Renovation Disputes in Singapore
Disputes between contractors and homeowners may arise over renovation defects and shoddy workmanship. This article provides some basic considerations behind selecting the right contractor, as well the various dispute resolution options available in a renovation dispute.
1) Things to bear in mind
Choosing the right contractor
It is advisable to choose an accredited contractor. Organisations such as CaseTrust or the Renovation and Decoration Advisory Centre (RADAC). RADAC provides accreditation schemes to ensure the high standards and conduct of their accredited member contractors.
Prior to the commencement of renovation works
Always ensure you sign a contract with your renovation contractor, and take great care to read the terms and understand your rights and obligations under the contract. Request for and keep a copy of the contract with you.
Most contractors use standard term contracts commonplace across the industry. Examples include the CASE model agreement. Avoid signing the contractor’s proprietary contract as it may be drafted unfairly in favour of the contractor.
Read your renovation contract
The contract should spell out the precise terms binding both the homeowner and the contractor. For certain types of works, you may require approvals or permits from the HDB or the BCA. The renovation contract governs the obligations of the contractor.
Prior to the commencement of the renovation works, your contractor may have made oral promises beyond the scope of the renovation contract. However, oral promises may be difficult to enforce if there is little evidence of exactly what was promised to you. If you wish to, you may request that the contractor commit the oral promise to writing.
In any case, contractors or their representatives cannot make false claims, oral or written, to mislead or misrepresent their client. If they do so, the homeowner may be entitled to bring a lawsuit against them.
Important contractual terms
- Payment: Payment should be made progressively; do not make full payment upfront.
- Commencement and completion dates and schedules.
- Liquidated damages: Liquidated damages clauses state the amount of damages which a party which has breached the contract will have to pay the other party. Therefore if the contractor breaches the contract, the homeowner may be able to claim the amount of damages stated in the liquidated damage clause instead of having to prove and quantify the exact amount of his losses first.
- Variations: Without a variation clause, the homeowner may not have the power to require the contractor to alter the works, and the contractor may charge a higher price or delay completion.
- Warranties: As to workmanship and the quality of materials.
- Rectification of defects: Obliging the contractor to rectify or defects before handover.
- Dispute resolution: A mediation clause can oblige both parties to refer the matter to the Consumers Association of Singapore (CASE) or other neutral parties in the event of dispute.
During the course of renovation
During the course of renovation, you will want to closely supervise the works and communicate any concerns to the contractor immediately. If there are defects, gather evidence of the defects for future use. Only make the progress payments after you verify that the works are satisfactory.
If you are unhappy with your current contractor and wish to engage a third-party to take over the works, you must inform your current contractor and come to a mutual compromise as to termination and payment. Subsequently, you should inform the new contractor of your requirements, apply for a new HDB permit if applicable, and change your house keys if necessary.
2) In the event of a dispute
Communicate with your contractor or the liable party
Read the contract to determine if the contractor has breached the relevant contractual terms. To save time and costs, any discontentment should first be communicated to the contractor or the liable party, to give that party a chance to rectify the defect and reach an amicable resolution.
Third-party suppliers or subcontractors
The contractor may not be liable if the defective materials are supplied by third-party suppliers sourced by you.
If the defective works are subcontracted, the main contract between you and the contractor may have laid responsibility for the acts of the subcontractor upon the main contractor. Read the terms of your contract to find out which party will be responsible for the subcontractor’s acts.
Lodging a complaint with the Consumers Association of Singapore (CASE)
You may consider lodging a complaint with CASE if your matter is a consumer-to-business dispute. CASE can either correspond with the contractor on your behalf, or draft a letter to the contractor addressing your concerns.
Mediation at CASE or a neutral board
CASE provides an affordable mediation scheme for the benefit of consumers. If mediation is successful, a binding settlement agreement can be reached and signed by both parties. If the contractor reneges and breaches the settlement terms, you will have a cause of action against the contractor.
Be wary of acceding to mediation by certain trade associations. If these trade associations are dependent on their members for funding, their mediation panels have to be examined carefully to determine whether they are fair and unbiased.
Lodging a claim with the Small Claims Tribunals
You can lodge a claim at the Small Claims Tribunals (SCT) if the date of the cause of action was not more than a year ago and that you are claiming for a sum up to S$20,000 (or up to S$30,000 if the contractor agrees to bring the claim to the SCT).
The date of the cause of action refers to the date when the renovation contract was breached, or the date when renovation was to be completed but was delayed or completed in a defective manner, to name a few examples.
If your claim exceeds the prescribed limit, you may want to consider lowering your claim amount. If you do so, you cannot claim for the remainder sum thereafter.
To determine the size of your claim, you can check with another contractor to find out how much it would cost to rectify the defect.
Read more about filing a claim at the Small Claims Tribunals in our other article.
Obtaining legal advice or commencing litigation
Your renovation contract may contain clauses which make mediation or arbitration compulsory. If so,you may not be able to bring a lawsuit against the contractor until you have attempted mediation or arbitration, depending on your contract’s precise terms.
In any case, if you have exhausted all other options, and the quantum or type of your claim falls outside of the SCT’s jurisdiction, you should consult a lawyer to obtain legal advice, and determine whether litigation is an appropriate solution to your matter.
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