of the money even though little work had been done.

“It was not savings. It was out of my line of credit,” Charles said. “So now I’m out of my money, I have interest to pay on that money, and I have no money coming in from my basement.”

Charles said she later found out the permits for the project were never issue and the contractor isn’t returning her calls.

“This is unfair and it should not be allowed to happen,” she said.

To avoid this kind of situation, the best option is to set up a payment schedule with your contractor so that they get a certain amount of money once each step of the project is complete.

This way, if a renovation project is cut off part way through, the consumer has not paid for work that hasn’t been done yet.

The contractor eventually agreed to return more than half of the money.

Charles says she can now hire another contractor to finish her basement.

“I’m very happy with how happy things transpired,” she said.

With a Consumer Alert from CTV Toronto’s Pat Foran