201 CMR 14.00 — Home Improvement Contractor Arbitration and Guaranty Fund

201 CMR: OFFICE OF CONSUMER AFFAIRS AND BUSINESS REGULATION 201 CMR 14.00: HOME IMPROVEMENT CONTRACTOR ARBITRATION AND GUARANTY FUND Section 14.01: Purpose 14.02: Definitions 14.03: Arbitration Requests 14.04: Role of OCABR 14.05: Processing of Requests 14.06: The Arbitrator 14.07: Settlement by Submission of Documents for Claims of $25,000 or Less 14.08: Notification and Scheduling of Arbitration Hearings 14.09: Disclosure of Information 14.10: Rescheduling Arbitration Hearings 14.11: Failure to Appear 14.12: Withdrawal 14.13: The Hearing 14.14: Determining Actual Loss 14.15: The Decision 14.16: Disputing the Arbitrator's Decision 14.17: The Award 14.18: Establishment of the Guaranty Fund 14.19: Contractor Fee to the Guaranty Fund 14.20: Duties of Fund Administrator 14.21: Payments from Guaranty Fund 14.22: Miscellaneous

201 CMR 14.00 Home Improvement Contractor Arbitration and Guaranty Fund

14.01 Purpose

14.01: Purpose (1) Purpose. 201 CMR 14.00 sets forth procedures for operation of private arbitration services program within the Office of Consumer Affairs and Business Regulation (OCABR) to consider disputes between homeowners and contractors, or subcontractors, and in the case of deceased contractor, or subcontractors, their administrator, executor or personal representative, as required by M.G.L. c. 142A, § 4. It is designed to promote the speedy, efficient and fair disposition of disputes arising out of the improvement of an owner-occupied, one-to-four family residential home by a registered contractor or subcontractor. It also sets forth procedures for homeowner access to a Guaranty Fund. The Guaranty Fund, established by M.G.L. c. 142A, § 5, compensates homeowners for actual losses they incur as a result of registered contractor or subcontractor conduct found by an approved arbitrator or court of competent jurisdiction to be work performed in a poor or unworkmanlike manner or which is a common law violation or a violation of any statute or regulation designed for the protection of consumers. (2) Applicable Regulations. Other regulations applicable to M.G.L. c. 142A include: (a) 201 CMR 18.00: Registration and Enforcement of Home Improvement Contractor Program promulgated by the director of the Office of Consumer Affairs and Business Regulation. (b) 940 CMR 8.00: Mortgage Brokers and Mortgage Lenders promulgated by the Office of the Attorney General. (c) 209 CMR 42.00: The Licensing of Mortgage Lenders and Mortgage Brokers promulgated by the Division of Banks and Loan Agencies. (3) Scope. 201 CMR 14.00 shall apply to all home improvement transactions with a written contract between a homeowner and a contractor or subcontractor registered with the Office of Consumer Affairs and Business Regulation.

14.02 Definitions

14.02: Definitions Unless otherwise stated, terms used in 201 CMR 14.00 are as defined or used in M.G.L c. 142A. 6/6/25 201 CMR - 65 (Mass. Register #1549, 6/6/2025)

