Choosing the Best House Contractor in Malaysia - A Guide to Selecting the Right One | Blog

Table of Contents

1. What are the characteristics of a good house contractor in Malaysia?

Choosing the right contractor for your home construction or renovation project is an important decision that requires careful consideration. Here are the main characteristics of the best house contractors in Malaysia:

Extensive experience – Look for contractors with at least 5-10 years of experience in similar projects to yours. Ensure they have a proven track record of successfully completed projects.
Strong portfolio – Review the contractor’s portfolio and testimonials of previous projects. This helps evaluate their capabilities and work quality.
Licenses and permits – The contractor should possess all required licenses and permits to undertake the construction project. This includes contractor’s license and MBPJ permit.
Insurance – They need to have public liability insurance and workmen’s compensation insurance to protect you and the workers.
Membership in professional bodies – Membership in associations like REHDA indicates commitment towards professional standards.
Good reputation – Get testimonials and reviews of the contractor’s previous projects from clients to assess reputation and service.
Reasonable pricing – Compare quotes from at least 3 contractors. Opt for the most reasonable quote within project scope.
Good communication – Ensure the contractor provides detailed explanations about project scope, schedule, and cost estimates.
Skilled workers – The contractor should employ experienced builders, engineers, and site supervisors.
Safety-focused – They must comply with DOSH and OSHA procedures for safety of workers and the public.

By choosing a house contractor with these qualities, you can be assured your home construction project will be carried out excellently and safely. Take time to thoroughly screen and compare contractors before making a final decision.

2. How do I choose a qualified and the best house contractor?

Choosing the right house contractor is not an easy process, but it is very important to ensure your project runs smoothly. Here are some key guidelines in selecting the best and most qualified house contractor:

Do Your Research

Get referrals and testimonials from friends or resident association leaders.
Check directories of professional contractors such as REHDA.
Review contractors’ websites and portfolios.
Verify the contractors’ financial standing.
Ensure they possess valid licenses and insurance.

Compare and Evaluate Quotes

Obtain quotes from at least 3 different contractors.
Compare their rates, scope of work and schedule.
Opt for the most comprehensive quote at a reasonable price.
Be wary of quotes that are too low or too high.

Interview and Select Contractor

Interview your shortlisted contractor candidates.
Question them about their experience, portfolio and work methods.
Choose a contractor who can understand your project needs well.
Ensure you are comfortable with the contractor.

Conduct Background Checks

Verify the contractor’s records at the Companies Commission of Malaysia.
Obtain references from the contractor’s previous projects.
Ensure there are no adverse records or complaints.

Have a Contract Agreement

Complete a detailed and transparent construction contract.
Specify the scope of work, schedule, cost and terms.
Both parties must agree and sign the contract.

By following these guidelines, you can ensure the contractor you pick is the best, most experienced and fully qualified for your home construction project.

3. What is the estimated cost for a house contractor in Malaysia?

The cost for a house contractor in Malaysia depends on several factors such as:

Size and type of house
Location and construction material specifications
Scope of construction work

Generally, based on house sizes, the average contractor cost estimates are:

1 to 2 Storey Terrace House

Size: 600 – 1,000 sq ft
Price: RM80,000 – RM150,000

1 to 2 Storey Semi-Detached House

Size: 1,200 – 2,000 sq ft
Price: RM200,000 – RM350,000

1 to 2 Storey Bungalow

Size: 2,000 – 4,000 sq ft
Price: RM350,000 – RM750,000

3 to 5 Storey Condominium

Size: 1,200 – 2,500 sq ft
Price: RM350,000 – RM500,000

Other factors affecting cost:

Experienced contractors (10%-20% higher)
Imported and premium materials (20%-30% higher)
Complex house designs (10%-15% higher)
‘Turnkey’ construction (10%-15% higher)

Therefore, the average house contractor cost in Malaysia ranges from RM250,000 to RM500,000 depending on the above factors. It is prudent to obtain several contractor quotes for comparison.

4. How do I get a good quality contractor at a reasonable price?

Getting a good quality contractor at a reasonable price requires some effort and careful research. Here is a quick guide:

1. Do Extensive Comparison

Get quotes from at least 5 different contractors.
Compare their rates, experience, portfolio and reviews.
Don’t focus too much on price alone.

