For Immediate Release - September 30, 2004

Director Lindstrom Launches Home Improvement Contractor Awareness Campaign

Highlights the Steps Consumers Must Take to Avoid Victimization and Qualify for State Protections

Massachusetts Consumer Affairs Director Beth Lindstrom today called on homeowners to take specific precautions and make better use of available resources before hiring a home improvement contractor in order to avoid the pitfalls of shoddy workmanship and potential fraud.

Priority number one is to make sure the contractor chosen for a job is actively registered with the state. "If consumers choose an unregistered contractor and experience difficulties, they are not eligible for our arbitration process and don't have access to reimbursement under the state's guaranty fund. It is absolutely critical that they verify registration status before signing a contract," said Director Lindstrom.

To communicate this and other important considerations consumers need to be aware of during the contractor hiring process, the Office of Consumer Affairs has distributed a public service announcement for air on Massachusetts broadcast television stations and cable TV systems and delivered home improvement informational posters to key venues in cities and towns throughout the state.

"Referrals from friends or neighbors who've had quality work done are great, but consumers still must get a written contract to retain the protections our office affords," Director Lindstrom emphasized.

To minimize the risk of problematic home improvements, the Office of Consumer Affairs urges consumers to take the following steps:

1. Research at least three contractor candidates.

  • Referrals are helpful, but always first make sure a contractor is actively registered with the state. Go to www.mass.gov/homeimprovement to verify this.
  • Request and obtain a detailed, written estimate from contractor candidates before signing a contract.
  • Ask for and check references. Find out if a candidate has a complaint or judgment history. There are several resources to do this:
    • The Board of Building Regulations & Standards ("BBRS"), 617-727-3200, Option 4.
    • The Better Business Bureau (if the contractor is a member), 508-652-4800
    • The Office of the Attorney General, 617-727-8400
    • The Office of Consumer Affairs (to check judgment history), 888-283-3757

2. What the Contract Should Include.

  • A detailed contract should include the contractor's registration number, a street address ( not a P.O. Box), dates work is to begin and be substantially completed, the total amount agreed to be paid and a payment schedule, a list of specifications and materials to be used, provisions for changes or "extras" and a copy of the contractor's insurance coverage.
  • State law requires contracts over $1,000 to be in writing, but Consumer Affairs recommends a contract for any amount. If a contractor will not agree to a written contract for a job priced at $1,000 or more, consumers should re-consider hiring the contractor.

3. Other Very Important Points.

  • State law prohibits contractors from collecting more than 1/3 of the total cost upfront, unless special materials must be ordered.
  • If a building permit is required for the work, make sure the contractor obtains it. If a consumer obtains the permit, they may not be eligible for compensation from the guaranty fund.

4. Disputes or Problems? Consumers' Options & Rights.

  • Arbitration: Consumer Affairs administers an arbitration program that is a cost-effective way to resolve disputes between homeowners and registered contractors. A professional, neutral arbitrator will hear the case and issue a legally binding decision, which may allow consumers to recoup some or all of their money from a contractor. An arbitration application must be filed within two years of the contract date.
  • Guaranty Fund: If a consumer wins a case in arbitration or in court and the contractor files for bankruptcy or fails to pay, the consumer can apply for relief from the guaranty fund for up to $10,000 of the actual losses. To access the fund, a consumer must prove that a reasonable legal effort has been made to collect the award or court judgment payment. A guaranty fund application must be filed within six months of the court or arbitration judgment.

To qualify for Arbitration and the Guaranty Fund, a homeowner must have a written contract with a registered contractor for home improvements to a pre-existing, owner-occupied, primary residence with no more than 4 units.

Consumers are encouraged to understand their rights and options under the Home Improvement Contractor Law (M.G.L. c. 142A) by consulting the information provided on the Office of Consumer Affairs website at www.mass.gov/homeimprovement or calling our Hotline staff at (888) 283-3757.