More than 100 renovation complaints were lodged with CASE every month for seven straight years. If you are in the process of choosing a renovation contractor or interior design firm, the next 20 minutes of reading could spare you months of misery, agony, stress, and anxiety as another victim of renovation cheats and frauds.
The average homeowner spends years saving up for renovation, and many spend years more paying off renovation loans. Why lose your hard-earned savings to scammers or irresponsible contractors? The police often cannot help because these are civil cases, not criminal — and even the relevant authorities (CaseTrust, HDB, Small Claims Tribunal) have limited recourse when a company simply shuts down.
Every year for the last seven years, more than 1,200 victims fall prey to renovation scams in Singapore. Before you silently assure yourself “it won’t happen to me”, think again. A great percentage of victims did do some form of due diligence and yet ended up losing their life savings to professional scammers. You owe it to yourself to know what you’re getting into.
A bulletproof approach
What is the most comprehensive approach? Plenty has already been written about renovation scams, cheats, and frauds, but it is hard to find a one-stop reference where information is constantly updated and where the approach is genuinely defensible. This guide is written with the homeowner in mind, with one goal: to dramatically reduce your risk of becoming a victim of home renovation scams.
If you are about to engage an interior design firm for renovation, the information in this guide is designed for you. Spread the word — share the page so we can collectively keep the bad apples in check.
Overview of the renovation industry
The renovation industry continues to feature in the top ten lists of consumer complaints. Why does it hold the title for one of the highest numbers of complaints filed with CASE in the past decade?
A loosely regulated industry
Anyone can register a company, lease a shop space, and start operating a renovation business. They can claim to be interior designers and start collecting payments. Worse still, when a company’s bad reputation builds up, the bad apples can fold and reopen under a new name to continue with their deceptive ways. There are no regulations or laws preventing them from doing so.
Data from CASE (Consumer Association of Singapore)
Comparison of the number of renovation complaints received over a recent decade:
| Year | Number of complaints |
|---|---|
| 2008 | 1,254 |
| 2009 | 946 |
| 2010 | 1,313 |
| 2011 | 1,488 |
| 2012 | 1,532 |
| 2013 | 1,779 |
| 2014 | 1,462 |
| 2015 | 1,447 |
| 2016 | 1,269 |
| 2017 (Jan-Jul) | 719 |
In 2016, 1,269 complaints were lodged against errant contractors. The first seven months of 2017 alone produced 719 complaints — an average of slightly over 100 per month. Should the trend continue, that puts 2017 on track for no fewer than 1,200 complaints, similar to 2016.
A 12% drop year-on-year in 2016 may not reflect actual figures of unhappy homeowners. Linus Ng, Chairman of the Education Committee at CASE, has said: “We suspect the number of complaints we have is only a fraction. It’s the tip of the iceberg. There are many smaller players out there, and a lot of these smaller players are probably doing a lot of dubious practices which could harm consumers.”
The bottom line: as the homeowner and end consumer, you are at the disadvantaged end of the transaction. Equipping and protecting yourself is essential.
Renovation scams — real stories
True stories help you understand what went wrong. Valuable lessons can be learned so you do not fall into the same traps as the thousands of homeowners who have over the years.
89 victims involving nearly $1.8 million
Even today, where information is easily available, eighty-nine victims were cheated over less than two years — with twenty-one of the charges alone involving some $770,000. The mastermind, found to be a repeat offender previously jailed for cheating, was sentenced to seven years and nine months in prison.
Lessons learned: if you find a renovation deal that is too cheap to be true, it probably is. Run a background check, search reviews, and dig into forums. As a reference for fair and reasonable pricing, browse our renovation packages — if a quote is 40% cheaper than published rates, think thrice.
ID salesperson scammed over 10 victims
A homeowner thought he had discovered gold when the salesperson of an ID firm quoted him a deal that seemed unbelievably cheap. A $1,000 plus 40% advance deposit did not raise red flags. He thought engaging an ID firm meant the homework was done and did not visit site often enough. When asked to transfer the full balance, he did so based on the salesperson’s regular updates — updates that turned out to be false. Works had halted long before because the workers had not been paid.
