Home Improvement Contract Requirements, Details, and Sample Language

Hiring a contractor for a home improvement job? Your contract must contain certain items. Use our resources below and be sure you understand your rights as a homeowner.

Under the Home Improvement Contractor law, all contracts over $1,000 (One Thousand Dollars) must be in writing. However, homeowners and contractors should consider having a contract for every job, regardless of the price. 

Necessary Contract Language

The following items must be included in any contract between a homeowner and a registered home improvement contractor for home improvement work.

1. The complete agreement between the contractor and the owner and a clear description of any other documents which are part of the agreement.
2. The full names, federal I.D. number (if applicable), addresses (NOT P.O. Box numbers), of the parties, the contractor's registration number, the name(s) of the salesperson(s) involved, if any and the date the contract was executed by the parties. The contractor's registration number must be on the first page of the contract.
3. The start and completion dates of the project.
4. A detailed description of the work to be done and the materials to be used.
5. The total price of the work.
6. The payment schedule, with the dates and the amount of each payment stated in dollars, including any finance charges. Any deposit required to be paid in advance of the start of the work cannot exceed one-third of the total contract price or the actual cost of any material or equipment of a special order or custom made nature, which must be ordered in advance of the start of the work to assure that the project will proceed on schedule. Final payment cannot be demanded until the contract is completed to the satisfaction of all parties.
7. Signatures of all parties.
8. A clear and conspicuous notice stating:
   • That all home improvement contractors and subcontractors shall be registered and that any inquiries about a contractor or subcontractor relating to a registration should be directed to the Office of Consumer Affairs and Business Regulation Home Improvement Contractor Program, with the Office's address and phone number. 
   • A 3-day cancellation notice, informing you of your right to cancel your contract if you signed the agreement in your home, or at a place other than at the contractor's office or business;
   • All warranties on the owner's rights; 
   • A statement warning, in 10-point bold type or larger, directly above the space provided for the signature, the following: DO NOT SIGN THIS CONTRACT IF THERE ARE ANY BLANK SPACES.
   • Whether any lien or security interest is on the residence as a consequence of the contract.
9. An enumeration of such other matters upon which the owner and contractor may lawfully agree.
10. Any other provisions otherwise required by the applicable laws of the Commonwealth.
11. A clause informing the owner about:
    • any and all necessary construction-related permits
    • that the contractor must obtain such permits.
    • that owners who secure their own building permits or deal with unregistered contractors will not be eligible to access the Guaranty Fund.
12. Acceleration of payment: No contract can contain an acceleration clause that would require any part or all of the balance not yet due to be declared due and payable because the contractor deems himself to be insecure. 
13. A sentence explaining that no work can begin prior to the signing of the contract and the owner receiving a copy of the contract.

Chapter 142A does not require that an arbitration clause be included in the contract. However, if the contractor wishes to initiate arbitration, this provision must be in the contract, and must be clearly set out, and separately signed by both the homeowner and contractor. The following language is acceptable:  "The contractor and the homeowner hereby mutually agree in advance that in the event that the contractor has a dispute concerning this contract, the contractor may submit such dispute to a private arbitration service which has been approved by the Office of Consumer Affairs and Business Regulation and the consumer shall be required to submit to such arbitration. NOTE: The signatures of the parties above apply only to the agreement of the parties to alternate dispute resolution initiated by the contractor. The owner may initiate alternative dispute resolution even where this section is not signed separately by the parties.

Homeowners and contractors with questions about the Home Improvement Contractor program, should contact the Office. 

Massachusetts Home Improvement Contractor (HIC) Sample Contract

This form satisfies all basic requirements of the state's Home Improvement Contractor Law (MGL chapter 142A), but does not include standard language to protect homeowners.  Seek legal advice if necessary. Any person planning home improvements should first review the Homeowner's guide to hiring a home improvement contractor before agreeing to any work on your residence. 

Homeowner Information
Name:
Street Address (do not use PO Box):
City/Town:	State:	Zip:
Daytime Phone:	Evening Phone:
Mailing address (if different):

Contractor Information
Company Name:	Contractor/Salesperson/Owner Name:
Business Address (do not use PO Box):
City/Town:	State:	Zip:
Business Phone:	Employer ID or SS Number:
Mailing address (if different):
HIC Registration Number:
Registration Issue Date (month/day/year):	Registration Expiration Date (month/day/year):

The Contractor agrees to do the following work for the Homeowner:

Describe in detail the work to be completed, specifying the type, brand, and grade of materials to be used. 

[write or type project details]

Required Permits

The following building permits are required and will be secured by the contractor as the homeowner's agent:   

[list permits]

(Owners who secure their own permits will be excluded from the Guaranty Fund provisions of MGL chapter 142A.) 

Proposed Start and Completion Schedule

The following schedule will be adhered to unless circumstances beyond the contractor's control arise:

Date when contractor will begin contracted work (month/day/year):                      

Date when contracted work will be substantially completed (month/day/year):

Total Contract Price and Payment Schedule

The Contractor agrees to perform the work, furnish the material and labor specified above for the total sum of:  $* ____________
*Including all finance charges.

Payments will be made according to the following schedule:

Dollar Amount	Date	Condition
$	Upon signing contract	Not to exceed 1/3 of the total contract price or the cost of special-order items, whichever is greater.
$	(month/day/year)	Upon completion of (add description)
$	(month/day/year)	Upon completion of (add description)

The law forbids demanding full payment until contract is completed to both party’s satisfaction. 

The following material/equipment must be special ordered before the contracted work begins, to meet the completion schedule.**     

Dollar Amount	Description of Material/Equipment
$	To be paid for (ad details)
$	To be paid for (add details)

**By law, any deposit or down-payment required by the contractor before work begins may not exceed one-third of the total contract price or the actual cost of any necessary equipment or custom-made material that needs to be special-ordered in advance, to meet the completion schedule. 

