Reno scam victims who lost total of S$527,000: What I wish I knew before starting reno works

Renovation nightmares: Shoddy workmanship, unresponsive contractors, and unfulfilled promises.

Claire M Teo | April 08, 2022, 09:30 PM

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Home renovations can be incredibly exciting and rewarding experiences. As you watch a nondescript apartment morph into the home of your dreams, a gush of exhilaration courses through your veins.

However, faced with shoddy workmanship, unresponsive contractors, and unfulfilled promises after paying almost the full contract sum, home renovations become nightmares that homeowners struggle to wake up from.

Mothership spoke to several homeowners going through such an ordeal. Swindled by unscrupulous renovation companies, they experienced much heartache, despair, and thousands of dollars in losses.

Indefinite delays, excuses, and requests for upfront payments

In 2018, Leong suffered a harrowing experience with a renovation company while trying to fit out his new build-to-order (BTO) flat.

As a means of financing the renovations, Leong took out a bank loan of S$42,000. The bank subsequently issued the money — via two cheques of S$21,000 each — to the renovation company directly.

On hindsight, Leong said that this arrangement was problematic because if the bank had issued the cheques directly to him, he could have controlled the flow of cash to the company.

According to Leong, construction began as soon as the first payment had been received by the company and the project progressed quite rapidly for the first two weeks.

Following that, the renovator made Leong an offer he could not refuse:

“I was told by the guy who conned me that if I paid the second payment, the renovation would be completed in less than two weeks.”

Sub-contractors apparently "ran away"

Since the initial renovation works were well underway and the company had been recommended by a friend, an unsuspecting Leong let his guard down and authorised the payment of the second cheque.

Unfortunately, the situation soon turned sour.

“Of course, I just paid... but once I made the second payment, the contractor started to go MIA already, not replying my WhatsApp messages, not picking up my calls, nothing,” Leong said, expressing that he was “talked into” paying for the renovation works upfront.

With the benefit of hindsight, he now realises that it was a “very casual agreement”.

Leong recalled that the contractor then began presenting a myriad of excuses, claiming to be extremely busy and unable to handle the renovation works.

He added that these delays and excuses dragged on for about three to four months, by which point, only an estimated 15 per cent of the renovation works had been completed.

Image courtesy of Leong

Image courtesy of Leong

Frustrated, Leong continued to hound the contractor who then requested to meet Leong at a McDonald's in Jurong to "explain" the renovation delays in person.

According to Leong, the contractor shared during the meet-up that his subcontractors "ran away" after being paid, before proceeding to present Leong with a "solution".

"He gave me another contract to sign without any letterhead. It seems to me that he wanted to pass this contract to another company to handle so that once I signed the contract, he could wash his hands off already”, said Leong, who refused to sign the second contract when he suspected something was amiss.

To complete the renovation works, Leong had to hire another contractor, painstakingly, out of his own pocket, although he was not able to recoup the S$42,000 lost to the previous contractor.

Even though a few years have lapsed since the incident, Leong's emotional wounds still linger on to date. 

Sadly, Leong's case is just one of many cases of renovation nightmares — such as this next one where a group of 16 homeowners lost S$485,652 in total. 

Lower-than-usual prices and elaborate scam tactics

32-year-old Kelvin (not his real name) is among a group of 16 homeowners who were scammed by a renovation contractor, who operated under the guise of various names.

Recounting his experience, Kelvin shared that this contractor was recommended by a neighbour who claimed that they were a "direct fabricator who did ID (interior design) jobs at better price"

This contractor showcased a couple of past projects to Kelvin, who now believes that it was just a tactic to entice potential customers to sign up with him and that elaborate displays were all part of the contractor's charade to enhance his credentials.

Speaking on behalf of the group, Kelvin elucidated:

“He would show us one or two units within the estate that had been done up, almost 70 to 80 per cent.”

Kelvin believes that these "exhibitions" were part of the contractor's elaborate ruse to convince potential customers that he was a reliable contractor.

Furthermore, Kelvin pointed out that the contractor had his very own factory to fabricate carpentry works.

Tucked within an industrial area amidst other carpentry, glass, and renovation companies, the factory’s two-storey premise contained an office at the upper storey and a work area on the lower floor.

“When we visited the place, it (looked) legit. We could see that carpentry was ongoing, that built our trust — he was very convincing,” said 33-year-old James (not his real name), who belongs to the same estate as Kelvin and had signed the contract at the factory.

As for Kelvin, he stressed that he was “in need of a house” and that he needed to “move in urgently”. He thought that the contractor could deliver the renovation works faster and hence engaged the contractor shortly after visiting the factory.

Prices were lower, but not too good to be true

Kelvin also pointed out that the contractor capitalised on consumers' desire for cheaper alternatives by offering lower prices than other contractors. However, he added that the contractor's quote was “not ridiculously low” either and that it did not appear too good to be true.

“I think it’s not that far off (compared to other contractors’ quotes), just maybe a few thousand”.

Kelvin recalled that once he and the homeowners had signed up with the contractor, they were made to pay 30 per cent of their total renovation costs, as a deposit.