Lessons learned: get at least three to five quotes from different ID firms (you can request a quotation here). If one quote is 30-40% cheaper than the rest, question why and investigate further. Pay only via traceable means (cheque or cashier’s order) made out to the company, never to a salesperson personally. If asked for personal transfers or cash to a salesperson, walk away.
Homeowner shares his renovation scam experience
This homeowner was tricked when he found a renovator who charged some 40% cheaper than other ID firms. He did not find it unusual that he was made to pay more than 50% upfront. He later shared that he made a mistake by not obtaining receipts, and that proofs of internet banking transfers may not be sufficient as evidence in court.
Lessons learned: payments must always be made to the firm and not to the names of a salesperson. Demand official receipts in exchange for payment. Never agree to pay more than 10% at the initial signing of agreement. CaseTrust/RCMA-accredited ID firms are only allowed to collect a maximum 10% deposit, specifically to protect homeowners from errant ID firms.
Licensed HDB contractor goes MIA
A seven-year-old HDB-licensed contractor became suddenly uncontactable. Five complaints were lodged with CASE for uncompleted works. The company website went down. The salesperson stopped replying. A check with the relevant registries revealed that the company had received prior suspension from HDB and that its paid-up capital was a mere $100 according to ACRA records.
Lessons learned: when renovating an HDB home, check that your contractor is licensed by HDB and look for any history of suspension or demerit points. These are not conclusive of intent to scam, but they are tell-tale signs of the company’s work ethics.
Couple paid 90% in advance — firm did not deliver
A couple paid 90% ($63,000) of their renovation upfront to a firm that was not CaseTrust-accredited. The firm’s HDB licence had even been terminated, and yet the renovation went ahead. The couple had obtained five different quotes before deciding on this firm. Their primary reason: the ID could communicate well and seemed to understand what they wanted.
Lessons learned: at no time should a homeowner pay upfront for work yet to commence. Always negotiate a progressive payment scheme. When engaging a renovator to renovate your home, reliability, responsiveness, and trustworthiness should prevail over the ability to impress on communication skills.
14 complaints lodged amounting to over $450,000
One homeowner paid $43,774 upfront (funds taken from a bank loan) to an ID firm. Another victim paid $33,000 in full after the company showed them two renovated houses they claimed to have completed. Many customers paid in full before renovation works had even begun. A check with ACRA revealed the firm was barely a year old with a paid-up capital of just $2.
Lessons learned: never pay in full before work even starts. Always check that the ID firm is accredited and licensed with the relevant authorities. If a startup has a paid-up capital of just $2, be cautious about engaging them at all, never mind paying up front.
15 BTO homeowners lose more than $170,000
These BTO homeowners were approached by a contractor when collecting their HDB BTO flat keys. Some paid most of the cost; others paid in full. A few were even kind enough to lend the contractor money. When the contractor cited cashflow problems and asked for advance payments to continue, most complied — and most never saw their renovations completed.
Lessons learned: if a contractor leans on the “cashflow problem” excuse to extract more funds while works stall, be alarmed. Payments should be made progressively as work is completed, never in advance.
A 20-point guide to protecting yourself
The checklist below is divided into two parts. Part one applies before you select your renovation firm; part two applies after you have decided.
Before you decide on an ID firm
1. Choose a CaseTrust/RCMA-accredited firm. Whether private residential or HDB, an ID firm jointly accredited by CaseTrust (Consumer Association of Singapore) and RCMA (Renovation Contractors and Materials Suppliers Association) offers the first and most important line of defence. These firms are required to protect a customer’s deposit by purchasing a performance deposit bond, which safeguards homeowners against liquidation or closure.
Of the more than 1,500 companies registered as operating a renovation business in Singapore, only a tiny fraction are jointly accredited. To qualify, these companies are also required to provide a clear fee policy, a well-defined business system, and well-trained personnel.
