What To Look Out For In Your Renovation Contract In Singapore

January 12, 2024

What To Look Out For In Your Renovation Contract In Singapore

So you've finally decided to take the plunge and renovate your home in Singapore. Exciting times ahead! But before you dive into choosing tiles and paint colours, there’s one crucial step you need to get sorted—the much dreaded paperwork. This ensures that your interests are protected during the renovation, and is the basis for a smooth sailing renovation project! 

At HomePay, we’ve seen more than our fair share of renovation contracts. Let us share with you some things to look out for, so that you can sign with ease!

Reading and Understanding the Important Terms

When signing a renovation contract in Singapore, it’s important to understand what you’re agreeing to. Read through the contract carefully and don’t be afraid to ask questions about anything unclear. Some of the key terms to look out for are:

  • Scope of work: This outlines exactly what will be done in your renovation, like flooring, walls, lighting, etc. Make sure it’s detailed and includes everything you want.
  • Timeline: The contract should specify start and end dates so you know how long the renovation will take. If you haven’t confirmed your key collection date, this can be a rough gauge.
  • Payments: Most contracts require a deposit upfront, progress payments, and a final payment. Know the payment amounts and schedule before signing.
  • Permits and licences: For major renovations, proper permits are required. Ensure the necessary permits, licences and insurance are included in the contract.
  • Warranties: Warranties protect you if something goes wrong after the work is done. Get warranties in writing for materials, workmanship, and fixtures.
  • Termination clause: This outlines how either party can end the contract. Make sure you understand the notice period required and any fees involved with termination.

Following these tips will help ensure your renovation goes as smoothly as possible. If anything seems off, don’t hesitate to negotiate the contract or look for another contractor—your home is worth getting right the first time!

Ensure That All Renovation Details Are Specified

One of the most important things is ensuring your contract with the contractor covers all the details so there are no surprises down the road.

Make sure the contract specifies the full scope of the renovation, including:

  • The areas of your home being renovated (kitchen, bathrooms, etc.)
  • The specific work being done (retiling floors, installing new cabinets, etc.)
  • Any fixtures or materials being used (marble countertops, hardwood flooring, etc.)
  • An estimated timeline for completion of the whole project

Look Out for Ambiguity

You’ll also want to check that the payment schedule and total cost are clearly outlined. Watch out for vague terms like ‘may include’ or ‘as needed’ - get concrete specifics on what is and isn’t included. Any verbal promises the contractor made should be put in writing. Don’t feel pressured to sign a contract with blanks to be filled in later.

Most importantly, read through the entire contract thoroughly. If anything seems off or makes you uncomfortable, don’t be afraid to negotiate the terms. It’s better to clarify before signing on the dotted line. Your home and money are at stake, so make sure you go in with eyes wide open! With the right contract in place, you’ll have peace of mind that your dream renovation will turn out as envisioned.

Check for a Detailed Payment Schedule

A detailed payment schedule is crucial to include in your renovation contract. This helps avoid any nasty surprises or confusion over when payments are due. Make sure the schedule clearly states:

  • The amounts and percentages of the total renovation cost required at each stage
  • Exactly what needs to be completed before the next payment is released

A payment schedule might look like this:

  1. 20% upon signing the contract
  2. 40% after demolition and rebuilding of walls
  3. 35% after installation of electrical wiring, plumbing, ceiling and flooring
  4. Remaining 5% upon completion of renovation and handing over of keys

Insist that each payment is tied to clearly defined milestones.

Other Tips

•Ask if materials need to be paid for upfront. If so, ensure these costs are stated separately in the contract.

•Be cautious of requests for more than 50% of the total cost during the early stages of renovation, especially if a large portion is requested at the first milestone.

•Make all payments by cheque or bank transfer, never in cash. This provides you with records and proof of payment.

Following these guidelines will help ensure a fair payment schedule that protects you as the homeowner, while still keeping your contractor motivated to meet deadlines and finish the job. With open communication and by addressing any concerns early, you’ll find the renovation process runs much more smoothly.

Look Out for Any Hidden or Additional Costs

Hidden fees and surprise charges are the worst. When reviewing your renovation contract, carefully scrutinise it for any hidden or additional costs that may pop up. These could include:

  • Permits and licences: Check if the costs of any required permits, licences or certifications are included in the total cost (e.g. Professional Engineer). If not, find out how much they will be and who is responsible for obtaining them.
  • Material upgrades: Pay attention to the specifications of materials and fixtures included in the quote. Upgrading to premium materials or brands will likely mean paying more. Make sure you understand all material options and associated fees before signing the contract.
  • Additional work: Look for clauses that mention “additional work” or “cost plus”. These indicate that any unforeseen work required will be charged on top of the total cost in the contract. Try to get estimated fees for potential additional tasks to avoid bill shock later on.
  • Penalties: Scan for details on any penalties, like charges for delays, cancellations or changes. Understand exactly what triggers a penalty and how much it will cost you before agreeing to the terms.
  • Warranties: Check if any equipment or installation work comes with a warranty and confirm warranty details like duration and coverage. Extended warranties often come at an extra cost, so decide if they are worth the investment for you.

Your renovation contract should clearly specify a detailed and itemised cost breakdown for the entire project. Don't hesitate to ask your contractor for clarification on any ambiguous clauses or fees. It's always better to ask questions upfront rather than be caught off guard by hidden costs down the road. Protect yourself by understanding the contract fully before signing on the dotted line.

Red Flags in the Contract to be Aware Of

When going over your renovation contract, watch out for some red flags that could cause issues down the road.

Change Orders

Even the best-laid plans can change, but any modifications to the original contract should be made in writing through official variation orders. Verbal agreements or vague promises won’t protect you if issues arise. All variation orders should list additional costs as well as any impacts to the schedule.

Dispute Resolution

No one anticipates disputes, but it’s best to address them upfront in your contract. Look for clear processes for resolving any disagreements that may come up, such as mediation or arbitration. Without these terms, you could end up in court to settle even minor issues.

Contractor Responsibilities

The contract should explicitly state what the contractor will provide and be responsible for, e.g. obtaining proper permits, site cleanup, trash removal, etc. Make sure not to be left with any unpleasant surprises or unexpected costs due to unclear or omitted details about their responsibilities.

Form Reliable Contracts with HomePay

So there you have it, the key things to watch out for in your renovation contract. Remember, a good contract should clearly outline the scope of works, timeline, payment schedule and warranty details. Don't feel pressured into signing anything until you've read and understood all the terms. While most contractors operate professionally, it's always better to be safe. If anything seems off or too good to be true, trust your instincts. You're making an investment in your home, so take the time to get it right. If needed, don't hesitate to negotiate the terms or walk away to find another contractor you feel fully comfortable with.

Remember, you are investing in your home, and precision matters. For added peace of mind, consider using the HomePay app, Singapore's pioneering escrow payment solution for home renovation. Through a meticulous onboarding process, HomePay ensures that only reliable interior designers are featured on the app. Homeowners gain the advantage of viewing payment milestones and contract details clearly, eliminating guesswork from the renovation process. Homepay ensures a seamless and secure experience for all both homeowner and interior designer—your home deserves the best, and we’re here to make that a reality!