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14.02 continued

14.02: continued Actual Loss. Amounts payable for the cost of repair, replacement, completion or performance under the terms of a written residential home improvement contract with respect to which a Guaranty Fund claim is made. Applicant. The owner occupant, authorized tenant, authorized trustee of a non-business trust, or registrant covered by provisions of M.G.L. c. 142A who files a request, on an approved form, for arbitration before an OCABR approved arbitrator claiming a failure of performance under a residential home improvement contract. Arbitrator. Any person who has been certified by OCABR to perform home improvement contractor, or subcontractor arbitration services. These appointed individuals issue binding decisions pursuant to M.G.L. c. 142A and 201 CMR 14.00. Business Days. Monday through Friday, except for state and federal holidays. Claimant. An owner and resident of a residential building, containing at least one but not more than four dwelling units, who has entered into a construction contract with a contractor, or subcontractor to carry out construction work on said building, and who is making a claim against said contractor, or subcontractor for failure of performance under said contract pursuant to M.G.L. c. 142A. A claimant may only recover once up to and no more than $25,000 from the Guaranty Fund to compensate for actual loss. Clear and Conspicuous. Shall be defined in a manner which is consistent with the definition provided by the applicable sections of the Attorney General's Retail Advertising Regulations, 940 CMR 6.01: Definitions and 6.01: Clear and Conspicuous(f) and the Attorney General's Mortgage Brokers and Mortgage Lenders Regulations, 940 CMR 8.03: Definitions. 201 CMR 14.00 provides that clear and conspicuous shall mean that the material representation being disclosed is of such size, color, contrast, or audibility and is presented so as to be readily noticed and understood by a reasonable person to whom it is being disclosed. Contract. A written agreement in one or more documents for the performance of certain residential contracting work, including all labor, material, goods and services set forth under said agreement. Contractor. Any person who owns or operates a contracting business who, through themself or others, undertakes, offers to undertake, purports to have the capacity to undertake, or submits a bid for residential contracting work. For purposes of 201 CMR 14.00, the Office of Consumer Affairs and Business Regulation shall deem a contractor, or subcontractor to be duly registered if the contractor, or subcontractor is registered in accordance with M.G.L. c. 142A and 201 CMR 18.00: Registration and Enforcement of Home Improvement Contractor Program on the contract signing date with the owner. In the case of the deceased contractor, or subcontractor, their administrator, executor, or personal representative is substituted where applicable. Designated Agent. A party any individual designated, in writing, to represent the individual. A designated party need not be an attorney. Fund Administrator. The administrator of the Residential Contractor's Guaranty Fund, appointed by the director of the Office of Consumer Affairs and Business Regulation. Guaranty Fund (including the term Fund). The Residential Contractor's Guaranty Fund established pursuant to M.G.L. c. 142A. OCABR. The Office of Consumer Affairs and Business Regulation. 6/6/25 201 CMR - 66

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14.02 continued

14.02: continued Owner (including the term Homeowner). Any owner of a pre-existing owner-occupied building containing at least one but not more than four dwelling units, or a tenant authorized by the homeowner thereof, who orders, contracts for, or purchases the services of a contractor or subcontractor. An owner occupying a condominium unit in a building containing no more than four dwelling units qualifies as an owner. A corporation, partnership, (incorporated or unincorporated), business trust, charitable organization, or any other business entity does not qualify as an owner. Owner-occupied. The residential building of at least one but not more than four dwelling units that is occupied or intended to be occupied by the owner as a primary residence. A residential building that is held by a non-business trust but that otherwise qualifies as a residential building under this definition shall be "owner-occupied" if the applicant submits proof that said building is their primary residence. Such proof shall include, but not be limited to, the applicant's valid declaration of homestead for said building, or evidence of eligibility for a homestead exemption. Person. Any individual, partnership, corporation, society, trust, association, or any other legal entity. Reasonable Efforts to Collect. Such efforts as are reasonable for the purpose of collecting a judgment or award as established by OCABR. In determining satisfactory efforts, OCABR shall consider factors, including but not limited to, the amount of the judgment or award, the likely costs of continued collection efforts, whether the debtor can be located, and whether the debtor has filed bankruptcy. Registrant. Any person duly registered as a home improvement contractor or subcontractor under the provisions of M.G.L. c. 142A and 201 CMR 18.00: Registration and Enforcement of Home Improvement Contractor Program on the date of the contract with the owner. Registration Number. The number assigned to the contractor or subcontractor after the contractor has been approved for registration by the OCABR. Residential Contracting. The reconstruction, alteration, renovation, repair, modernization, conversion, improvement, removal, demolition, or the construction of an addition to any pre- existing owner occupied building containing at least one but not more than four dwelling units, which building or portion thereof is used or designed to be used as a residence or dwelling unit, or to existing structures which are adjacent to such residence or building including, but not necessarily limited to: garages, sheds, cabanas, pool houses, gazebos. Request for Arbitration Form. The form provided by the director of OCABR to applicants filing for arbitration. Subcontract. A contract, written or verbal, in any amount, between a home improvement contractor and a subcontractor or between two subcontractors for the performance of any part of the home improvement contractor's or subcontractor's contract. Subcontractor. Any person other than a supplier of material or labor, who enters into a contract, written or verbal, with a contractor or subcontractor for the performance of any part of the contractor's contract, or who enters into a contract with any other subcontractor for the performance of any part of the subcontractor's contract, and who does not perform work other than as a subcontractor. Technical Corrections. A non-substantive computational correction, typographical correction or other minor correction. Unworkmanlike Manner. Materials that are used and methods which are employed that are of substandard, unreasonable, imprudent, or inadequate quality or are inconsistent with good construction practices; that materials used and methods employed are wholly or partially inaccurate or unacceptable in final appearance or function; or, that materials used and methods employed are unsafe or may result in an unsafe or non-functional final product. 6/6/25 201 CMR - 67

