©The
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.
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Errant contractor
14 Oct 2008 12:00 am