In Massachusetts, the home improvement contractor industry is highly regulated. Chapter 142A of the Massachusetts General Laws imposes many requirements and restrictions on home improvement contractors operating in Massachusetts. Among these, are the requirement that home improvement contractors be registered with the Office of Consumer Affairs and Business Regulations, that all home improvement contracts be in writing and include specific mandatory provisions, and that all home improvement contractors contribution to a guarantee fund which is designed to reimburse homeowners who have been harmed by the actions of their home improvement contractor and are unable to recover damages directly from the contactor. Home improvement contractors who fail to comply with these regulations do so that at their own peril as the penalties for non-compliance can be severe.
We are well-versed in the laws and regulations that apply to home improvement contractors in the Commonwealth. Whether you are just starting out in your business and want to ensure you comply with the laws, or need representation to defend yourself in a home improvement contract dispute, we have the knowledge, expertise and experience to represent you efficiently, effectively and economically.
Home Contractor Registration Requirement
All contractors and subcontractors that perform residential contracting services in Massachusetts must be registered with the Office of Consumer Affairs and Business Regulation. The term â€œHome Improvement Contractorâ€ refers to any person who owns or operates a contracting business and, through himself or others, undertakes, offers to undertake or submits a bid for residential contracting work on a project in excess of $1,000.00. This definition applies to a wide range of work including, siding installation, flooring installation, exterior painting, roofing, carpentry, demolition, insulation, masonry, plastering, sheetrock, window replacement, and in-ground pool installation, among others. The registration requirement excludes trades that have independent licensure requirements such as plumbers, electricians and architects.
Contracts Required to be in Writing
All home improvement contracts in excess of $1,000 must be in writing and must contain the following information:
- The complete agreement between the owner and contractor and a clear description of any other documents which are to be incorporated into the contract;
- The full name, address, and registration number of the contractor and the date the contract was executed;
- The date on which the work under the contract is scheduled to begin and the date on which the work is scheduled to be substantially completed;
- A detailed description of the work to be done and the materials used in performance of the contract.
- The total amount agreed to be paid for the work under the contract;
- A schedule of payments to be made under the contract and the amount of each payment, including any finance charges.
- Any deposit required to be made under the contract;
- The signatures of all parties to the contract;
- A clear notice: (1) that the contractor is required to be registered with the OCABR; (2) that the owner has a three-day cancellation right; (3) of all warranties and the owners rights under the contract and (4) in bold type directly above the signature space â€œDo not sign this contract if there are any blank spaces.â€
Additionally, the contract must inform the homeowner of any necessary permits, the contractorâ€™s obligation to obtain such permits and that homeowners who opt to obtain their own permits are excluded form the guaranty fund established under section 5 of M.G.L. c. 142.
The Massachusetts Home Improvement Contractor Regulations prohibit a number of acts including:
- Operating without a certificate of registration;
- Abandoning or failing to perform any project without justification;
- Deviating from, or disregarding plans or specifications, in any material way, without the consent of the owner, other than changes required by building regulations;
- Making any material representation in the procurement of a contract or making any false promise likely to influence, persuade or induce a contract;
- Misrepresenting a material fact in an application to obtain a certificate of registration;
- Failing to pay for labor or material where the contractor has received sufficient payment for the services rendered or materials purchased;
- Demanding or receiving a deposit in excess of one-third of the total contract price or the actual costs of special ordered or custom made materials; and
- Demanding final payment prior to the satisfactory completion of the contract.
Violation of any conduct prohibited under the Home Improvement Contractor Regulations is a per se violation of the Massachusetts Consumer Protection Act (M.G.L. c. 93A). If a Home Improvement Contractors is found to liable for any of conduct described above, they can be held liable for up to treble damages and be required to pay the homeownerâ€™s attorneyâ€™s fees and expenses. Home Improvement Contractors can also be subject to fines, suspension or revocation of their registration certificate and even possibly imprisonment for egregious or repeated violations.
Home Improvement Contractor Disputes and Litigation
For the most part homeowners and contractors begin their relationship with the best of intentions: the homeowner intends to pay for the timely completion of the project they have agreed to and the contractor intends to satisfactorily complete the project in a timely fashion and be paid as and when agreed. Unfortunately, not all home improvement contracts work out that way.
For any number of reasons a homeowner may become dissatisfied at some stage during the home improvement contract and may refuse to pay. Likewise, a homeowner may become unable able or unwilling to pay and the contractor will refuse to continue working with out payment When disputes arise in home improvement contracts, legal action is often soon to follow. In many cases, following a dispute a home improvement contract will receive a demand letter pursuant to the Massachusetts Consumer Protection Act (â€œChapter 93Aâ€), alleging â€œunfair and deceptive acts or practicesâ€ and demanding payment for alleged damages.
A Chapter 93A demand letter should never be ignored, even if you believe you did nothing wrong, or that the homeowner is rightfully to blame for the problems with the project. The Massachusetts Home Improvement Contractor Regulations enumerates several actions which are by definition â€œunfair and deceptiveâ€ actions within the meaning of Chapter 93A. Among these are: operating without a certificate of registration; failing to pay for labor or material where the contractor has received sufficient payment for the services rendered or materials purchased and demanding final payment prior to the satisfactory completion of the contract.
If you fail to respond to a Chapter 93A letter with a reasonable settlement offer within 30 days, and are later found liable in a lawsuit or arbitration, you will be assessed at least two times and up to three times the amount of damages. Further, you will be responsible for paying the homeownerâ€™s attorneyâ€™s fees. So, a well-crafted response to a Chapter 93A demand letter can often lead to a swift resolution of a dispute and avoid unnecessary and costly litigation down the road. Even if a dispute cannot be resolved without legal action, a well-reasoned response to the 93A letter can mitigate the amount of damages you may be assessed. If you receive a Chapter 93A demand letter in a home contractor dispute, feel free to contact us.