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Home Improvement Contracts: Considerations In MA And Delays Due To Pandemic
Home repair and renovation projects don’t always go as planned. A small disagreement between homeowners and contractors can blow over to courtroom battles. As a homeowner, unless you want to waste your time in a “he said, I said” courtroom battle along with the unnecessary stress, it’s better to take a few steps to diminish the possibilities of contractor disputes. For contractors, it’s even more critical because any disputes can drastically harm your future business.
Homeowners and contractors must be aware of the Massachusetts General Law Chapter 142A (Regulation of Home Improvement Contractors in Massachusetts). 142A governs home improvement contractors, so if you’re any kind of a contractor, it’s better to thoroughly know the relevant regulations to bring your business in compliance with the law.
For brevity, we’ll use the abbreviation M.G.L. C142A to refer to the law throughout this piece.
What Is M.G.L. C-142A?
This home improvement law is meant to safeguard both property holders and service providers from fraudulent practices during residential construction projects. The law stipulates that contractors provide a written contract for projects costing above $1000. If they fail to do so, they may face fines, criminal prosecution, or suspension of their contractor license.
If you’re confused about whether your home improvement complies with M.G.L.C-142A, you should contact a construction law attorney for guidance. The law is particular about what must be included in a home renovation project.
Key Features Of The M.G.L.C-142A
Many contractors are not aware of this law’s stipulations and overlook some of the clauses, potentially putting themselves up for increased liability in the case of contractor disputes.
A common mistake that lands contractors in hot water later is first verbally agreeing to the scope of work and later on providing a written account of the work they’ll be doing. M.G.L. C-142A stipulates that for home improvement contracts above $1000, the complete agreement must be signed by both parties before starting work.
- The contract must feature all the relevant information about the contractors and the subcontractors involved. The first page of the contract must include the contractor’s name, the business name, the Federal I.D number, the phone number, and the names of any salespersons involved in the transaction and the address. The address must be a physical address, not a P. O box.
- The contract must also include the relevant dates, from the commencement date to the expected finish date, or when the project will be substantially completed.
- A detailed description of all the work to be done in the project, including the materials, designs, and specifications to be used, must also be included in the contract.
- The project’s total price (including any finance charges), along with the payment schedule, must be mentioned clearly in the contract. Any advance deposit must not exceed one-third of the total price of the project. The contract allows an exception for custom made materials that need to be pre-ordered before the work starts. The final payment must not be paid until the completion of the project.
- The contract should include a list of all the permits needed for the project. As a contractor, it is your responsibility to obtain the permits, and you should state that clearly on the contract. Under the M.G.L. C-142A, homeowners who obtain permits themselves are not eligible for the Guaranty Fund.
- The M.G.L.C-142A states that homeowners’ are eligible for a 3-day cancellation allowance after signing the contract. It’s better to have the cancellation clause on a separate page, so the homeowners can sign the notice and mail it to the contractor if they choose to cancel.
- The contract must also include a clause that states that all contractors and subcontractors must be registered.
- Lastly, the contract should inform the homeowner of all the warranties on the homeowners’ rights. If there has been any security interest place on the residence due to the deal, it must be mentioned.
Suppose any of the two parties want to include a clause to take any future contractor dispute for arbitration. In that case, they should have an arbitration clause in the contract signed by both parties involved.
The contract must be signed by both the contractor and the homeowner. Give a copy of the agreement to the homeowner before the contractor is legally allowed to start any work. The contract must feature a disclaimer stating, “Do not sign this contract if there are any blank spaces.”
The Impact Of The COVID-19 Pandemic On Home Improvement Contracts
With the COVID-19 pandemic gripping the world, many home improvement projects will have taken a hit. Contractors may find it hard to source materials and labor, homeowners may find it hard to follow up with payments, and permits might be hard to obtain from building authorities
Under the Massachusetts home improvement laws, the date or specific time period on which work is to be started and completed must be mentioned. To comply with this, contractors either issue dates or give a duration stipulating work will commence with X days and end within Y days. If there is any change to these dates, it must be outlined in writing. Take a review of the delay claims in your contract. Do they provide leeway for diseases?
Contractors must pay special attention to the force majeure or “act of God” clause, which are quite relevant in the current circumstances. These clauses excuse delays caused by unforeseeable events. Frame the clause in such a way that it mentions quarantine, diseases, and the pandemic.
Consider including escalation clauses in your contract. The pandemic has affected global supply chains, so this clause should help you mitigate any cost overruns or price fluctuations. It’s also advisable to review the termination clauses in your contract. Many subcontractors and contractors might want to cancel the contract due to the pandemic.
Construction contracts require some sort of insurance. Have a look at the insurance policies to see if they cover diseases under the “injuries sustained on the job” coverage? A business interruption insurance can be useful in the present scenario if you need to comply with quarantine measures.
Lastly, the project should comply with adequate safety provisions to avoid the spread of the virus. Social distancing measures, mandatory handwashing sites, and limited access to outside parties must be maintained.
Taking up any home improvement projects in the COVID-19 pandemic can be risky. The labor shortages, price fluctuations, supply chain disruption, and overall uncertainty makes every contractor think twice before taking up any project.
To discuss with an expert construction contact lawyer, contact the Law Offices of Richard Mucci for a free initial legal consultation.