If you win your case in arbitration or in court and the contractor fails to pay the award or judgment, you can apply to the Home Improvement Contractor Guaranty Fund for up to $10,000 of your actual losses. The Guaranty Fund was created as a fund of last resort for consumers who have an unpaid final judgment against a contractor. The Guaranty Fund is funded by a one-time fee that contractors are required to pay at the time of registration.

After a consumer is paid from the Guaranty Fund, the responsible registered contractor is obligated to reimburse the Fund with interest within 30 days. Failure to repay the Fund may result in administrative fines, revocation of the contractor's registration, and in extreme cases, criminal prosecution.

To apply to the Fund, a homeowner must file a claim application within six months of the court judgment date or arbitration award. Homeowners must also demonstrate that all reasonable efforts to collect the judgment have been exhausted, as defined by state regulations (201 CMR 14.00). Although it may take longer than six months to obtain satisfactory evidence of "reasonable legal efforts" to collect the award, the application to the Fund must be submitted within six months of the initial judgment or award, and it will be held for review until the evidence is provided.

To qualify for payment from the Fund, you must be able to prove that:

· There was a contract for the job.
· The contractor was registered with the Office of Consumer Affairs at the time of the contract.
· The contractor - not the homeowner - secured the building permit (with some exceptions).
· The contract was for work on a pre-existing 1-4 family residence in Massachusetts that is the owner's primary residence.
· A court judgment or arbitration award in the homeowner's favor has been issued, and all "reasonable efforts to collect" the judgment or award have been exhausted.
· A Fund application was filed within six months of the arbitration award or court judgment

For more information about the Guaranty Fund, or to apply, see the following links:

· Actual Loss Calculation Form
· Guaranty Fund Filing Instructions
· Guaranty Fund Application pdf format of aphic.PDF