Home Reno Pte Ltd is one of these jointly accredited companies. Browse our renovation packages and shop with peace of mind.
2. Confirm registration with ACRA. Check that the company is registered with ACRA (Accounting and Corporate Regulatory Authority). If it is not in the directory, it is not a legitimate company. Search using the company name exactly as it appears — for example, “Home Reno Pte. Ltd.” Leaving out the full stop will return no results.
3. Confirm an HDB licence (if HDB renovation). If you are renovating an HDB flat, the ID firm must also be a licensed contractor with HDB. The HDB directory page for each company shows useful information including any past suspensions or demerit points sustained over the past 24 months.
4. Look for RCMA membership. A registered RCMA member commits to industry standards. Even where CaseTrust accreditation is not present, RCMA membership is a positive indicator.
5. Use CaseTrust at minimum. Even if for whatever reasons you choose to go with a firm not jointly accredited, they should at least be accredited by CaseTrust as a bare minimum.
6. Screen the CaseTrust consumer alerts page. Visit the consumer alerts archive before deciding on a firm. Companies that have been flagged with complaints often surface there.
7. Check the Singapore Police Force public posts. Police social media accounts occasionally share scam alerts. See whether the firm you are evaluating shows up on any outstanding cases under investigation.
8. Visit the firm’s physical office. Before signing on the agreement, visit the firm’s physical office and confirm they operate as a business should. If the office turns out to be a makeshift shop or a mailbox address, keep your money and run in the opposite direction.
9. Compare at least three to five quotes. Regardless of whether the firm was a referral or a friend’s recommendation, you should have a few quotes for comparison. The process of meeting multiple ID firms also helps you gauge who is most reliable, and you may pick up better ideas from different IDs.
10. Be alarmed by quotes 30-40% lower than the rest. Greed has been the downfall of many. A significantly lower quote — comparing the same items and materials — should raise alarm bells, not excitement.
After you decide on an ID firm
11. Pay no more than 10% as initial deposit. A CaseTrust/RCMA-accredited company is required to collect no more than 10% as initial down-payment. Non-accredited companies may quote up to 30% citing company policy.
12. Document requirements and timelines. Specify and document the requirements properly. Indicate a timeline for the completion of works. Specify a progressive payment schedule — when each payment is due and what amount.
13. Make payments to the company only. Each payment should be payable to the company engaged. Never make personal payments to a salesperson in their own name.
14. Collect official receipts. Always collect an official receipt for every payment. Do this immediately at the point of payment, not afterwards.
15. Use traceable payment methods. Payments should preferably be made via crossed cheque or cashier’s order. Bank transfers and cash are less desirable forms of payment when it comes to protecting yourself.
16. Never pay in full before completion. Do not agree to make full payment before all works are complete, even when a contractor cites cashflow problems and asks for sympathetic advance payment.
17. Visit the site weekly. Once a week is usually enough. Mix announced visits with unannounced ones — popping by sometimes when no work is scheduled gives you a much truer picture than only visiting when the team is present.
18. Inspect before each progressive payment. Each time a progressive payment is due, request an update on what has been completed. Make a site visit to verify before paying. Bring a notepad or use your phone to note items and issues to raise before the next payment.
19. Raise issues early, not late. If something is done incorrectly, raise it before the progressive payment and get a written timeline for rectification. Do not leave issues until the 90% mark — by then, the firm may be preoccupied with other ongoing projects, and resolving small outstanding items will take much longer.
20. Communicate clearly and often. Misunderstandings and delays often happen as a result of unclear communication. Be meticulous and detailed; do not leave it to assumption that the team can read your mind.
Final word
If you have covered every one of the twenty points above, be proud. You have done your homework. You are one step closer to having your dream home instead of a nightmare engaging a renovation cheat.
If you would like to talk through your project with a CaseTrust-accredited team, request a quotation or message us on WhatsApp — we have been delivering renovations in Singapore since 2007, and we are happy to walk through any of the points above with you in detail.