Hiring a contractor in Massachusetts: what the law requires and what to check

The short answer: for work on an existing, owner-occupied one- to four-family home, your contractor must be a registered Home Improvement Contractor (HIC), and structural work such as an addition or a deck must also be supervised by a Construction Supervisor License (CSL) holder or a registered design professional. Any contract over $1,000 must be in writing with specific terms, the deposit cannot exceed one-third of the price (unless special-order materials cost more), and the contractor, not you, should pull the building permit. That last point keeps you eligible for the state's Guaranty Fund.

Two credentials, two different jobs

Massachusetts has two separate credentials, run by two separate offices, and they are not interchangeable.

OCABR's own guidance puts it simply: larger projects such as building a deck or an addition require a CSL, and some structural work, like a kitchen renovation, may require both a CSL and an HIC registration. They do not have to be held by the same person. But the contractor who signs the contract with you must be HIC-registered.

Who must be HIC-registered, and what the law covers

Under chapter 142A, the Home Improvement Contractor law covers "residential contracting": the reconstruction, alteration, renovation, repair, modernization, conversion, improvement, removal or demolition of, or construction of an addition to, a pre-existing owner-occupied building with one to four dwelling units, used as a residence, or structures adjacent to it. Contractors and subcontractors both have to register.

The coverage has limits that surprise people. According to OCABR, the HIC law does not cover:

• New construction, including a new house on an empty lot.
• Buildings with more than four units.
• Investment properties, and vacation or secondary homes.
• Homes outside Massachusetts.

So if you are renovating a summer house in Rockport or Manchester-by-the-Sea that is not your primary residence, or building new, the HIC contract rules and the Guaranty Fund do not protect you. You can still sue, and a good contract matters even more.

Some trades do not need HIC registration at all: installers of central heating and air conditioning, energy-conservation devices (solar panels excepted), landscaping, interior painting, wall and floor coverings, fencing, freestanding masonry walls, above-ground pools, shutters and awnings, ground-level patios and driveways. Neither do architects, electricians and plumbers working within their own licenses, some small part-time jobs under $500, or homeowners doing their own work.

When a Construction Supervisor License is required

OPSI says a licensed construction supervisor or a registered design professional must oversee construction of one- and two-family homes and their accessory structures, most existing one- to four-family owner-occupied homes, and other buildings under 35,000 cubic feet of enclosed space. The license comes in an unrestricted version, a one- and two-family dwelling version, and specialty versions for masonry, roofing, windows, doors and siding, solid-fuel appliances, demolition and insulation.

To get one, an applicant has to verify three years of building construction or design experience and pass an exam administered by PSI. Testing on the 10th Edition building code began January 1, 2025. Massachusetts does not recognize out-of-state contractor licenses, so a supervisor licensed only in New Hampshire is not licensed here.

What the contract must say

Chapter 142A, section 2 requires every residential contracting agreement over $1,000 to be in writing and to include:

• The complete agreement, and a clear description of any other documents incorporated into it (drawings, specifications, allowance schedules).
• The parties' full names and street addresses, the contractor's registration number, the name of any salesperson, and the date signed.
• The date work is scheduled to begin and the date it is scheduled to be substantially complete.
• A detailed description of the work and the materials to be used.
• The total price.
• A payment schedule with every payment stated in dollars, including any finance charges.
• The signatures of all parties.
• Clear notices: that contractors must be registered and where to direct inquiries, the registration number, your three-day cancellation rights where applicable, all warranties and your rights under the law, and any lien or security interest on your home.
• Directly above the signature line, in 10-point bold type or larger: "Do not sign this contract if there are any blank spaces."

The statute also requires the contract to tell you which permits the work needs, that the contractor must obtain them, and that homeowners who pull their own permits are excluded from the Guaranty Fund. It bars acceleration clauses that would make the remaining balance due because the contractor feels insecure, and it says no final payment may be demanded until the work is completed to the satisfaction of the parties. No work may begin until the contract is signed and you have a copy.

The one-third deposit rule

Any 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-made materials or equipment that have to be ordered before work begins to keep the project on schedule.

In plain terms: a contractor can ask for up to a third up front. If the job needs custom cabinetry, windows or a special-order range that must be ordered well ahead, the deposit can cover their actual cost, even if that is more than a third. A contractor asking for half down on a general renovation with no special-order items is asking for more than the law allows. After the deposit, payments should follow a schedule tied to progress, each stated in dollars.

Your three-day right to cancel

Massachusetts law gives a cancellation right when a household services agreement over $25 is signed somewhere other than the seller's business address, for example at your kitchen table. Under chapter 93, section 48, you can cancel for any reason by notifying the seller in writing no later than midnight of the third business day after signing. The contract must state that right in 10-point bold type near your signature and attach a notice of cancellation form in duplicate. If required terms or the signed copy are missing, the three days do not start until they are provided.

Chapter 142A requires the contract to give notice of three-day cancellation rights under chapter 93 or the state's consumer-credit and retail-installment laws, "as may be applicable." If you sign at the contractor's office, the door-to-door right may not apply, but financed contracts can carry their own.

