Prepaid Contracting Licence

Definition

A prepaid contracting business:

  • Solicits, negotiates or concludes prepaid contracts in person at any place other than the sellers’ place of business, and

  • Accepts money before all the work is done and /or the services are provided

Prepaid contracts are for construction, maintenance, repairing, altering, adding to or improving private dwellings, or real property used in conjunction with a private dwelling i.e. landscaping services.

Exemptions

  • Contracts for business or commercial buildings

  • Contracts between contractors, sub contractors and sub trades

  • Home construction contracts covered by the Alberta New Home Warranty Program or the National Home Warranty Programs

  • Contracts for drilling or maintaining water wells covered by the Water (Ministerial) Regulation, where the contractor holds a Class A, B or D approval for water wells 

Licensing Requirements

Note: Failure to provide complete information will delay processing of your application and may result in a refund of your fees and closure of your file.

To get a licence as a prepaid contractor, you must provide the following:

  • Completed application (pdf) form

  • Security in the required amount. *  You may get this security in one of two ways:

    • General Surety Bond (pdf)

    • Cash Security Agreement (pdf) accompanied by:

      • An Irrevocable Letter of Credit (pdf), or

      • Cash (including payment by bank draft, money order, certified cheque – all of these are payable to the Minister of Finance), or

      • A term deposit or other similar instrument in the name of the Minister of Finance, c/o Service Alberta, 3rd Floor, 10155 – 102 Street, Edmonton, Alberta, T5J 4L4, in trust for (name of licensee)
*Note:  In accordance with the Security agreement, the security provided will be held for two (2) years after the agreement expires or for two years and three months (27 months) from the date the business license expires or the business closes or longer in the event of a claim being received.

The amount of security depends on the price and type of goods or services provided.  Please contact one of the licensing offices to find out how much security you need to provide.  When setting the security amount, the Director can consider the following:  the department’s previous history with the business and its partners or directors, the business’s financial history, and criminal convictions.

  • A licensing fee of $60 (Note: Your cheque should be made payable to the Minister of Finance.  If you are applying in person, you can also pay this fee using Visa, MasterCard, Debit or cash.  This fee is for a one-year licence.  Licences take effect the date they are issued.  The department will send you a notice and the appropriate form(s) before your licence needs to be renewed.  Licence holders must notify Service Alberta in writing if their business licence address changes.)

  • A copy of the sales contract/invoice with a copy of “Buyer’s Right to Cancel” schedule attached (if applicable, copies of any other marketing materials)

General Information

  • All records, files, books, papers and other related documents must be maintained for 3 years after creation

  • A business must have a licence and must produce it when asked to by a police officer, a person it approaches to make a direct sale or an officer of Service Alberta, Consumer Services Division

  • The business must provide an identification card (pdf) for persons selling on its behalf (the identification card must have the person’s name, business name and address, license number, and must be signed by the business’ signing authority)

Contract Requirements (pdf)

Written sales contracts will be required.  The contracts must include the following information:

  • The buyer’s name and address

  • The seller’s name, business address, telephone number and where applicable, fax number

  • The salesperson’s name where applicable

  • The date, and the place where the sales contract is concluded

  • Description of the goods or services sufficient to identify them

  • A statement of cancellation rights (pdf) that conforms with the requirements set out in the regulations and must:

    • Contain the words set out in either of the options shown in the Schedule

    • Show the heading in not less than 12 point bold type

    • Show the statement of 10-day cancellation rights in not less than 12 point type, and (d) show the remainder of the information in not less than 10-point type (Note: Where this notice is not printed directly on the face of the sales contract there is to be a notice printed directly on the face of the contract in not less than 12 points bold type, indicating where in the contract the statement is printed.)
  • The itemized prices of the goods or services or both

  • The total amount of the sales contract

  • The terms of payment

  • In the case of sales contracts for future delivery of goods, future provision of services or goods together with services, the delivery date for the goods, or commencement date for the services, or both

  • In the case of a sales contract for the future provision of services or goods together with services, the completion date for providing the services or the goods together with the services

  • Where credit is extended, a statement of any security taken for payment, and the disclosure statement required under the Fair Trading Act

  • Where goods are taken in trade, a description of and the value of the trade-in

  • The signatures of buyer and seller

Legislation

Fair Trading Act

Prepaid Contracting Business Licensing Regulation

Direct Sales Cancellation and Exemption Regulation


Copies of legislation can be obtained from the Queen’s Printer Bookstore at: 

Park Plaza, 5 floor
10611-98 Avenue
Edmonton, Alberta  T5K 2P7
Telephone: 780-427-4952

To call a Government of Alberta office toll free (in Alberta), dial 310-0000 and follow the instructions.