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6 tips to avoid problematic home contractors and how to choose the right ones


Before building or renovating a home, there are a few things you need to make sure of to avoid losses due to bad contractors.

how to avoid bad contractors
© Soonthorn Wongsaita/ 123RF

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This article was translated from 6 tips untuk pilih dan elak kontraktor rumah bermasalah by Rebecca Hani Romeli. 

For a long time, there have been so many cases in Malaysia involving contractors who caused problems while building or renovating houses. Based on the annual report by the National Consumer Complaints Centre (NCCC), the housing sector recorded the second-highest number of complaints, at 19.4%. This is based on the number of complaints reported to NCCC by consumers.

Among things that have been reported was the price of a project that has been promised differs from what has to be paid. Not only that, the workmanship is still unsatisfactory even if you’ve paid more money and what’s worse, the contractor disappeared with the money that has been given to him. What would you do if this is happening to you? Let’s find out in this article.

Examples of complaints received by NCCC

Among the complaints that are often received and frequently reported by consumers to NCCC are as follows:

  • The contractors used low-quality building materials, resulting in the roof collapsing and walls cracking. 
  • Contractors are also said to charge high fees to consumers/ clients. They will double charge the client for repair works if this person complained about not up to par work, even though it’s the contractor’s fault.

1. Common mistakes that are often made by homeowners

Several things may worsen these problematic contractor issues. While this may seem insignificant, every discussion and matter agreed upon needs to be stated in a lawfully written document.

 Here are some of the common mistakes that are often made by homeowners, that you should avoid: 

  • No written document clearly describes the conditions set for the process of building or renovating a house.
  • Both parties aren’t aware of their respective rights and no clear guidelines to explain this.
  • Homeowners did not do an in-depth background check on the contractor that they wanted to hire. Some simply hire a contractor based on friends’ recommendations. 
  • Homeowners made full payments even if the work has not yet begun (trust basis)
  • Homeowners did not monitor the work progress. Make sure you are keeping up with the progress from time to time, even when the project is almost completed.
  • After the project was abandoned, homeowners waited too long before taking action or filing a complaint against the contractor.

2. Check the contractor’s background and keep the relevant documents

Here are the must-do’s before and when hiring contractors.

  • Check the contractor’s background by asking for reviews from a neighbourhood friend or other clients.
  • Make sure that the contractor is registered with the Companies Commission of Malaysia (CCM),  also known as SSM.
  • Check the contractor’s license at Construction Industry Development Board (CIDB). Make a complaint to CIDB if there are any problems with the contractor or misconduct for further actions.
  • Request for a quotation before you pay any deposit.
  • Apply specific provisions or clauses in case the contractor fails to complete work within the stipulated time. You may also set a discount penalty if the work is unsatisfactory or late in completion.
  • Make sure there are written documents and a valid agreement between you and the contractor.
  • Take time to read and understand the terms and conditions set out in the contract or agreement before signing it. 
  • Make sure you keep a payment receipt or a copy of it (photo) as proof in case the contractor does not want to repair the damage and you want to take action against the company.

READ: Collateral Warranties: Should construction protection be extended to homebuyers?

3. Prepare an agreement or contract between the homeowner and the contractor

An agreement between the homeowner and the contractor is necessary to protect the homeowner’s rights in the event of a disaster. It can also be used as a reference in case of doubt or dispute, and can also be used as evidence or a legal document in court. 

Here are the items that need to be included in the agreement:

  • Date of signing the agreement
  • Date of project completion 
  • Do include the definition of a completed house and list down the conditions that must be complied, which indicates the house construction or home renovation is 100% completed.
  • Penalty if the contractor fails to complete the project on time
  • Building materials for walls, roofs, floors, number of switches and others
  • Names and addresses of contractors and owners
  • Stages of payment – before the homeowner pays the amount, each stage must be certified by a qualified consultant, such as an architect, etc.
  • Defects Liability Period (DLP) – the contractor has to repair any damage to the project within this period

4. Consult with a professional before hiring home contractors

For reference, you can seek the following professional services to obtain accurate confirmation of the related matters:

  • A fair contract –  Architects / Quantity Surveyors (QS)
  • A building plan that is approved by the local council – Architects 
  • An on-site design that is according to the approved plan – Engineers
  • On-site progress according to payments made – Architects, engineers, and QS
  • House building materials according to the SPA – Architects and Engineers

5. Relevant laws in case of any issues

If you’re facing any problem, you can file a claim with the Tribunal for Consumer Claims Malaysia (TCCM)  under Section 53, Consumer Protection Act 1999.

6. How to file a consumer tribunal claim

  • First, file a claim by filling in Borang 1. You can get this form at all Tribunal branches or download it from the e-Tribunal portal. Payment of RM 5.00 must be made for filing the form.
  • A copy of Borang 1 will be submitted to the claimed party, and both parties must attend the hearing. The date of the hearing will be fixed by the Tribunal.
  • If the claim is successfully settled with the consent of both parties, the Tribunal will issue an Award (this term applies to the settlement offered by the Tribunal). The award may be in the form of money paid to the complainant or substitute for goods purchased.
  • By law, you are only allowed to file a claim up to RM25,000 only. The money was not paid by the Tribunal, but by the claimed party, as instructed by the Tribunal.

READ: BSN MyHome (Program Perumahan Rakyat) 2021: Everything you need to know

To prepare yourself for future possibilities, be sure to keep all documents related to the purchase and the service you obtained from the dealer as proof. Among the documents that can be used as evidence are invoices, receipts, advertising brochures, damaged items, and other documents that can support your claim for damages. Good luck!

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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