The thing that homeowners absolutely scared of is getting scam by renovation contractor!
Unlike construction is a well-regulated industry, unfortunately, the small projects and renovation industry is not.
Finding a reliable contractor is like trying your luck because even CIDB registered companies run away after receiving money. The news of people fall victims to renovation scam is everywhere!
There are many grey areas that a normal homeowner easily falls victim to.
To make things worse, filing a report to the police most of the time would turn you down because it will be classified as a civil dispute.
And, your house is left unfinished.
How Do People Get Cheated by Renovation Contractors?
These are a few ways in which homeowner was scammed by renovation contractors.
- Your contractor collects large advanced payments to buy building materials. As you make the payment, the contractor works normally on day one but starts to delay work and eventually disappears.
- The contractor hired workers who lacked relevant experience, resulting in poor workmanship and low-quality work. Cracks started to appear on the ceiling, plumbing leakage was found, paint peeling off, and spark when toggling a switch.
- The contractor uses every excuse to not come to work, causing the project to be indefinitely delayed. They insist on payment first before resuming work.
- The contractor requests homeowners to pay an additional sum of money due to unforeseen circumstances, such as adding or changing construction material and citing quotation errors.
- The contractor does not want to rectify defects after handover and become unreachable.
- Low-quality material used and all possible shortcuts they can exploit, such as using low-power wire lines for high-power outlets and using cheap, banned chipboard as cabinet material.
These are very real situations. In the event you encounter them, there are a few steps you can take.
File A Police Report, But…
Let me be honest with you, making a police report hardly achieves any purpose. This is because a police report is meant to trigger a police investigation if and when a crime happens.
Unless you can prove the contractor has committed an offense such as cheating. For example, a person who does not know how to do renovation claims to be able to do so, and collects payment. However, this is hard to prove.
A contractor who does not complete the job can be offensive if you can prove the contractor has the intention to abandon the job and run away with the money. It’s nearly impossible to prove that!
Most of the time, you will be told to settle the civil dispute at Tribunal Tuntutan Pengguna Malaysia (TTPM).
File Claim at Tribunal Tuntutan Pengguna Malaysia (TTPM)
Known as Tribunal For Consumer Claims Malaysia is a place for you to file claims against your contractor
Website: https://ttpm.kpdn.gov.my/portal/home
What kind of claims TTPM have the Authority to Hear?
– Claims for the purchase of goods or services permitted under Act 599. Renovation services are included!
– The total amount does not exceed RM50,000.
– Within 3 years from the date of the transaction.
How to File Claims with TTPM?
– Filling up the Claim of Statement Form (Form 1) at TTPM Branch or through e-Tribunal System
Website: https://ttpm.kpdn.gov.my/login
Is there any charge for the filling?
– RM5 is to be paid for the filling
What to do after filing Form 1?
– TTPM will provide the date and place of the hearing. The Claimant shall serve Form 1 to the respondent and both parties are required to attend the hearing
What should you prepare before the hearing?
– Both parties shall gather all relevant documents regarding the claim and prepare with the witnesses before the hearing.
– No lawyer is allowed to represent either of both parties during the hearing.
Fact: The top 3 claims in 2022 are renovation (808 cases), umrah travel packages (740 cases), and electrical appliances (477 cases).
File Claim at Magistrates’ or Session Court
Renovation isn’t cheap. If your renovation cost exceeds RM50,000 limit of the tribunal (TTPM), you have to option to start a civil lawsuit against the contractor.
Filing a Civil Claim by Claim Amount:
A claim by an individual not more than RM5,000.00 can be filed in the Small Claims Court.
The Magistrates’ Court will hear all civil claims up to RM100,000.00.
The Sessions Court will hear all civil claims between RM100,001.00 to RM1,000,000.00
The High Court can hear all monetary claims (unlimited jurisdiction).
Note, TTPM we mentioned previously is not here because it falls under Kementerian Perdagangan Dalam Negeri (Ministry of Domestic Trade), while the civil claim filed at court, which is under Mahkamah Persekutuan Malaysia (Federal Court Of Malaysia).
Before Filing A Civil Claim?
To start with, filing a civil claim is complicated and costly. Before you file a claim in Court, you should first consider the following:
- Cause of action. Is there a proper basis for your claim? Have you identified a breach of contract your contractor committed?
- 6 years limitation period. Are you within the time to file your claim?
- Evidence. Do you have sufficient evidence in the form of documents or witnesses?
- Cost of Litigation. You would expect to incur court filing fees and legal costs on your side. The legal process can be lengthy. There is the possibility of losing your case and subsequently being ordered to pay your contractor’s costs! This could cost tens of thousands!
Starting a Civil Lawsuit
First, it is to get a lawyer to represent you. Unless you’re super familiar with Court procedures and Serving documents.
The detailed part of the lawsuit is not within the discussion of this article. If you wish to learn more about litigation, drop us a message!
File A Complaint at CIDB (If the Contractor is Registered with CIDB)
If the company is registered with CIDB, you can file a complaint against the company with CIDB. This could ban the company directors from getting construction licenses from CIDB.
Should I Public Shame the Errand Contractor?
Sharing your experience online is one of the ways to alert the communities, prevent more people fall victim to these contractors, and potentially get support from people to move forward from this painful experience.
We do not encourage anyone to bash any company or person without solid proof.
Leave an honest review and share the details online so more people can learn from your experience.
How to Prevent Yourself from Fall Victim to Renovation Scams?
You can protect yourself from getting into a renovation mess by doing sufficient homework.
There are 15 rules on How to Find Reliable Renovation Contractors that you should apply!
Here, we have the summary of it
1. Get Detailed Scope of Work
Never go with high-level estimates or vague details. Be aware of a contractor who says yes to everything and does not provide honest feedback on your proposal.
You need to ask for breakdowns of work. Details should include quantities, material used, pricing, drawing, and specifications.
2. Thorough background check your contractor
Contractors self-proclaim they have been in the industry for X years. But you need to check if they’re really experienced enough to take on your project.
– Check how long they are in business, and if the company is registered. Buy the company or financial info if necessary.
– Review the contractor’s past portfolios
– Get client reviews on their works.
3. Beware of the payment terms
Contractors will ask you to pay a huge amount of up-front payment to buy “material“.
A good practice is to have a progressive payment term. The first advanced payment should not be more than 30% of the contract sum.
4. Have A Written Renovation Contract
An adequate written renovation contract protects both parties. In the event of disputes, it can be resolved through the contract.
Make sure the contract is stamped to be admissible to the Malaysia Court.
Contractor do not provide proper contracting service? Learn How to Draft Your Renovation Contract In Malaysia – With Sample.
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