Be Contract Savvy
What should a home-improvement contract contain and why?
by Paul Tardif
As a homeowner and remodeler, you should know that before
your builder commences your project, a contractual relationship
should be created. You should also know that the Commonwealth
of Massachusetts mandates that these contracts contain certain
provisions meant to protect consumers like you. Most of the
contracts used by home-improvement professionals are illegal.
Unfortunately, in failing to become aware of state requirements,
homeowners and contractors may end up redefining their relationship
in a court of law—as litigants.
Massachusetts General Laws Chapter 142A, known as the Home
Improvement Contractor Act, regulates the contracts between
owners of one- to four-family homes and residential contractors
who reconstruct, alter, renovate, repair, modernize, convert,
improve, remove, demolish or construct such homes. Although
the Act addresses the contents of contracts and the remedies
for violations of those contracts, this article will discuss
the contract requirements in detail.
Every agreement to perform residential contracting services
in an amount above $1,000 should be in writing and should
include the following documents and information:
1) the complete agreement between the owner and the contractor
and a clear description of any other documents which are
or shall be incorporated into said agreement;
2) the full names, Social Security numbers, addresses, exclusive
of Post Office box addresses, registration number of the
contractor, the names of the salesperson, if any, who solicited
or negotiated the contract and the date when said contract
was executed by the parties;
3) the date on which the work under the contract is scheduled
to begin and the date on which said work is scheduled to
be substantially completed;
4) a detailed description of the work to be done and the materials to be used
in the performance of said contract;
5) the total amount agreed to be paid for the work to be performed under said
contract;
6) a time schedule of payments to be made under said contract and the amount
of each payment stated in dollars, including all finance charges. Any deposit
required under the contract to be paid in advance of the commencement of work
cannot exceed the greater of one-third of the total contract price or the actual
cost of any materials or equipment of a special order or custom made nature,
which must be ordered in advance of the commencement of work, in order to assure
that the project will proceed on schedule. No final payment shall be demanded
until the contract is completed to the satisfaction of the parties;
7) all parties must sign the contract;
8) there shall be a clear and conspicuous notice appearing in the contract:
-that all contractors and subcontractors must be registered according to the
Act
-of the registration number of the contractor or subcontractor;
-of an owner’s three-day cancellation rights;
-of all warranties and the owner’s rights under the Act;
-in 10-point bold type or larger, directly above the space provided
for the signature, “Do not sign this contract if there are any blank spaces’’;
-of any lien on or security interest on the residence as a consequence
of the contract.
Regarding the owner’s three-day cancellation rights, you have
the right to rescind any contract that you have signed in your home
within three days of signing it. If this provision is not contained
in the contract, you retain your rights to cancel the contract at any
time during the existence of that contract.
9) a list of any other agreements of the parties. However, no agreement
may waive any rights conveyed to the owner under the Act.
At the time of signing, the owner should be furnished with
a copy of the contract, signed by both the contractor and
the owner. No work should begin prior to the signing of
the contract and transmittal to the owner of a copy of
such contract. Any contract entered into between a contractor
and homeowner should require the contractor to inform the
homeowner of the following: 1) any and all necessary permits,
2) that it shall be the obligation of the contractor to
obtain said permits, and 3) that homeowners who secure their own
permits will be excluded from the Guaranty Fund. The Fund was created
by the Commonwealth in order to compensate owners up to $10,000
for actual losses incurred as a result of registered contractor or
subcontractor conduct which a court has deemed to be work performed
in a poor or “unworkmanlike” manner
and which judgments have remained unpaid by the violating contractor.
You will find that, in lieu of a contract, many contractors
will provide you with a “proposal” which does not contain each of the items noted
above. Many contractors feel that presenting a contract with these numerous
terms will scare potential work away. Remember that a contractor’s willingness
to comply with the Act is a good indicator of the kind of operation he or she
will run. In addition, most reputable contractors will have obtained their
Massachusetts Construction Supervisor’s License and/or registered
as a home-improvement contractor. Take the time, before the project
commences, to protect yourself and secure the ability to seek redress
in the event that the relationship does in fact become adversarial.
Paul Tardif, Esq., is a Yarmouthport attorney who regularly
represents clients in the Mid-Cape area in matters of real
estate, zoning and land use. |