Express Warranty

Is an express warranty being provided by the contractor?    Yes [ ]    No [ ] 
All terms of the warranty must be attached to the contract.

Subcontractors: The contractor agrees to be solely responsible for completion of the work described regardless of the actions of any third party/subcontractor utilized by the contractor. The contractor further agrees to be solely responsible for all payments to all subcontractors for materials and labor under this agreement.                                                      

Contract Acceptance: Upon signing, this document becomes a binding contract under law. Unless otherwise noted within this document, the contract shall not imply that any lien or other security interest has been placed on the residence. Review the following cautions and notices carefully before signing this contract.

You may cancel this agreement if it has been signed at a place other than the contractor's normal place of business, provided you notify the contractor in writing at his/her main office or branch office by ordinary mail posted, by telegram sent or by delivery, not later than midnight of the third business day following the signing of this agreement (see sample cancellation notice below).

Do not sign this contract if there are any blank spaces!
Two identical copies of the contract must be completed and signed. One copy is for the homeowner, the other for the contractor.

Homeowner’s signature:    
Date (month/day/year):   

Contractor’s signature:  
Date (month/day/year):    

Contractor Arbitration

The Home Improvement Contractor Law provides homeowners with the right to initiate an arbitration action (as an alternative to court action) if they have a dispute with a contractor.  The same right is not automatically afforded to a contractor, however.  The contractor would have to resolve any dispute he/she has with a homeowner in court unless both parties agree to the optional clause provided below.  This clause would give the contractor the same right to arbitration as is afforded to the homeowner by the Home Improvement Contractor Law.

The contractor and the homeowner hereby mutually agree in advance that in the event the contractor has a dispute concerning this contract, the contractor may submit the dispute to a private arbitration firm which has been approved by the Secretary of the Executive Office of Consumer Affairs and Business Regulation and the consumer shall be required to submit to such arbitration as provided In Massachusetts General Laws, chapter 142A. 

Homeowner’s signature: 
Date (month/day/year):                                                                                                                        

Contractor’s signature:                                                                 
Date (month/day/year):                                                              

NOTICE: The signatures of the parties above apply only to the agreement of the parties to alternative dispute resolution initiated by the contractor. The homeowner may initiate alternative dispute resolution even where this section is not separately signed by the parties.

Notice of Cancellation Sample Language

You may cancel this transaction, without penalty or obligation, within three business days from the above date.

If you cancel, any property traded in, any payments made by you under this contract or sale, and any negotiable instruments executed by you will be returned within ten business days following the receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be cancelled.  

If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller’s expense and risk.

If you do make the goods available to the seller and the seller does not pick them up within twenty days of the date of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available.

To the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligation under the contract.

To cancel this transaction, mail, or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram to [name of seller], at [address of seller’s place of business] not later than midnight of ___________ (date).

I hereby cancel this transaction.

Buyer’s signature:                                                                                Date:                                       

Homeowner’s Rights and Responsibilities

A homeowner's rights under the Home Improvement Contractor Law (MGL chapter 142A) and other consumer protection laws (i.e. MGL chapter 93A) may not be waived in any way, even by agreement.

However, homeowners may be excluded from certain rights if the contractor they choose is not properly registered as prescribed by law.

• Homeowners who secure their own building permits are automatically excluded from all Guaranty Fund provisions of the Home Improvement Contractor Law.
• The contractor is responsible for completing the work as described, in a timely and workmanlike manner.
• Homeowners may be entitled to other specific legal rights if the contractor guarantees or provides an express warranty for workmanship or materials.
• In addition to guarantees or warranties provided by the contractor, all goods sold in Massachusetts carry an implied warranty of merchantability and fitness for a particular purpose.
• An enumeration of other matters on which the homeowner and contractor lawfully agree may be added to the terms of the contract as long as they do not restrict a homeowner’s basic consumer rights.

Execution of Contract

The contract must be executed in duplicate and should not be signed until a copy of all exhibits and referenced documents have been attached.

• Parties are also advised not to sign the document until all blank sections have been filled in or marked as void, deleted, or not applicable.
• One original signed copy of the contract with attachments is to be given to the owner and the other kept by the contractor. Any modification to the original contract must be in writing and agreed to by both parties.
• Contracted work may not begin until both parties have received a fully executed copy of the contract, and the three-day recission period has expired.
• Don't be pressured into signing the contract. Take time to read and fully understand it. Ask questions if something is unclear.
• Make sure the contractor has a valid Home Improvement Contractor Registration. The law requires most home improvement contractors and subcontractors to be registered with the Home Improvement Contractor Program. If you have questions, call 617-973-8787 or 888-283-3757.
• Ask the Contractor for his insurance company information so that you can confirm coverage, or ask to see a copy of a proof of insurance document.

Accelerated Payments

A contractor may not demand payments in advance of the dates specified on the payment schedule in cases where the homeowner deems him/herself to be financially insecure.  However, in instances where a contractor deems him/herself to be financially insecure, the contractor may require that the balance of funds not yet due be placed in a joint escrow account as a prerequisite to continuing the contracted work. Withdrawal of funds from said account would require the signatures of both parties.

We’re here to help.

If you have questions about the Home Improvement Contractor Law or other consumer rights, or want to check a contractor’s registration, contact our Consumer Hotline: [phone] or [phone] (toll-free), Monday-Friday, 9:00 a.m. to 4:30 p.m.

For assistance with informal mediation of disputes or to register formal complaints against a business: 

File a complaint with the Office of the Attorney General or call [phone].

Contact the Better Business Bureau:
[phone]
[phone]
[phone]