Contractors are expected to have a basic understanding of what projects require a Home Improvement Contractor (HIC) registration. When asked, most contractors can recite that projects exceeding $1,000 in value involving “pre-existing, owner-occupied, one-to-four-family residences” require an HIC registration. We all know what a pre-existing house is and we all know what a one-to-four-family residence is. An owner-occupied home, however, is not always as easy to identify. There are two notable instances where OCABR will consider a house to be “owner occupied,” even if the homeowner does not live there as a primary residence when the contract is signed with the contractor.
In 2001, the Massachusetts Appellate Court decided a case (Simas v. House of Cabinets, 53 Mass. App. Ct. 131, 136-137 (2001)) where a homebuyer purchased a home and wanted renovations prior to moving in. The project did not go well and the homeowner sought various forms of relief under the Massachusetts HIC Law. In court, the contractor argued that the HIC law did not apply because the owner did not yet occupy the house. The court ruled that a home is considered owner occupied when the homeowner hires a contractor and intends to live in the home as a primary residence once the construction is complete. In my experience, this situation usually occurs when a homebuyer purchases a home that needs repairs or is uninhabitable. In those circumstances, contractors must have an HIC registration prior to signing a contract with those homeowners.
Contractors should also be aware that the person who owns the home is not the only person that will be considered an owner. For the purposes of determining whether a home is owner occupied, OCABR considers “a tenant authorized by the homeowner, who orders, contracts for, or purchases the services of a contractor or subcontractor” to be an owner. See 201 CMR 18.01(2) Owner. In other words, if a tenant of a home hires a contractor, the home will be considered owner occupied. Only on rare occasions will a tenant purchase home improvement services valued over $1,000, but contractors should be aware that an HIC registration is required to be hired for those projects.
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