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14.03 Arbitration Requests

14.03: Arbitration Requests (1) List of Approved Arbitrators. The director of OCABR shall maintain a list of arbitrators who have been approved to arbitrate home improvement disputes under M.G.L. c. 142A and 201 CMR 14.00. Such list shall be public and shall be made available upon request. (2) Arbitration Application. Any eligible party seeking arbitration pursuant to M.G.L. c. 142A of a home improvement dispute shall submit a request for arbitration to the OCABR on a form supplied by the OCABR. (3) Application Requirements. To be eligible for arbitration, the request for arbitration must: (a) comply with 201 CMR 14.03(2); (b) be complete; (c) be for a one-to-four unit, owner-occupied residence or property located in Massachusetts; (d) included a narrative description of the problem; (e) involve a contractor or subcontractor, or in the case of a deceased contractor or sub- contractor, their administrator, executor, or personal representative, registered with the OCABR as the date of the contract; (f) include a copy of the written contract; and (g) include a monetary amount sought. (4) Homeowner Arbitration Eligibility. If an applicant is a homeowner, the applicant is eligible for arbitration only if the contractor, or subcontractor is duly registered with the director of the OCABR and the parties have a written agreement and the request for arbitration complies with 201 CMR 14.03(3). The contractor or subcontractor may file a counterclaim. (5) Contractor Arbitration Eligibility. If a registered contractor or subcontractor, or their administrator, executor, or personal representative files a request for arbitration, the parties' written agreement must contain an arbitration clause and must be separately signed and dated by the parties. If the arbitration agreement is not separately signed and dated by the parties, the contractor may pursue arbitration only with the written permission of the homeowner. In such an event, the homeowner may file a counterclaim. (6) Application Deadline. The OCABR must receive a request for arbitration within five years of the date of the contract signed by the registrant and the homeowner. A request for arbitration form shall be deemed timely filed if it is date stamped or postmarked within this time period. For the purposes of determining an application deadline, a request for arbitration shall be deemed timely filed if an applicant submits a complaint form or guaranty fund application form within five years of the date of the contract, even if the request for arbitration form is submitted subsequent to that date, so long as the complaint or guaranty fund application relates to the same contract and claim. (7) Arbitration Attendance. If an applicant's request for arbitration is accepted, the parties and their designated agents must attend the arbitration, except as provided in 201 CMR 14.13. (8) Eligible Places for Arbitration. Arbitration hearings may take place via videoconferencing unless the parties agree to an in-person hearing, or one of the parties shows good cause why videoconferencing is not feasible. In-person hearings must take place in a neutral location within a 50-mile radius of the residence or property in dispute, unless the parties agree otherwise. (9) Parties to Arbitration. Absent a court order, only the homeowner or owner-authorized tenant and the registered contractor or subcontractor, their administrator, executor or personal representative, shall be parties to an arbitration conducted under M.G.L. c. 142A. The arbitrator and OCABR do not have authority to join third parties. (10) Prohibition against Consolidation. Absent a court order or the written approval of OCABR, the arbitrator shall not consolidate an arbitration case with another arbitration case. (11) Tolling of Application Deadline. A request for arbitration must be filed within the application deadline as set forth in 201 CMR 14.03(6). However, the application deadline shall be tolled by the OCABR in those instances where an aggrieved homeowner enters into formal mediation proceedings or where equity so requires. 6/6/25 201 CMR - 68

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14.04 Role of OCABR

14.04: Role of OCABR OCABR shall approve a private arbitration services program to consider disputes between owners and registered contractors and subcontractors, concerning or arising from contracts for residential contracting services.

