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Check your eligibility to apply to the Home Improvement Contractor Guaranty Fund

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.


Determine if you qualify for the Guaranty Fund

To qualify for payment from the Guaranty 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 and Business Regulation at the time the contract was signed
  • The contractor - not the homeowner - secured the building permit 
  • The contract was for work on a pre-existing 1-4 family residence in Massachusetts that is the owner's primary residence
  • You filed for arbitration within two years of the data of the contract and satisfied the eligibility requirements for arbitration
  • 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

Additional Resources for

Calculate your actual losses

Your actual losses may be different than the monetary arbitration award or court judgment issued to you. Actual loss is measured by one of the following calculations. Use the appropriate formula to determine the amount of your actual loss.

  1. Calculation if no work is performed: If the contractor abandoned the contract without doing any work, the actual loss is the amount your paid to the contractor under the terms of the contract.
  2. Calculation when some of the work Is performed: If the contractor partially and properly completed some of the work which was agreed to under the terms of the contract, the actual loss shall be totaled by adding the amount of the reasonable cost of completing the contract and, if necessary, repairing the contractor's defective performance, and by subtracting the part of the contract price that has not been paid by the owner.
  • Step 1: Amount of the Contract $

                      Subtract (-)

                      Amount Paid to the Contractor $ 

                      Total = Unpaid Total of Contract

  • Step 2: Amount to Repair or Complete the Work $ 

                      Subtract (-)

                      Unpaid total of Contract $ 

                      Total = This is your actual loss.


Note: If the arbitrator or OCABR determines that the contractor grossly underbid the contract and that competent workmanship necessary to finish the contract will cost significantly more than the original contract price, the actual loss will not include the owner's cost to complete the contract. Upon such a determination, the actual loss shall be the amount which the owner paid to the contractor, minus the value of any work properly completed, minus the cost of any materials properly used, plus, if necessary, the cost to correct that portion of the contracted work that was improperly completed.

  • Step 1: Amount Paid (materials properly used, plus, if necessary, the cost to correct that portion of the contracted work that was improperly completed.

                      Amount Paid to the Contractor$ 

                     Subtract (-)

                     Value of Properly Completed Work $ 

                     Subtract (-)

                     Cost of Materials Properly Used

                     Add (+)

                     Cost to Correct Improper Work

                     Total =$ This is your actual loss.


3. Calculation when all of the work Is performed, but performed incorrectly: If the contractor finished the job but improperly completed work that was agreed to under the terms of the contract, the actual loss shall be the amount required to correct the improperly completed work.


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