Certain homeowners might not bat at the sight of contractors who ask for large deposits.
However, it can be a tricky situation to navigate when things go wrong like in the case of an owner of the Novena penthouse, who paid the deposit of over $152,000 to make improvements to his home but only to be abandoned in a ruined state since July.
The contractor for the Renosaves Project is nowhere to be found. He had said he would install the feature wall with marble and chandelier in addition to other features but left the 3,000 sq ft unit in a state of chaos and a mess of construction materials piled into the rooms and wires dangling from the walls.
More than 10 home owners who participated in Renosaves Project, and were similarly left in the lurch and have reached out to The Straits Times since the publication in November.
Since 2022, they’ve suffered losses ranging between $20,000 and $30,000 and many have filed police reports or claims in the Small Claims Tribunals.
According to the Consumers Association of Singapore, (Case) contractors were consistently in the top three industries for complaints from consumers between 2021 and 2023.
Here are some suggestions on how to remain vigilant when you are looking for a contractor to renovate your home:
1. Employ accredited contractors
CaseTrust accredited renovation contractors are the most reputable choice for those who want to remodel their homes.
CaseTrust-accredited renovation companies are required to sign the CaseTrust Standard Renovation Contract, which clearly outlines payment and work schedules as well as warranty for service, and offers transparent pricing.
Contractors that are CaseTrust-accredited have to limit their initial deposits at 20% of the total cost, and payment is made in stages based on milestones agreed upon.
The deposit is secured by an insurance policy that safeguards the deposit in the event of business closure prior to the completion.
Consumers should engage renovation companies that are also listed in the Housing Board’s Directory of Renovation Contractors or the Building and Construction Authority’s directory as these companies have a good record and are verified.
A well-established business will regularly maintain and update these certifications to show its credibility and abilities.
If your project involves a renovation of a condo, I recommend using a licensed contractor through the HDB.
The RCMA is a screening body that accepts only a small percentage of renovation companies as members.
2. Learn more about the company
An Accounting and Corporate Regulatory Authority report can provide information about a business including its capital expenditures, capital and the names of its shareholders and officers. It will cost $5.50 to purchase a business profile.
The capital that is paid up is a good indicator of a company’s health. In the case of Renosaves Project, it has a paid-up capital of $20,000.
If the owner of the company invested only $20,000 in setting up the company How can it complete projects that are worth more than $200,000 worth of value?
HDB requires private limited companies to have at least $50,000 in capital that is paid up to be included in its Directory of Renovation Contractors.
Always check the company website as well as reviews on social media.
The website of a reliable company will list the designers employees, their past performances and the portfolio of its company.
3. Examine companies and look out for red flags
Consumers to consult at least three renovation companies, visit their showrooms and then compare their prices.
If the offer seems too good to be true, then it most likely is.
To safeguard their rights Consumers should insist on having an agreed-upon contract in writing that defines the payment terms and includes a schedule of renovations.
A contractor who demands payments that are not listed in the contract should be viewed as a red flag.
Some contractors may ask for quicker payments and attribute the issue to cash flow problems However, the company’s cash flow does not have anything to do with the client.
4. What should you do when you have an unreliable contractor
Consumers should inform the police and Case.
A Case officer will reach out to the customer to request additional documents once Case receives the complaint.
Case can represent a consumer during negotiations if the issue is within its scope.
If the issue cannot be solved at this point, Case will advise the customer on the best recourse, which can include filing a claim with the Small Claims Tribunals or seeking the advice of a lawyer.
Small Claims Tribunals will accept claims up to $20,000 or $30,000 with both parties’ consent. If the claim is larger the consumer will have to file a civil lawsuit.
Case can also refer errant retailers – such as renovation contractors who continue to engage in pursuing unfair trade practices to the Competition and Consumer Commission of Singapore (CCCS) to investigate.
According to the CCCS’s website, it is able to submit an injunction request to the court against retailers who persistantly violate its terms.
If they fail to comply with the injunction order, CCCS can take them to the court to be found in contempt of the court. If convicted, the offender could face a fine of up to $10,000 or imprisoned for upto one year, or both.
While CCCS does not take any contractors on their work in renovation They remain vigilant in monitoring the market.
CCCS’ focus is on the identification and elimination of unfair practices in the marketplace that are particularly egregious, such as instances where there are a number of instances against a single contractor who continues to engage in unfair practices, despite the intervention of Case.
CCCS will examine the reasonableness and the extent of harm done to consumers in order to decide whether or not to investigate the case with a view to getting an order from a court stopping the contractor from pursuing the unjust trade practices.