Star (Used by permission)
by Bhag Singh
What recourse does a house owner have when a renovation job goes awry?
A READER wrote in to ask: “What action can we take if the contractor we hire to renovate the house does not complete the job but has been paid in full and other contractors had to be called to complete the job, incurring additional expenses? The renovation work was not done properly and after two months, cracks started to appear on the ceiling, the plumbing was out and the paintwork was peeling. Although a police report was made, no action was taken against the contractor. The reason given by the police officer was that since he is an individual, no action could be taken against him. Is this correct? Whom do we refer to in such instances?”
To start with, I must say that unless it is appropriate, making a police report hardly achieves any purpose. This is because a police report serves as a first information report, which triggers police investigations if, and when, an offence or crime occurs.
The contractor must have committed an offence such as cheating, for the police to take action. Thus, if a person who does not know how to do the repairs or renovation work claims to be able to do so, and collects payment and then disappears, it could be a case of cheating.
However, where a contractor has not completed the job, it could, at most, be an offence only if at the commencement of the arrangement entered into, the contractor had a pre–conceived intention to abandon the job or abscond with the money. However, this would be difficult to prove, even if prosecution was instituted.
The situation posed by our reader would fall into the category of a civil dispute in which the police are not involved. It is a matter for the aggrieved party to pursue on the basis of a civil remedy by going to a tribunal that exists for the purpose, or through the courts by instituting a civil claim.
However, whilst the option to pursue a civil claim exists, it may not always be a cost–effective exercise in terms of money and time.
The amount involved will be a valid consideration in deciding whether to pursue the matter in this manner. Apart from this, a litigant would want to weigh a successful outcome against the practical reality of being able to recover the money, as against only getting a paper judgment.
It is also relevant to be aware of such a house owner’s real grievance.
In ordinary terms, any dissatisfaction may be classified as a failure to complete the work. However, in the context of construction activity, there is a difference between incomplete work and work practically completed but where there are defects which need to be rectified.
If the amount to be claimed against the contractor is less than RM10,000, it may be possible for the aggrieved person to file a claim with the Tribunal for Consumer Claims constituted under the Consumer Protection Act 1999. The objective here would be to recover monetary compensation.
This is on the basis that such a claim would be in respect of supply of services. Section 53 of the Consumer Protection Act 1999 provides that “where services are supplied to a consumer, there shall be implied a guarantee that the services will be carried out with reasonable care and skill.”
The Act also provides redress to a consumer against the supply of goods which fail to comply with the implied guarantees, with regard to quality and fitness for a particular purpose. However, if the loss or damage caused is more than RM10,000 then the remedy would have to be sought in the courts. But if the amount is just slightly more than RM10,000, the aggrieved party may want to limit his claim to RM10,000 so that redress can be obtained through the Tribunal for Consumer Protection.
Otherwise, the aggrieved party will need to resort to the courts to obtain relief. Going to the courts has its challenges for the ordinary individual. As an alternative, it would be more practical to rely on preventive measures and avoid getting into such a situation.
It is unwise to give the contractor all the money due, at an early stage or even at the outset. This will create a disadvantage for the houseowner as there is no more hold on the contractor to carry out the task satisfactorily.
Whilst it is common for many contractors to ask for advance payment, the house owner should only pay an amount which is appropriate in the circumstances. Ask the contractor to list out the stages in which work is to be done, and the payment to be made for each stage when it is completed or partly completed.
In many cases, the contractor may want an advance to purchase material. It would be a good idea to get the contractor to agree to an arrangement whereby the houseowner will pay directly to the building material supplier in return for the material supplied. This amount could then be set off against the amount payable to the contractor.
However, it is also possible that the contractor needs an advance to pay his workers daily. If this is the case, it would be a signal to the houseowner that the contractor may not be financially sound.
If more and more payment is being made and less and less work is being done, this could be an indicator of impending problems.
Star (Used by permission)