How To Avoid A Renovation Scam and Bad Renovation Contractors

We’ve all heard of renovation scams and renovation horror stories, so how do you prevent them from happening to your own home renovation? Here are some proactive ways to avoid bad renovation contractors and interior designers.

According to the Consumers Association of Singapore (Case), complaints against renovation contractors rose by nearly 50% from a year before, increasing from 869 complaints in 2020 to nearly 1,300 in 2021. Most of the complaints were about unsatisfactory workmanship or contractors failing to complete projects on schedule.

One such case was this Singapore family’s 5-month renovation nightmare — their kitchen renovation was dragged from six weeks to five months after their contractor, 99 Reno, had gone rogue after collecting 90%, or S$19,000, of the total payment. 

The family was among the 30 other customers left in similar situations by 99 Reno. According to Case, these customers had made advanced and installment payments but the contractor never showed up or did not complete the job.  

While renovation horror stories aren’t new, the last thing you want is further setbacks from working with bad interior design/renovation firms, especially now that renovation projects are already delayed or affected due to manpower shortages and global supply chain disruptions caused by COVID-19. Plus, you don't want the renovation loan or personal loan you took from the bank to go to waste.

With that, below are some ways on how you can avoid working with a bad interior design or renovation firm, and how to screen the contractor.

Interior design/renovation firms that you should avoid 

Case has a list of renovation/interior design firms on their alert list, so do your due diligence if you’re still planning to engage their services. 

There’s also a “blacklist” of renovation contractors and interior designers shared by the community on Renotalk’s forum. However, do keep in mind that this is an unofficial list and serves only as a general guide; you should still do your own research about the company’s background. 

How to avoid bad renovation contractors

When it comes to working with renovation contractors, it’s important that the company is a licensed company and is registered among HDB’s directory of licensed renovation contractors. 

While there’s no guarantee that their work will be 100% satisfactory, at the very least, these contractors are required to abide by the credentials set by the relevant authorities. 

Case recommends the following steps before and during your renovation:

- Compare quotations from different contractors and do thorough research on the credibility and track record before signing the contract. Also insist on a written contract, preferably Case’s model agreement on home renovation 

- Never make huge upfront payments. Instead, negotiate for a low deposit and make progressive payments based on major progress points of a project. Typically, you pay 10% upon confirmation, 80% in progressive payments based on each stage of the renovation completion, and the remaining 10% is paid upon satisfactory completion of all works and rectification of issues. This helps to prevent your contractor from scooting halfway and leaving your project hanging 

- Document outstanding defects by taking photos and evidence that you’ve communicated the defects to your contractor. These photos will be handy as supporting evidence in the event of disputes

- Work with CaseTrust accredited renovation contractors. CaseTrust contractors are required to protect a customer’s deposit through the purchase of a deposit performance bond, which safeguards deposits against closure, winding up, or liquidation.

Accredited contractors are also required to adopt CaseTrust Standard Renovation Contract, which protects consumers’ interest, while also ensuring cost transparency and accountability for project deliverables. You can check whether a contractor is CaseTrust accredited here. 

- HDB flat owners are also advised to engage a contractor from HDB’s directory of renovation contractors (DRC). Only contractors listed in the DRC are allowed to carry out renovation works in HDB flats and advertise/promote their renovation services for HDB flats. On top of that, they must also fulfill several stringent criteria to be listed in the DRC. 

However, keep in mind that while only contractors under the DRC are allowed to do certain works such as hacking, HDB “does not endorse nor guarantee the quality of their work”. The reason being is that there isn’t any authority or governing body that manages renovation companies, which means that there isn’t a standardised training or service guarantee. 

- Consumers with unresolved disputes can also approach Case for help by calling their hotline on 6100-0315 or by submitting a complaint online. 

- File a police report if you suspect that the renovation company has committed a fraud

Here are more ideas on how to save on your renovation cost. Ensure you have the appropriate home insurance plan, which can cover damages incurred from renovation. 

What else you can do

Go through the company’s reviews on social media, forums, and Google reviews. You can also reach out to homeowners to learn more about their experiences. 

However, navigating reviews can be tricky as reviews can vary depending on who’s reviewing them. For example, it could be that the customer has a high expectation which wasn’t met and he ended up rebuking the company. Or, it could be simply the case of fake positive reviews.

Generally, you should look at the reviews as a whole to see what the consensus is. Look for points that people mostly agree on and whether they are a one-off instance. 

Besides that, you should also research the company’s background and portfolio so that you can assess whether their style and work aligns with your budget. Be wary of designers that offer cheaper packages, especially if it’s too good to be true.

If you’re taking the DIY route to save cost, you can also consider using a digital renovation platform such as Homeez. Its proprietary AI Design Now tool allows you to DIY your own renovation, including 3D rendering,  without the hassle of comparing multiple quotations from designers. In fact, you can receive an instant quotation in a matter of minutes.

Homeez also implements an escrow payment system to ensure that deliverables and workmanship are up to scratch, prevent markups, and protect homeowners from scams. 

Since the platform deals with suppliers directly, the company claims that prices are up to 60% lower than the market rate. Homeez also handpicks and vets their contractors and suppliers so that the quality and workmanship aren’t compromised.

Ready to renovate your home?

Taking a home renovation loan can help you to finance your home renovation or new enhancements to your home. Find and compare home loans on SingSaver to find the best rates and terms. 

Read these next:
How Much Should You Pay For A Home Renovation In Singapore? (2022)
7 Ways To Lower Renovation Costs If You’re Moving Into Your New Home In 2022
A Complete Guide to Kitchen Renovations
How To Do Up Your Home Without Taking A Renovation Loan
Comparison: DBS vs Maybank Renovation Loan