Home improvement contractors in Massachusetts have a state law to navigate in their regular course of business. Not complying with this state law can lead to serious penalties. 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 this statute.
Massachusetts' Home Improvement Contractor Statute
Contractors across Massachusetts need to be aware of the state statute known as the Home Improvement Contractor Statute, found at Massachusetts General Laws Chapter 142A.
The purpose of this statute is to closely regulate the home improvement construction industry to ensure that homeowners are protected from incompetent and fraudulent contractors. M. G. L. c. 142A imposes very strict liability upon contractors who fail to comply with the various terms and provisions of the statute.
Some of the most stringent requirements of the Home Improvement Contractor Statute have to do with the contracts that home improvement professionals sign with the homeowners that hire them. A "handshake" agreement is not an adequate substitute for complying with the rigorous requirements of this statute.
Who is Covered by M. G. L. c. 142A?
Massachusetts' Home Improvement Contractor Statute only applies to contractors who are providing the following services on residential homes:
- Structural carpentry, including decking and trim,
- Hardwood flooring or carpeting,
- Masonry on a building or its foundation,
- Demolition of any structure in the course of remodeling,
- Painting, both interior and exterior,
- Driveway installation,
- Exterior painting,
- Installing or building sheds,
- Installing exterior stairs, or
- In-ground pool installation.
The following contracting services, however, are not regulated by M. G. L. c. 142A:
- Yardscaping or mowing, or
- Installing above-ground swimming pools.
What are the Contract Requirements Under the Statute?
Home improvement projects that fall under the guise of M. G. L. c. 142A and are over $1,000 must comply with the statute's contractual requirements. These requirements are extensive, and there are no exceptions.
- Constitute the complete agreement between the owner and the contractor,
- Include the full names, social security numbers, physical address, and registration number of the contractor, as well as the names of any salesperson who has involved in the negotiation of the contract,
- Mention the date the contract was executed,
- Set the date that work is scheduled to begin and the date of anticipated substantial completion,
- Include a detailed description of the work to be completed under the contract, as well as the materials to be used,
- State the total amount to be paid for the work,
- Set a precise schedule of payments to be made under the contract and the actual amount to be paid, stated in dollars, including any finance charges,
- Include the signatures of all parties to the contract,
- State the HIC registration number of the contractor and a notice of the homeowner's legal rights,
- Describe all work permits needed for the work. 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,
- Notify the homeowner that, if the homeowner pulls any permits, then the homeowner is ineligible for reimbursement from the Guaranty Fund provisions in the event of a dispute with the contractor,
- Promise that that all payments made by a consumer are credited, and
- Keeps the contractor from demanding or receiving accelerated payments that are not in keeping with the timetable for receiving payment under the contract.
This means that “handshake” agreements or oral contracts are not sufficient for projects over a thousand dollars.
Other Pitfalls Under the Home Improvement Statute
Apart from the contractual requirements listed above, there are some other things that contractors should watch out for in order to comply with M. G. L. c. 142A:
- Doing business under a name that is different than the entity that is on the home improvement contract,
- Violating any of the terms of a Commonwealth building code,
- Publishing any information regarding your business, including in its advertisements, that contains false or dishonest information about your business,
- Publishing any information about your home improvement business without your HIC number listed,
- Abandoning an improvement project without justification, and
- 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.
What are the Penalties for Violating the Statute?
If you are a registered HIC contractor, you can be exposed to multiple different sanctions in the form of criminal, administrative, and civil penalties involving the assessment of multiple damages under Massachusetts' unfair trade practice law, M. G. L. c. 93A.
These penalties range from suspension of a home improvement contractor's license and registration to a fine of up to $5,000 and up to two years in jail for a contractor who "knowingly, willfully or negligently" operates his contracting business without obtaining a certificate of registration. While it is rare that a contractor actually gets imprisoned for violating the statute, the fact that criminal penalties are a possibility shows that Massachusetts 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 M. G. L. c. 93A, section 2 and section 9. Chapter 93A is the infamous "Massachusetts Consumer Protection Act," which imposes double or treble damages against a party if it is found that they have committed an "unfair or deceptive act" in the course of business.
What makes Chapter 93A so problematic for home improvement contractors is the fact that any violation of M. G. L. c. 142A by a contractor is considered "per se" unfair or deceptive. This means that it is an automatic violation of Chapter 93A, §§ 2 and 9. Any breach of M. G. L. c. 142A can potentially expose a contractor to multiple damages and the payment of all reasonable attorney's fees.
Massachusetts Construction Litigation Lawyers at the Katz Law Group
Talk to us if you need guidance in this area. We have been practicing construction law for over 35 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 or contact us online. We represent clients in Worcester, Marlborough, Framingham, and the rest of Massachusetts.