Verbal Contract, Lapsed Registration, and a Cash Deposit on a Pre-1978 Two-Family
A contractor in Worcester gives a verbal price of 18,400 dollars to tear off and reroof an owner-occupied two-family house built in 1955, and to replace two skylights. The homeowner pays 9,000 dollars in cash the same day, on the kitchen table, with no written contract and no receipt beyond a handwritten note. The contractor's home improvement registration expired 14 months ago and his roofing license lapsed last year; he says he will 'renew when things slow down.' No building permit is pulled. He plans to use two day laborers paid in cash, with no workers' compensation coverage, and the homeowner mentions that her daughter and a two-year-old live in the downstairs unit. The roofer intends to start Monday and to be paid the balance when the shingles are delivered. A neighbor who is a retired building inspector asks you, as a licensed contractor being asked for a second opinion, what is wrong with this picture.
1. Identify the Massachusetts legal requirements this contractor is violating, with the specific rule for each.
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Registration and licensing. Home improvement contracting on an owner-occupied one-to-four-family home requires registration under M.G.L. c. 142A, with the implementing regulations at 201 CMR 18.00, administered through the Office of Consumer Affairs. Registration must be current at contract signing and throughout the job, and the registration number must appear on the contract. Separately, roofing work requires the appropriate roofing license under the building code licensing regulations, and structural work such as skylight framing can require an unrestricted construction supervisor license. Lapsed means unlicensed.
Contract. Residential contracts must be in writing, signed by both parties, and include the contractor's registration number, a description of the work and materials, the payment schedule, the total price, and notice of the homeowner's three-day right to cancel for a contract signed at the home. A handwritten note on a kitchen table is not a contract.
Deposit. The advance payment rules under 201 CMR 18.00 limit how much may be collected before work and materials are delivered. Half the contract price in cash at signing, before any material is on site, exceeds what the regulations allow, and the 'balance when shingles are delivered' schedule compounds it.
Permit, labor, lead. A roofing permit is required, and the permit should identify the licensed contractor. Paying laborers in cash without workers' compensation violates the workers' compensation statute and exposes the homeowner and the contractor. The house predates 1978, so lead-safe renovation requirements apply, heightened because a child under six lives in the building; the contractor must hold the required lead-safe credentials and use certified firms and trained workers.
2. What are the realistic consequences for the contractor and for the homeowner if this job proceeds as planned?
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For the contractor. The contract is unenforceable and the homeowner can recover the deposit through the consumer process, with the likelihood of a stop-work order, civil penalties, and license and registration discipline. Working while unregistered can also bar him from using the courts to collect the balance. Cash wages with no workers' compensation means a single injury, even a minor one, becomes a personal claim against him and potentially against the homeowner's policy, and uninsured employment cases can carry multiplied damages. If the roofing work is done by an unlicensed party, the local building official can refuse to inspect and can require removal or rework. Lead violations in a pre-1978 home with a young child carry their own penalties and can trigger a full abatement obligation.
For the homeowner. She has no written scope, so any dispute about what was promised is her word against his. Her deposit is unprotected except through a guaranty fund claim, and such funds have caps and require documented loss. Unpermitted work becomes a disclosure problem when she sells and can complicate insurance. A worker injured on her property may pursue her as a landowner, and her homeowner's policy may exclude or contest payment for work performed by an uninsured, unregistered contractor.
The bottom line. This is not a paperwork technicality. Every missing element is a mechanism that leaves the homeowner without a remedy and the contractor without insurance.
3. Draft the corrective structure you would advise: what the contractor must do before Monday, and what the homeowner should insist on.
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Before Monday, the contractor must: renew the home improvement registration and the roofing license; obtain or confirm the construction supervisor license needed for the skylight framing, if applicable; complete the lead-safe renovation credentials and use a certified firm and trained workers for the pre-1978 building; secure workers' compensation coverage for himself and any employees, and require it from any subcontractor; and pull the building permit in the licensed contractor's name.
The contract. Put it in writing with the registration number, a clear scope including the skylight units and flashing, brand and grade of shingles underlayment and ice-dam membrane, the total price, and a payment schedule tied to milestones: a limited deposit allowed by regulation, a progress payment at dry-in, and the balance at final inspection and homeowner acceptance. Include the three-day cancellation notice with the required form, a start and completion date, the change-order process, and the warranty terms. Give a receipt for every payment.
What the homeowner should insist on. A copy of the current registration and license, a certificate of insurance for liability and workers' compensation, the lead-safe certification, the permit number, and a written contract before any further money changes hands. She should also require lien waivers from material suppliers and any subcontractors at each payment, and she should not pay cash without a receipt.
Advice to the neighbor. If the contractor will not do these things, the homeowner should demand the deposit back and file a complaint with the state consumer agency rather than let work start. A roofing job can be redone; a bad contract is much harder to unwind.