I would like to share two relevant posts in my blog at Propertysoul.com. Hope you find it useful. http://propertysoul.com/2012/12/21/dealing-with-renovation-contractors-part-i/ http://propertysoul.com/2012/12/27/dealing-with-renovation-contractors-part-ii/ Dealing with renovation contractors December 2012 Are you renovating your house to make it in time for Chinese New Year? I have done four major renovations and countless fixing projects for my properties in Singapore. Over the years, I manage to find at least one good electrician, plumber, carpenter, handyman, etc. But for whatever reason – perhaps it’s because I’m unlucky, or maybe it’s simply the nature of the business – I have yet to find an honest contractor or a reliable renovation company. Yes, not even one. Bad experiences with contractors What I have had are some unpleasant experiences that you may have encountered before if you have commissioned any renovation project: 1) After placing a deposit, the salespersons’ prompt responses becomes late or no reply. 2) They are very busy and you have to bear with the fact that they are often late for (or absent from) any appointment with you. 3) Timelines agreed beforehand are almost always delayed. As clients, you are expected to be flexible to cater to all unforeseen circumstances. 4) You can only expect 60 to 80 percent of what originally agreed to be done. Be prepared to accept materials, end products and workmanship different from your expectations. Of course there are some good contractors who are different from the above. But they are not cheap. Those who provide good customer service, quality workmanship and acceptable completion timeframe usually have ‘reasonable prices’ missing in their quotations. Get good recommendations Having read Margaret Heffernan’s The Naked Truth: A Working Woman’s Manifesto on Business and What Really Matters, I have picked up some tips about managing contractors: "Nine out of ten will tell you horror stories, and if they don’t, get the contractor home and put it to use." I strongly recommend talking only to renovation companies or individuals with referrals from a trusted source. Don’t just get anyone from the local paper, the yellow pages, a sales leaflet or a tradeshow. It is like going for a blind date. You never know who will show up. You really don’t have to deal with any surprise and disappointment. For small tasks like fixing the lights, giving the place a new coat of paint, repairing the leaking roof, etc., ask your trusted property agent for recommendations. Agents arrange handyman to do fixes for landlords and tenants everyday. I am sure that they use efficient and reasonably-priced ones to get the job done. It allows them to rent or sell the owners’ properties without any delay. There are other tips of managing your working relationship with renovation contractors. Some of them I learned from experience, others simply by trial and error. Be firm with contractors "Once you’ve hired a contractor and negotiated a budget, my best advice for you is to be tough on them. If you’re not, they’ll think you’re soft and a pushover." "(Contractors) will try to get away with as much as they possibly can. If you call them on it, they’ll shape up." Even if your contractor is a good friend or your close relative, don’t confuse trust with relationship. Similarly, having a friendly relationship doesn’t automatically mean that you can trust a person. When evaluating whether a contractor can get the job done, differentiate between sociability and capabilities. About budget and timelines "Be clear and upfront about timing and the inflexibility of your budget. If you need the job finished by a certain time, hold the contractors to that date. If you keep an eye on their work and act as knowledgeable as possible, you increase the chances that the contractors will respect you and get something done." Get at least three quotations from different companies. Compare quotes item-by-item. Before you get back to the selected one, draft your own listing of work items with full descriptions. For each item, add in what you think are the reasonable prices. If there is an obvious price gap of a work item between two contractors, negotiate to see whether your selected contractor can match the price. Draft your own payment terms, for example, 10 percent deposit after signing the contract, 30 percent of the fee payable when job commences, and another 50 percent after job completion. Always leave 5 to 10 percent to be paid after fixing all defects. Allow flexibility for delay in completion. However, do add a penalty clause for delay at the end of the contract. In every subsequent meeting with the contractor, put everything in writing and take detailed notes. The notes can serve as both a proof and a reminder for both parties. It will also come in handy next time when there is any argument on what have been agreed. Good and bad times When times are good, contractors are very busy. It is more difficult to bargain on prices. Give a reasonable timeframe for completion but stick to the major deadlines. When times are bad, don’t be too happy if you get too good a bargain. Contractors tend to cut corners to get your business. Be careful of commissioning a project when the market is recovering. Costs of raw materials and manpower will be on their way up when your place is work-in-progress. To make ends meet, the contractor may ask you to top up the difference so that they can afford to pay their suppliers and finish your job. Worse still, some contractors may go bust because of their underquotes in too many projects. Now it’s your turn to share with me your experience with renovation contractors.