14.05 Processing of Request

14.05: Processing of Request (1) Request Intake. The OCABR shall date-stamp and assign a case number upon receipt of a submitted request for arbitration form. (2) Notification of Status. The OCABR shall review submitted request for arbitration forms for completeness and compliance with 201 CMR 14.03: (a) Eligibility. If the application satisfies the eligibility requirements, the eligibility notice shall include a conflict of interest form for listing any potential witnesses, attorneys, or other persons, that might appear on behalf of the parties. The form shall be provided to the arbitrator at the time of appointment to determine whether any conflicts of interest exist between the potential arbitrator and any of the parties to the arbitration case. Upon receipt of the conflict of interest form, OCABR shall appoint an arbitrator, and advise the claimant of the arbitration hearing fee, which shall be paid directly to the arbitrator . (b) Incomplete. Incomplete forms shall be returned to the applicant for completion. Such forms when completed must be received by OCABR within 20 business days of the return to the applicant or the applicant's period of eligibility for filing the request, whichever is later. OCABR may reject any request that is not timely filed. (c) Ineligibility. If a request is rejected, a written statement of the reasons for the rejection shall be sent to the applicant promptly. (3) Arbitration Fee. Within ten business days of the request for fee payment, the claimant must pay the arbitrator the arbitration fee in accordance with the fee schedule established by OCABR. Failure to timely remit the arbitration fee to the arbitrator shall result in the dismissal of the defaulting party's claim. (4) Counterclaim Deadline and Fee. All counterclaims must be submitted to OCABR within ten business days after notice from OCABR of acceptance of the case. The party filing a counterclaim must pay a fee in accordance with the fee schedule established by OCABR. The fee must be paid upon filing. In the absence of extraordinary circumstances, the arbitrator may grant a party no more than one seven business day extension of the time in which to respond to the demand for arbitration or to submit a counterclaim. (5) Request Processing. Upon receipt of the arbitration fee, the arbitrator shall send to both parties acknowledgment that the case has been accepted. The acceptance date shall trigger a 90 business day period in which the hearing must be held and all evidence must be presented. (6) Rescission of Acceptance. The OCABR may rescind any acceptance of a request for arbitration granted in error because of incomplete or erroneous information or misrepresentation on the part of the applicant.

14.06 The Arbitrator

14.06: The Arbitrator (1) Selection of Arbitrator. The OCABR shall appoint the arbitrator when the applicant is deemed eligible for arbitration. A single arbitrator shall conduct each hearing. (2) No Party Approval Power. The choice of the arbitrator is not subject to the approval of either party. (3) Lack of Bias Requirement. The arbitrator shall not have a personal interest in the outcome of any hearing, nor be acquainted with any of the participants except as such acquaintance may occur in the hearing process, nor hold any prejudice or bias toward any individual party or class of parties which might be involved in the proceedings. 6/6/25 201 CMR - 69

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14.06 continued

14.06: continued (4) Disclosure of Conflicts. The arbitrator shall comply with M.G.L. c. 268A and disclose any current or past relationship or affiliation with either party, or their disclosed witnesses, attorneys, or other persons that might appear on behalf of the parties, prior to the hearing. Either party may then request another arbitrator with a showing of good cause that the disclosed relationship or affiliation will affect the arbitration outcome. (5) Arbitrator Disqualification. If either party has a reasonable basis to believe that an arbitrator has violated 201 CMR 14.06(3) or (4) that party may request that the arbitrator be disqualified by submitting the request in writing to the OCABR before the hearing if based on information known at that time. Any such request shall be submitted in writing to the OCABR no later than ten business days from the date the OCABR provides notice of the appointment of the arbitrator to the involved parties. (6) Code of Ethics. The arbitrator shall be guided by the standards of ethical conduct established in The Code of Ethics for Arbitrators in Commercial Disputes prepared by a Joint Committee consisting of a Special Committee of the American Arbitration Association and a Special Committee of the American Bar Association.

