Massachusetts Contractor Rules for Your Repair List

If your inspection report turned into a list of repairs you plan to hire out after closing, Massachusetts has rules for that contractor. M.G.L. c. 142A sets rules for the contract, the deposit and disputes.

Which homes the law covers

M.G.L. c. 142A, § 1 defines residential contracting as reconstruction, alteration, renovation, repair, modernization, conversion, improvement, removal, demolition or an addition on a pre-existing, owner-occupied building containing up to 4 dwelling units. The chapter treats the homeowner, or a tenant of that building, as the owner. The law applies statewide, including in Boston.

When a written contract is required

M.G.L. c. 142A, § 2 says every agreement for residential contracting services in an amount over $1,000 has to be in writing. The contract must include the complete agreement, the contractor’s name, address and registration number, the date work is scheduled to begin and to be substantially completed, a detailed description of the work and materials, the total price, and a schedule of payments with each amount stated in dollars, including finance charges. All parties sign, and the owner gets a signed copy. No work is supposed to begin before that happens.

The notices in the contract

The contract has to carry a clear and conspicuous notice that contractors must be registered, the contractor’s registration number, the owner’s three-day cancellation rights where those laws apply, the warranties and the owner’s rights under the chapter, any lien or security interest on the home, and, directly above the signature line in bold type, ‘Do not sign this contract if there are any blank spaces’.

The deposit cap

A deposit paid before work starts cannot exceed the greater of one-third of the total contract price or the actual cost of special-order or custom materials that must be ordered in advance to keep the project on schedule. No final payment can be demanded until the contract is completed to the satisfaction of the parties.

Permits and the guaranty fund

The contract must tell the homeowner which permits are needed, that obtaining them is the contractor’s obligation, and that homeowners who secure their own permits are excluded from the guaranty fund provisions of the chapter. Under M.G.L. c. 142A, § 5, the Residential Contractor’s Guaranty Fund compensates owners for actual losses from a registered contractor’s poor work or consumer protection violations when a court or arbitrator has found against the contractor, the contractor hasn’t paid, and reasonable collection efforts have been made.

Registration

M.G.L. c. 142A, § 9 says no contractor or subcontractor may undertake or offer residential contracting services without registering with the Office of Consumer Affairs and Business Regulation. Violations of the chapter are also treated as unfair or deceptive acts under M.G.L. c. 93A.

If there’s a dispute

An owner can bring an action in superior court, district court or small claims, or use a private arbitration program approved by the director of consumer affairs and business regulation. Under M.G.L. c. 142A, § 4, no arbitration claim may be filed after 5 years from the date of the contract.

One caution about paperwork

The statute also says a contract that misses these requirements is not invalid solely because of that. The requirements protect you most when you ask for them before you sign.

Sorting a repair list

If your inspection turned up a list and you’re not sure where to start, send it to me and I’ll help you think through who to call. Diana Kim, REALTOR®, eXp Realty.