How Much Deposit Is Safe to Pay

The numbers

Twenty per cent of the contract value is the widely accepted ceiling for an initial deposit in Singapore, and it is what CaseTrust-accredited interior design firms are expected to work within. Some guidance is stricter and treats fifteen per cent as the target with twenty as the absolute limit.

A request for forty or fifty per cent before work begins is a red flag rather than a negotiating position. It is not how this trade normally operates, and the reason it is asked for is almost never a reason that benefits you.

Everything after the deposit should be tied to work, not dates

The consistent advice from consumer bodies is to avoid large prepayments and to pay progressively as each stage is completed. The convention here does exactly that: ten per cent deposit, forty after hacking and masonry, forty on carpentry, ten on handover.

What makes that safe is not the percentages, it is that each one is tied to a trade being finished. You can stand in the flat and see whether the masonry is done. You cannot see whether it is the midpoint, and a schedule running on dates quietly moves the risk onto you.

Accreditation, and the part of it that actually protects money

CaseTrust is the Consumers Association of Singapore accreditation scheme, and for renovation businesses it carries a requirement worth understanding: accredited firms must protect consumer prepayments with a deposit performance bond.

That bond safeguards your deposit specifically against the firm closing, being wound up or going into liquidation before your renovation is finished, which is the failure a deposit is genuinely exposed to. Homeowners pay nothing for it.

Accredited firms are also required to use the CaseTrust Standard Renovation Contract and to hold a documented procedure for handling variation orders, which is the other place renovation money commonly disappears.

• —Deposit performance bond protecting prepayments, at no cost to you
• —The CaseTrust Standard Renovation Contract rather than one written by the firm
• —A documented variation order procedure, as an accreditation condition

What to check before you transfer anything

Most of this costs one conversation and is very hard to do afterwards.

• —The quotation is itemised, with quantities and units on every line
• —It states what is excluded, not only what is included
• —The payment stages are written down and tied to trades
• —The deposit is within twenty per cent, and you know what it is for
• —The company name on the quotation matches the account you are paying into
• —If the firm claims accreditation, you have checked the register rather than the logo

Pay the company, not a person

The account you transfer to should be in the name of the business on the quotation. A payment into a personal account is the single hardest thing to unwind if something goes wrong, and it is a common feature of the cases that end badly.

If there is a reason it has to be a personal account, that reason is worth hearing before you pay rather than after.

This is general information, not legal or financial advice

Accreditation requirements and industry practice change, and what protects you in a specific dispute depends on the specific documents. The Competition and Consumer Commission of Singapore has published guidance on fair trading practices for this industry, and CASE is the place to check accreditation. For a live dispute, take it to them or to a lawyer rather than to a renovation blog.