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Planning for a remodeling or construction project requires great attention to detail and follow through by both consumers and contracted businesses.  In Massachusetts, the Office of Consumer Affairs and Business Regulation (OCABR) registers qualified home improvement contractors and offers certain protections for eligible homeowners and contractors.  Over 31,000 individuals are currently registered by OCABR as a contractor or sub-contractor able to perform residential work on existing one-to-four unit owner occupied residential properties in the Commonwealth.

The Home Improvement Contractor (HIC) programs include registration, complaint and enforcement, arbitration, and a Guaranty Fund of last resort.

Read the below for more details about home improvement contracting and what to do as a consumer in the hiring process:

Basic Overview of the HIC Programs:

The HIC Law (M.G.L c. 142A), was established in 1992 to regulate contractors and protect consumers from bad business practices while undergoing specific home improvement projects. OCABR requires all contractors, partnerships, and corporations that solicit, bid on, or perform residential contracting as a contractor or subcontractor on an existing one-to-four-unit owner occupied residential property in Massachusetts to register as a home improvement contractor.

In order to be protected under the HIC law, individuals must first have a signed contract for certain construction work amounting to $1,000 or more on a homeowner’s primary residence in Massachusetts that does not exceed more than four units.  Those basic guidelines are the first steps to being eligible for additional protections such as complaint and enforcement, arbitration to resolve disputes, and access to the guarantee fund for qualifying consumers that have unpaid final judgments against a contractor to recover up to $10,000.  While the aforementioned criteria is necessary, the most important part of protection starts with hiring a contractor with the proper registration and licenses required for the job.

Why Hire a Registered Home Improvement Contractor?

Contractors registered by OCABR must follow certain requirements regarding contracts, payments, advertising, and business practices.  These requirements mandate standards throughout the industry and offer protections for homeowners.

If you hire an unregistered contractor, you will not be eligible to apply for HIC arbitration or the Guaranty Fund.  You may file a complaint against an unregistered contractor that could result in disciplinary action being taken after an enforcement hearing.  However, you will not receive monetary compensation for any issues encountered with an unregistered contractor.  Make sure to verify you contractor’s registration before signing a contract for home improvements.

Steps to Take Before Starting a Home Improvement Project:

Embarking on a home improvement project takes time, these steps will help you get started:

1. Come up with specific designs and consult an architect or designer to assist you with a detailed work plan and budget.
2. Decide on the materials you want to use. You can visit home improvement centers, read magazines, or consult others who have completed similar projects to get ideas.
3. Outline the plans you want in a specification sheet or floor plan so potential contractors can draft quotes meeting your expectations.
4. Contact a professional building industry association on the home improvement process and how to choose/hire a contractor.

Steps to Take Before Hiring a Contractor:

You work hard for your money and selecting the right person for a job on your home is a major decision.  These steps and best practices can help walk you through the process of hiring a contractor:

1. Consult with at least three contractors on your project and request written, detailed estimates from each.
2. Verify that the contractor is registered, and if applicable, that they have a Construction Supervisor License (CSL). You can search for the contractor’s registration status on OCABR’s public database. There you can take note of any previous complaints, as well as their history with HIC arbitration and the Guaranty Fund. Keep in mind that contractors must display their HIC number on advertisements, contracts, and permits.
3. Gather references from the contractor’s recent projects. When checking references consider inquiring about the work and services provided and their satisfaction of the final product.
4. Ensure that the contractor has adequate liability insurance and workers compensation insurance if necessary.
5. Check in with OCABR, the Office of Public Safety and Inspections (if they have a CSL), and the Better Business Bureau to find out if there are any prior complaints or disciplinary actions taken against the contractor or business you wish to hire.

Steps to Take Before Signing a Contract:

Before signing a contract, ensure that the document is detailed and covers the budget breakdown, project timeframe, and payment dates. Next you should verify that the contractor has pulled the required building permits, and that the permits are posted on the job site until the work is complete.  It is the contractor’s responsibility to obtain necessary permits.  If a homeowner pulls permits on behalf of a contractor, you are forfeiting your rights to access the Guaranty Fund.

Read the fine print of the contract presented and consider comparing it against a sample contract document posted on OCABR’s website.

Understanding a Home Improvement Contract:

Under the HIC law, all projects $1,000 or over are required to have a written contract which protects all parties and acts as an agreed upon understanding between the contractor and homeowner regarding scope of the work. It is recommended that smaller projects are also done under a written contract even though it is not a requirement.

The contract is a complete agreement between both parties. A standard contract agreement must include:

• Detailed description of the work to be done and materials used;
• Full name and registration number of the contractor;
• Project start and completion dates; and
• Payment schedule.

Contracts should also include a clear notice stating that all contractors and sub-contractors must be registered with OCABR.  In addition, the contract should note the homeowner’s right to cancel a contract within three days of execution.  Also look for a contract clause ensuring that all necessary permits will be secured by the contractor.

It is worth noting that acceleration of payment clauses is not allowed, and a contractor cannot request more than one-third of the total cost of the project up front, unless special materials are needed.

If you do not see these necessary items, or if something on the contract doesn’t seem right, ask for clarification before signing. You may find a sample document and more details about contract requirements on OCABR’s website.

What to do if Something Goes Wrong?

Sometimes projects do not turn out how you envisioned.  If you are unhappy with the work that was done, feel that the contractor has not abided by the contract guidelines, or has violated any of the provisions within the HIC Law, you should first try to resolve the issues with the contractor.

If you are not able to come to an agreement, there are options available to you to help resolve a dispute such as mediation or arbitration.

• Mediation helps both parties come to a mutual agreement with the assistance of a facilitator. This is a voluntary step that requires both the homeowner’s and contractor’s consent. Mediation is possible through your local consumer group which is associated with the Attorney General’s Office.
• Arbitration assists in resolving disputes and determines if the eligible homeowner (or eligible contractor) will receive monetary compensation. This process is administered through OCABR and conducted by a neutral third-party arbitrator. The arbitrator hears both sides and determines any final compensation. In order to qualify for arbitration, you must meet several eligibility criteria outlined on our website.

For more information about the HIC program visit our website: www.mass.gov/info-details/home-improvement-contractor-hic-program.  An OCABR Consumer Specialist is available to assist homeowners and contractors with questions about registration, arbitration, and the Guaranty Fund.  Call the OCABR Consumer Hotline at 617-973-8787, Monday through Friday between the hours of 9:00am and 4:30pm.