Consumer watchdog issues warning over upfront deposits to renovators

SINGAPORE — With homeowners spending more on renovation packages in recent years, the consumer watchdog is concerned that the significant upfront deposits being paid to contractors are putting buyers at risk of losing their money.

This could happen especially when contractors do not deliver on the agreed services due to delays, unsatisfactory work, or business closure after collecting payment, the Consumers Association of Singapore (Case) warned Tuesday (Aug 29).

While the number of complaints regarding renovation contracts has eased since 2013, Case highlighted that the total contract value of renovation packages has nearly doubled from S$7.2 million in 2008 to S$14.3 million last year.

On average, people have been paying more than S$11,000 for a renovation contract in the past few years, compared to about S$5,700 in 2008.

For the past decade, the renovation sector has been in the association’s top 10 list of industries attracting the most complaints.

Last year it was ranked fourth with more than 1,200 complaints lodged with Case. The most common grouse was the failure on the part of the renovation firm to honour contractual agreements, followed by unsatisfactory services provided.

Earlier this month, Case reported that there had been an “alarming” increase in advance payments lost by consumers when businesses close. The total sum came to S$3.6 million last year and in the first half of this year, it was about S$1.8 million.

From January 2014 to June this year, Case received more than 2,000 complaints from consumers who reported losses of about $8.35 million arising from business closures.

Renovation contractors were among the top three businesses cited, after fitness clubs and motor vehicle firms. Case has advised consumers to be more aware of the risks involved when they make advance payments for goods and services, given the “uncertain economic outlook” and the “risk of business insolvency”.

Addressing the matter of homeowners who fork out higher sums for renovation deals, Case said Tuesday that it is organising an educational fair on Saturday to help consumers better understand what they should look out for when doing up their homes.

They can get advice on how to choose a responsible and reputable renovation contractor, learn about consumer rights for defective furniture, as well as pick up tips on how to protect their advance payments.

The Building and Construction Authority, the Housing and Development Board, and the Singapore Renovation Contractors and Material Suppliers Association (RCMA) are among the agencies who will have representatives at the fair. They will offer their expertise and knowledge on these or other home-improvement topics.

Last year, Case and the RCMA launched the CaseTrust-RCMA joint accreditation scheme for renovation businesses, under which consumers’ deposits are protected against business closure through a deposit performance bond.

There are now 30 accredited businesses under this scheme. The list of these businesses — as well as details on the upcoming fair — can be found at www.casetrust.org.sg.