This wasn't anything out of the ordinary since contractors typically require about 20 per cent of renovation costs as deposits. However, according to Kelvin, the contractor later demanded two more rounds of upfront payments, even before the construction started.

“Subsequently, when we were just choosing the tiles, we had to pay about 20 to 30 per cent. And after that, when they’re going to start with the carpentry, we had to pay another 30 per cent or so. Those were before the works even started.”

Money transferred to contractor's personal bank account

There were other issues that raised the homeowners' suspicions.

According to James, some homeowners were told to transfer the payments to the contractor’s bank account via PayNow, rather than to a corporate account.

Some homeowners had initial doubts about doing so and questioned the contractor about it.

In response, the contractor became slightly enraged and agitated, emphasising in an aggressive tone that “it’s the same” as paying to the corporate account since he’s “the sole shareholder and director of the company”.

Unfamiliar with industry practices, the homeowners backed down and transferred the money to the contractor's personal bank account without further consideration about whether it was safe to do so. 

Additionally, James recalled that the contractor's name on his identity card differed from the name that he called himself.

“When I asked him why he used a different name, he said, ‘I’m a subcontractor of very big ID (interior design) companies...I am actually moonlighting so I need to use a different name so that the industrial players don’t know that I’m the one moonlighting’”.

But when it was time for the contractor to carry out the carpentry works, that was when things started falling apart. He stalled the entire process, presenting the homeowners with a barrage of excuses.

For example, he claimed that there was a shortage of manpower amidst the Covid-19 pandemic. A year on, however, the contractor has made no effort to complete the works, neither returning the homeowners' phone calls nor answering their text messages. 

In Kelvin's case, he paid about 95 per cent of the contract sum upfront, amounting to around S$53,000, an astonishing sum to pay for almost no renovation progress.

Image courtesy of scam victims

Stress, emotional anguish, and grief endured by victims

Many of the homeowners described the entire experience as a bitter pill to swallow, laced with emotional suffering, beyond hefty financial losses. For some, the episode has also robbed them of some of their family heirlooms and fond memories of loved ones.

One homeowner and renovation scam victim, Charles (not his real name), told me that the flat that he wanted to renovate was actually a home for his grandfather who has since passed on.

“I bought this unit for my grandfather, he passed away in 2019". Heavy with emotion, Charles paused before continuing,"this was a really bad experience for me”.

In addition to being scammed of thousands of dollars, many antique items which held sentimental value for Charles were damaged by shoddy initial renovations and stolen prior to the contractor's disappearance.

“There’s some old stuff that I want to keep because this place belongs to my grandparents. So a lot of my old furniture, some of my antique stuff have been totally destroyed...the subcontractors) destroyed some of the things I have."

Glen (not his real name), another homeowner who was also duped by a contractor, expressed, “It’s a struggle, it affects people’s lives...not just our finances."

“Do you know how many arguments we had as a couple because of this?” Glen exclaimed, exasperated.

Anthony (not his real name) and his wife, who are parents of three and suffered a similar fate, echoed Glen's sentiments, acknowledging that the hardship and stress had taken a toll on them.

“It’s not just a loss of financials, loss of time, but the stress that we go through emotionally and physically. This incident really leaves you with a black mark throughout your whole life that you will not won’t go away.”

Describing the condition of his new house at the time, Glen said that it was “worse than a refugee camp”:

“I didn’t have a place to cook, I didn’t have any wardrobe to put my belongings...I want to put this behind and then move on.”

Image courtesy of scam victims

Haunted by the predicament, Anthony's wife also referred to the ordeal as extremely "heartbreaking", confessing that it has severely affected both her and her husband's sleep.

“It keeps on ringing in our head every night. Every night, every time when we wake up we always think of it. Honestly we are not earning so matter how much we try to put this aside, we still have to service the renovation loan for five to six years. It’s really heartbreaking, it’s not easy but what can we do?”

“If I can roll back time…” : Advice and lessons learnt

Although falling victim to these renovation scams has caused these homeowners considerable heartache and significant monetary losses, it has taught them many invaluable lessons along the way.

“If I can roll back time, it will be to be more aware of our rights and to really scrutinise the contract properly,” reflected one of the homeowners.

Many of the victims also stressed the importance of verifying the contractor’s company against a list of CaseTrust companies or contractors who are registered with HDB, urging new homeowners to research thoroughly before settling for a company.

“I wish I had done more research first and also, I should have picked a CaseTrust company. There’s this website that you can see all the CaseTrust certified (companies),” said Leong, in retrospect.

Image via CaseTrust website

The Renovation Contractors and Material Suppliers Association of Singapore (RCMA) also recommends that homeowners do not pay more than 20 per cent for the deposit, as a preventive measure to avoid losing large sums of money to unscrupulous contractors.

Aside from the deposit, the victims also suggested making progressive payments when the different stages of the renovation works are completed to satisfaction, to avoid monetary disputes.

Finally, Leong encourages homeowners who face similar challenges to seek the help they need and to continue spreading awareness about renovation scams online.

“Don’t be quiet, you have to voice out. If you need to seek help, you have to. Although it's a very tough time now, you have to move on instead of fixating on the money. You have to look forward and also spread awareness online.”

Top images by scam victims