Massachusetts has a very comprehensive home improvement contractor's statute known as the Home Improvement Contractor Statute, G.L.c.142A. The purpose of this statute is to closely regulate the home improvement construction industry so as to ensure that consumers in this jurisdiction are protected from incompetent and fraudulent contractors. Massachusetts General Laws, c.142A imposes very strict liability upon contractors that fail to comply with the various terms and provisions of the statute. If you are in the business of providing home improvement services you should pay close attention to this article to make sure that you are in full compliance with the law. In this area of the law, and despite your best intentions, a "handshake" agreement is not an adequate substitute for complying with the rigorous requirements of this statute.
A. Who is and who is not covered by G.L.c.142A.
If your company is being hired to exclusively provide the following services to a homeowner in the areas of fencing, landscaping, hardscaping, above-ground swimming pools, as opposed to in-ground swimming pools, driveway installation, hardwood floors or carpeting, and interior painting services you are not subject to the reach of the statute. On the other hand, if your company provides services in the areas of in-ground pools, masonry as it relates to buildings or foundations, carpentry as it relates to the structure of a home including decking and trim, demolition of any structure related to remodeling, exterior painting, installations or constructions of sheds, and exterior stair installation then your home improvement services are covered under G.L.c.142A.
B. For those construction services that fall under the guise of G.L.c.142A and if your contract is in excess of $1,000.00 your contracts must, and without exception, contain the following information:
1. The complete agreement between the owner and the contractor. 2. The full names, social security numbers, physical address, and registration number of the contractor. 3. The names of any salesperson who has involved in the negotiation of the contract. 4.The date the contract was executed. 5. Date of anticipated substantial completion. 6. A detailed description of the work to be completed under the contract. 7.The total amount to be paid for work. 8. A precise schedule of payments to be made under the contract and the actual amount to be paid stated in dollars. 9. The signatures of all parties to the contract must be on the contract. 10. HIC registration number of the contractor. 11. A description of all work permits needed. This is solely and exclusively the province of the home improvement contractor and not something the homeowner is legally obligated to do. This responsibility passes to the home improvement contractor under the statute. 12. Specific notice to the homeowner that if the homeowner pulls any permits that the homeowner is ineligible for reimbursement from the Guaranty Fund provisions in the event of a dispute with the contractor. 13. To ensure that that all payments made by a consumer are credited and 14. Demanding or receiving payment that is not in keeping with the timetable for receiving payment under the contract.
C. Apart from the items listed above, there are other things to watch out for under G.L.c.142A and they are as follows:
1. By doing business under a name that is different than the entity that is on the home improvement contract. 2. Any violation of any of the terms of any of the Commonwealth building codes. 3. By publishing any information regarding your business such as advertising that otherwise contains false or dishonest information about your business. 4. By publishing any information about your home improvement business without your HIC number listed. 5. By abandoning the project without justification and 6. Last, but not least, making any kind of false promises or representations designed to induce the consumer to hire your business to do home improvement construction work.
D. If I violate G.L.c.142A what penalties might I be subject to?
You run the risk of being subject to a range of liability including multiple damages. If you are a registered HIC contractor, you can be exposed to multiple sanctions in the form of criminal, administrative, and civil penalties involving the assessment of multiple damages under G.L.c.93A. These penalties range from suspension of a home improvement contractor's license and registration to punishment of up to $5,000.00 or imprisonment in jail or house of correction for not more than two years for a contractor who "knowingly, willfully or negligently" operates his contracting business without obtaining a certificate of registration. It must be stated that it is the rare instance that a home improvement contractor actually gets imprisoned for violating the statute. However, the fact that criminal penalties are in the statute suggests that the Commonwealth is very serious about any infractions of this law.
The more common problem for contractors who violate the statute is landing in the quicksand of G.L.c.93A, sections 2 and 9. Chapter 93A is the infamous "Massachusetts Consumer Protection Act" which imposes double or treble damages against a party if it is found that a party has committed an "unfair or deceptive act" that has occurred within the course of trade or commerce. What makes G.L.c.93A so problematic for home improvement contractors is the fact that any violation of G.L.c.142A by a contractor is considered "per se" unfair or deceptive and thus an automatic violation of G.L.c.93A, sections 2 and 9. Any breach of G.L.c142A can potentially expose a contractor to multiple damages and the payment of all reasonable attorney's fees.
Talk to us if you need guidance in this area. We have been practicing construction law for 37 years and we can help you stay the course and avoid liability as a home improvement contractor. Please feel free to call us at the Katz Law Group at 508-480-8202 for further information. We have extended our hours for the foreseeable future from 8 a.m. to 8 p.m. in order to better assist our clients during this very difficult time.