Who pulls the permit, and why it should not be you

OCABR's advice is direct: the registered contractor should pull the building permit. If the homeowner pulls it, the homeowner may lose eligibility for the Guaranty Fund. The permit card must be posted on site until the work is complete.

Pulling a permit as a homeowner is not illegal, and for your own weekend project it is the normal route. But when you have hired someone, the permit is how the building department, and later the Guaranty Fund, knows who is responsible for the work. If a contractor asks you to pull the permit for a job they are doing, ask why. Permits also carry their own local layers, from Title 5 septic review to historic commissions, and the contractor who pulls the permit should be the one managing them.

Arbitration, the Guaranty Fund and complaints

If the job goes wrong, a registered contractor gives you two remedies an unregistered one does not, and the state's complaint process applies to both.

• Arbitration. All registered contractors must agree to arbitrate, and you can ask for a dispute to go to a state-approved private arbitration program instead of court.
• The Guaranty Fund. A fund of last resort that pays eligible homeowners their actual losses, up to $25,000, when a registered contractor fails to pay a court judgment or arbitration award and reasonable collection efforts have been made.
• Complaints. OCABR can fine a contractor up to $2,000 per violation and suspend or revoke a registration after a hearing. A complaint does not produce money for you.

To be eligible for the Guaranty Fund you need a contract, a contractor who was registered when it was signed, a building permit obtained by the contractor (not you), work on a pre-existing one- to four-family Massachusetts home that is your primary residence, a judgment or award you have tried to collect, and a timely application. OCABR describes a seven-year filing window but states its starting point two different ways on its own page, so confirm the deadline with OCABR if you think you may need to file.

Hire an unregistered contractor and you lose both arbitration and the Guaranty Fund. You can still file a complaint or go to court, where OCABR says the first step is a 30-day demand letter and small claims court handles claims under $7,000. A winning homeowner recovers actual damages or $25, whichever is greater, and a willful or knowing violation can bring at least double damages plus attorney's fees.

How to check a contractor before you sign

1. Look up the HIC registration on the state's MA Contractor Hub, including complaint history, and ask to see the state HIC ID card. The name on the registration should match the name on the contract.
2. Confirm the CSL for anyone who will supervise structural work, and ask who that person is on your job.
3. Check the ads. Chapter 142A requires a contractor's home-improvement advertising to carry its registration number.
4. Get insurance certificates for general liability and workers' compensation, sent by the insurance agent, current for the dates of your job.
5. Get written references for the three most recent jobs, and call them.
6. Interview at least three contractors and compare written, detailed estimates on the same scope, not just bottom lines.
7. Watch for loan offers. Contractors may not lend you money or act with a lender on a mortgage-secured loan for the work.

Beyond the legal minimum, ask how the contractor communicates (and whether decisions end up in writing), who is on site day to day, how changes are priced, how selections and allowances are handled, and what the warranty covers. A contractor who answers those plainly at the first meeting usually runs the job the same way.

01 Drawing

Concept rendering

Line perspective

02 Model

Concept rendering

Untextured massing, same camera

03 Rendering

Concept rendering

Materials and light

Where Penney stands on each of these

For the record, since you should check us the same way: Penney Construction, Inc. is registered as a Home Improvement Contractor, HIC #198443, and our owner, Ryan Penney, holds Massachusetts Construction Supervisor License CS-099765. Our deposits stay within the one-third limit except for special-order materials, as the law allows.

Every proposal is line-item, with allowances shown as allowances, and changes are written change orders. We design and render projects in-house, so the scope in the contract matches what you saw. Clients get a private portal with the schedule, daily photos, financials and selections, email is our line of record, and our workmanship carries a one-year warranty. You can see how we work and why we do design and construction under one roof, or start a conversation.

Questions homeowners ask

Does my contractor need to be licensed in Massachusetts?

For work on an existing owner-occupied one- to four-family home, the contractor must be a registered Home Improvement Contractor. For structural work, such as additions, decks and some kitchens, the work must also be supervised by someone with a Construction Supervisor License or by a registered design professional. Massachusetts does not recognize out-of-state licenses.

How much can a contractor ask for as a deposit in Massachusetts?

No more than the greater of one-third of the total contract price or the actual cost of special-order or custom materials that must be ordered before work begins, under M.G.L. c.142A, s.2.

Should I pull the building permit myself to save money?

Not when you have hired a contractor. OCABR says homeowners who pull their own permits may lose eligibility for the Guaranty Fund, and the contract is supposed to state that the contractor will obtain the permits.

Does the HIC law cover my vacation home?

No. OCABR says the HIC law does not cover vacation or secondary homes, investment properties, new construction, or buildings with more than four units, and Guaranty Fund claims require the home to be your primary residence.

How do I check a contractor's registration?

Search the HIC registration and complaint history on the MA Contractor Hub, ask to see the HIC ID card, confirm the CSL for whoever will supervise structural work, and get liability and workers' compensation certificates from the insurance agent.