14.07 Settlement by Submission of Documents for Claims of $25,000 or Less

14.07: Settlement by Submission of Documents for Claims of $25,000 or Less (1) Written Hearing Presumption. Where no party's claim exceeds $25,000, exclusive of claimed interest and arbitration fees or costs, the dispute shall be resolved by submission of documents (hereinafter called a written hearing), unless any party requests an oral hearing, or the arbitrator determines that an oral hearing is necessary. A party desiring an oral hearing must notify the arbitrator and the opposing side within ten business days of the notice of acceptance of the case, or, in the event a counterclaim is timely filed, within five business days after notice of the arbitrator's acceptance of the counterclaim. After that time, an oral hearing may only be granted with the arbitrator's consent. (2) Written Hearing Procedures. The written hearing shall conform to the following procedures: (a) The parties submit in writing to the arbitrator their respective contentions, including a sworn statement of facts, together with such proofs properly verified, as they wish to submit. Briefs or written arguments may also be submitted at this time. (b) All such documents and proofs submitted by each party shall be filed with the arbitrator no later than ten business days after the mailing of the notice by the OCABR calling for their filing. Failure of a respondent to submit documents and proof within the ten business day period shall be deemed a waiver of the respondent's right to reply subject to the arbitrator's discretion. (c) All documents and proofs submitted by each party shall be sent to the other party and to the arbitrator. (d) Each party may file one written reply to such statements and proofs within a period of ten business days from the date of the letter to the parties requesting replies. Failure of any party to make such a reply within the specified period of time shall be deemed to be a waiver of the party's right to reply. (e) The arbitrator shall examine the documents and request further evidence from either party, or both parties, if necessary, within ten business days of receipt. The documents submitted to the arbitrator and OCABR for the written hearing shall be the official record of the hearing. If the arbitrator does not request further evidence, the written hearing is declared closed at this time and the requirements of 201 CMR 14.15 and 14.16 apply. (f) Either party may request, on no more than one occasion, that the arbitrator give a seven business day extension following the date of submission required by the arbitrator. Such request must be made prior to the date of submission and shall be granted only upon a showing of good cause. 6/6/25 201 CMR - 70

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14.08 Notification and Scheduling of Arbitration Hearing

14.08: Notification and Scheduling of Arbitration Hearing (1) Preliminary Conference. The parties, their attorneys or representatives shall hold a preliminary conference via telephone or video conference at a reasonable date soon after the appointment of the arbitrator, unless the arbitrator determines that a preliminary conference is unnecessary, or unless the parties agree to dispense with the preliminary conference and the arbitrator does not object to such dispensing. The preliminary conference may proceed in the absence of any party or representative who, after due notice, fails to be present or fails to obtain a postponement. (2) Notice of Arbitration Acceptance. Within seven business days after the acceptance of a request for arbitration form, OCABR shall mail or email notice thereof to the parties. (3) Additional Claims and Amendments. Additional claims and amendments may not be submitted without approval from the arbitrator. Approval shall not be granted later than ten business days prior to the hearing. (4) Notice of Hearing. The arbitrator shall mail notice of the date, time, location of the hearing, and name of the arbitrator to both parties no later than 20 business days prior to the hearing, unless both parties agree to an earlier date acceptable to the arbitrator. (5) Hearing Date. The date of the hearing shall be fixed by the arbitrator and shall be within 90 business days of the acceptance of the request for arbitration form. The arbitrator may extend the 90 business day hearing period only upon a showing of extraordinary circumstances or upon the written consent of both parties.