2. Consider Nearby Contractors

Look at contractors building projects near your area.
They may offer more competitive pricing and lower transportation costs.

3. Get Referrals From Friends and Family

Those who have engaged contractors before can provide useful insights.
Personal referrals are more reliable than advertisements.

4. Consider Smaller or Individual Contractors

Avoid big contractors who may impose high overheads.
Individual or new contractors often offer lower prices.

5. Negotiate on Price

Don’t be afraid to negotiate rates with your potential contractors.
Inform them you are comparing several quotes.

With proper planning and some effort, you will surely find a good quality contractor at the most reasonable price.

5. What are the risks of hiring an inexperienced but cheap contractor?

Although using an inexperienced, cheap contractor seems to save money, it can actually carry very big risks. The main risks are:

Low Quality Workmanship

Inexperienced contractors are prone to construction mistakes or using inferior materials. This affects the quality and lifespan of your home.

Technical Issues

They may not fully comprehend structural design and overlook critical technical details. This can lead to safety hazards.

Higher Corrective Costs

You may need to spend more to rectify and replace unsatisfactory work. This can exceed original cost savings.

Project Delays

Lack of experience can cause delays in work schedule. You have to bear additional costs due to the delays.

No Guarantees or Liabilities

Illegal contractors may not provide any guarantees or be accountable for their work. You are unprotected.

Stress and Conflicts

Prolonged errors and problems will lead to arguments and stress to you and your family.

Therefore, the risks of using inexperienced contractors are very high despite cheaper rates offered. It is better to choose an experienced contractor to ensure quality workmanship and long-term satisfaction.

6. How can I ensure the contractor finishes the project on time and within budget?

Ensuring contractors complete projects on schedule and within agreed budget is not easy but can be achieved with proper planning and project management. Here are some tips:

Set Realistic Schedule and Cost Estimates

Ensure the work schedule and cost estimates agreed are realistic with built-in error margins.
Avoid overly tight schedules or very low cost estimates.
Involve the contractor in determining project schedule to ensure it is achievable.

Have a Detailed Construction Contract

The written contract must clearly state completion dates, payment schedules, terms and conditions.
Include penalty clauses if contractor fails to meet agreed completion date or budget.
Both parties must agree and sign the contract.

Impose Late Fees If Necessary

Monitor project progress against the set schedule.
Give late notices to contractor if work falls behind and allow time to catch up.
If still failing to complete work on time, impose late fees according to agreed rates.

Staggered Stage Payments

Payments are made in stages according to project completion progress, not fully upfront.
Contractor needs to meet completion dates for each stage before payment is made.
This ensures contractor is committed to timely work completion.

Regular Site Meetings

Weekly or monthly meetings to monitor latest project status.
Adjust schedule if necessary to avoid delays.
Implement corrective steps if project goes off target.

By taking the above measures, your home construction project is highly likely to be completed successfully within agreed budget and schedule.

7. What protections should I take if the contractor fails to complete the project?

If the appointed contractor fails to complete the project according to the agreed schedule and specifications, several steps can be taken to protect your interests:

1. Principal Protection Insurance

This covers financial losses if the contractor fails to complete the project.
You can claim back the money from the insurance company.
Ensure to take up this insurance before project commencement.

2. Bank Letter of Credit

Requires the contractor to open a Letter of Credit with a bank.
Project payment monies will be frozen until the contractor completes the work.
Safeguards client from financial losses.

3. Performance Bond

Contractor needs to furnish a performance bond.
You are entitled to claim the bond money if contractor defaults.
Typically 5% to 10% of contract value.

4. Penalty Clauses in Contract

Include late delivery and indemnity clauses in contract.
Impose penalties on contractor for failing to complete work on time.
Mitigate your time and financial losses.

5. Legal Action

Bring defaulting contractor to court for indemnity claims.
Court process to compel contractor to pay indemnities.
Last resort if other steps are ineffective.

Therefore, ensure to take these precautionary steps before appointing a contractor to fully protect your interests.

8. Can I change the contractor if I’m unsatisfied with the project progress?

If you are dissatisfied with the performance and progress of work by your home construction project contractor, you are generally entitled to change to another contractor. However, this depends on the terms in the contract agreement:

1. Check contract termination terms

Read the contract clauses relating to termination of contractor’s services.
Most contracts allow termination with sufficient written notice.
Contractor must be given reasonable notice period, usually 30 days.

