ST Offers Insights: What to Pay Attention to When Dealing with Renovation Contractors
Some homeowners may not blink at the sight of contractors who require large sums of money.
However, it can be an arduous task when things go awry like when it was the case with a resident of a Novena penthouse who made the deposit of over $152,000 to remodel his house but only to be left in a wrecked 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 more than three thousand square feet unit messy that included construction materials dumped up in the rooms and wires hanging off the walls.
In the months since November’s report, more than 10 homeowners who were involved in the Renosaves Project and were left similarly in the dark have been in touch with The Straits Times.
Since 2022, they have been able to claim losses that range from $20,000 and $30,000 and many have filed police reports or claims at the Small Claims Tribunals.
Contractors are consistently in the top three industries with complaints from 2021 through 2023, as per the Consumers Association of Singapore (Case).
Here are some tips to help you stay alert in your search for a contractor.
- Engage accredited contractors
CaseTrust accredited renovation contractors are the best option for homeowners who are planning to renovate their homes.
CaseTrust certified renovation companies must adopt the CaseTrust Standard Renovation Contract. The contract clearly defines payments schedules, warranties for service and work schedules. The contract also offers clear pricing.
Contractors who are CaseTrust accredited must limit the initial deposit up to a maximum of 20% of the total costs. The payments are made in stages based on milestones agreed upon.
They also have to purchase the deposit performance bond which protects deposit accounts from company closure prior to the time when the renovation is finished.
The Housing Board Directory of Renovation Contractors and the Building and Construction Authority Directory are both excellent sources for information and advice for the consumer. These firms are highly reviewed and have a proven track record.
To demonstrate their credibility and capabilities An established business will frequently update and maintain its certifications.
Even if your project is to renovate a condominium I still recommend employing a licensed contractor from the HDB.
They can also check whether the business is a member of the RCMA, which screens accredited renovators and limits the number of members to about 10 per cent of registered renovation firms.
- Find out more about the company.
A search through the Accounting and Corporate Regulatory Authority can provide information about a business, including the equity that it has paid up and the names of its investors and officers. It costs $5.50 to purchase a business profile.
The capital that is paid up is a good gauge of the company’s health. In Renosaves Project’s case, it has a capital paid-up of $20,000.
If the business owner invested only $20,000 in setting up the company what would it take to complete projects that are worth more than $200,000 in value?
HDB requires private limited companies to have at minimum $50,000 of capital that is paid up to be included in its Directory of Renovation Contractors.
Customers should always verify the company’s website and reviews on social media sites.
On its website, a reliable firm will showcase the designers, staff, past performance as well as the portfolio of their company.
- Compare companies and look out for red flags
Take a look at three estimates from remodeling companies. Visit their showrooms.
If the offer seems too good to be true, then it most likely is.
Consumers should insist on a formal contract stating the agreed payment terms – and a renovation schedule to safeguard their rights.
A contractor who asks for payments that are not listed in the contract must be viewed as a red flag.
Certain contractors might request faster payments and attribute it to cash flow issues, but the cash flow of a business has nothing to do with the client.
- What should you do when you’re dealing with a contractor who isn’t reliable
Consumers should report the incident to the police and Case.
A Case officer will call the customer to request additional documents after Case is notified of the complaint.
If the matter falls within its scope, Case can represent the consumer in negotiations with the retailer.
Case will provide the customer with choices if the problem isn’t solved. This might be as simple as filing a claim to the Small Claims Tribunals, or seeking their own legal advice.
Small Claims Tribunals will consider claims up to $20,000 and $30,000 with the agreement of both parties. They must make a civil claim for higher sums.
Cases can also refer unruly retailers – including renovation contractors who persist in pursuing unfair trade practices to the Competition and Consumer Commission of Singapore (CCCS) for investigation.
CCCS can file injunction applications in the courts against persistent retailers who are errant, according its website.
If they do not adhere to the injunction orders, CCCS can take them to court for contempt of the court. If found guilty, the defendant could face a fine of up to $10,000 or jailed for up to one year or both.
Although CCCS has not brought any contractor for renovations to account, it remains alert in observing the practices of the market.
CCCS focuses on identifying and addressing particularly egregious unfair trade practices like situations in which there are multiple cases against a contractor who persists in unfair practices despite the intervention of Case.
CCCS will evaluate the responsability of the contractors’ actions and the extent of harm to consumers before deciding whether or not to investigate these cases in the hope of obtaining orders from the court to stop the contractor from continuing to engage in the unfair trade practice.