2. Discuss with existing contractor

Have a discussion with the contractor regarding issues that crop up.
Give them a chance to rectify within a stipulated timeline.
If no improvement, proceed with intention to change contractor.

3. Appoint the replacement contractor

Source for a suitable alternative contractor to take over project.
Discuss to provide details on project scope and schedule.
Formalize new contract agreement with the replacement contractor.

4. Clear project site

Ensure existing contractor cleans up project site before releasing it.
Hand over all plans, documents and project requirements to new contractor.

5. Inform local authorities

Notify change of contractor to local council for permit continuity.
Comply with any conditions imposed for change of contractor.

In summary, you can change contractors by following due process and abiding by the contract terms. This ensures the project continues smoothly by the replacement contractor.

9. Can I sue the contractor if the house construction does not conform to agreed specifications?

Yes, you have the right to sue the contractor in court if the house construction works do not conform to specifications agreed in the contract. Some steps to take:

1. Review the contract

Re-examine the scope of work, specifications, and terms in the signed contract.
Ensure the non-conforming specifications are clearly stated in the contract.

2. Issue written notice

Send official notice to the contractor listing all the non-compliances.
Provide timeline for the contractor to rectify the non-compliances.

3. Appoint independent surveyor

If contractor refuses to rectify, appoint a professional independent surveyor to investigate and submit report.
The report can be used as evidence in court later.

4. Seek legal advice

Obtain legal advice from a lawyer on rights and legal recourse against the contractor.
The legal advisor will assist with court claims.

5. File court claims

If necessary, file a civil suit in court to sue contractor for breach of contract.
Seek to recover rectification costs, damages, and interests from contractor.

6. Enforce court order

If court rules in your favor, contractor must comply with court order issued.
If failure to comply, can apply for enforcement of court order.

In summary, you have the right to take legal action if the contractor fails to execute the work according to specifications in the contract. This safeguards your interests as a client.

10. Can the contractor sue me if I unexpectedly postpone or cancel the house construction project?

Yes, the contractor has the right to sue you if you abruptly cancel or postpone the house construction project, subject to these scenarios:

1. No cancellation clause in contract

If the contract has no clause for cancellation, contractor can claim full damages.

2. Insufficient cancellation notice

If cancellation notice period is insufficient, contractor can claim losses and expenses incurred.

3. Contractor already made purchases

If contractor has already purchased construction materials, they can claim the costs.

4. Contractor already commenced work

If site work has begun, incurred expenses and lost profits can be claimed.

5. Loss of income

Contractor is entitled to claim loss of income and business opportunities.

6. Payment by work progress stage

Contractor deserves payment according to extent of work done.

7. Worker termination costs

Contractor may claim costs of terminating employee contracts.

8. No liability if force majeure

You are not liable if cancellation is due to force majeure like natural disasters.

Therefore, it is advisable to provide reasonable notice and negotiate with the contractor if you need to cancel or postpone the project. This avoids unwanted claims.

Key Takeaways:

Conduct extensive research and comparison before selecting a house contractor.
Ensure the contractor has strong experience, portfolio and qualifications.
Do not over-focus on cheap pricing without assessing contractor reputation and capabilities.
Agree on realistic schedule and cost estimates with the contractor.
Have a written contract agreement that protects both parties.
Monitor project progress closely and take prompt action if issues arise.
Protect your interests through comprehensive insurance and contract terms.
Consider legal advice if disputes with contractor arise.
With proper planning and prudent contractor selection, your dream home construction project can be realized successfully.

In summary:

Choosing the right contractor is crucial for smooth home construction. Assess experience, reputation, expertise.
Estimate costs realistically based on project scope and contractor rates. Get multiple quotes.
Have a detailed contract to protect interests. Impose penalties if contractor underperforms.
Monitor work progress closely. Change contractor if needed by following proper procedures.
Take precautions like insurance and bonds in case of contractor default or delays.
Can pursue legal options if contractor deviates from agreed specifications. But aim to resolve disputes amicably.
With due diligence in contractor selection and project management, your dream home can become a reality.

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