14.09 Disclosure of Information

14.09: Disclosure of Information (1) Document Disclosure and Settlement of Disputes. Each party shall provide to the other party any documents or information that they intend to present at the hearing no later than ten business days before the hearing including copies of all hearing exhibits. The arbitrator shall decide any disputes over the production of information. (2) Home Inspections by Registrant. Upon reasonable request by the registrant, if such request is received no later than seven business days prior to the scheduled date of the hearing, the homeowner shall permit the registrant to inspect the residence or property that is the subject of the dispute. The homeowner shall have the right to be present at such inspection. The registrant shall use no tools other than diagnostic tools and shall not make any repairs or adjustments. (3) Prohibition Against Discovery. There shall be no discovery except as provided in 201 CMR 14.09(1) and 14.09(2), unless each party consents or unless discovery is ordered by the arbitrator for the following reasons: (a) The arbitrator finds that the discovery is likely to be necessary to render a proper arbitration decision; or (b) The arbitrator finds that the discovery is likely to be necessary for a party to present a material element of the case against the other party. (4) Additional Information Deadline. The parties shall comply with the arbitrator's requests for additional information within seven business days, or within such period as the arbitrator designates. (5) Inspections by Arbitrator. At either party's request, and if the arbitrator deems it appropriate, the arbitrator may view the residence or property that is the subject of the dispute subject to reasonable notice to both parties and with the right of both parties to be present. (6) Representation by an Attorney. Any party represented by an attorney or other authorized agent must disclose the name, address, telephone number, and email address of the representative to OCABR, the arbitrator, and the opposing side at least seven business days prior to the date for submission of documents as set forth in 201 CMR 14.09(1). 6/6/25 201 CMR - 71

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14.09 continued

14.09: continued (7) Correspondence Copies. Copies of all correspondence any party sends to the arbitrator or OCABR for the arbitrator after the acceptance of the request for arbitration shall be sent to the other party.

14.10 Rescheduling of Arbitration Hearings

14.10: Rescheduling of Arbitration Hearings (1) Rescheduling. Either party may request, in writing, to the arbitrator on no more than one occasion, that the arbitrator reschedule the arbitration hearing. Such request must be made prior to the day of the hearing and shall be granted only upon a showing of good cause. (2) New Hearing Date. If a request for rescheduling is granted, the arbitrator shall record the date the request was received, and assign a new hearing date and location if at all possible falling within the original 90 business days period provided for in 201 CMR 14.08(5). The arbitrator shall notify both parties of the new date as soon as practical and by any means appropriate for the time then remaining before the hearing. (3) Good Cause Rescheduling. The arbitrator may reschedule any hearing for good cause. If at all possible, the new hearing date shall be within the original 90 business days period provided for in 201 CMR 14.08.

14.11 Failure to Appear

14.11: Failure to Appear (1) Failure to Appear Default. If a party fails to appear at the hearing, the arbitrator may enter a finding by default against that party upon a determination that the appearing party has made a showing of sufficient facts to warrant a favorable decision. (2) Default Forgiveness. If the defaulting party, within ten business days after the hearing, demonstrates good cause to the arbitrator for failing to appear, the arbitrator may set aside the default. A new hearing may then be scheduled pursuant to 201 CMR 14.10(2) or a written hearing may be used to resolve the dispute pursuant to 201 CMR 14.07.

14.12 Withdrawal

14.12: Withdrawal (1) Arbitration Request Withdrawal. Either party may withdraw their request for arbitration at any time prior to the hearing by notice to the arbitrator and to the other party. Cases withdrawn at any time as a result of a settlement agreement between the parties may be refiled if either party fails to honor the settlement terms. (a) Withdrawals without Prejudice. A withdrawal received prior to the day of the hearing shall constitute a withdrawal without prejudice from the arbitration system. Cases must be refiled two months after the first voluntary withdrawal; however, cases refiled because a settlement agreement is not honored are not bound by this time limit. (b) Withdrawals with Prejudice. A withdrawal received on or after the day of the hearing or as a result of a default without good cause shall be a withdrawal with prejudice and may not be refiled. (c) Non-refundable Arbitration Fee. If either party withdraws their request for arbitration at any time, the arbitration fee shall not be refunded.

14.13 The Hearing

14.13: The Hearing (1) Single Arbitrator. A single arbitrator shall preside over each hearing, unless otherwise determined by OCABR. The conduct of the hearing shall encourage a full and complete disclosure of the facts. (2) Four Hour Hearing Limit. The hearing shall last no longer than four hours. If the arbitrator determines that additional time is necessary to obtain sufficient evidence to render an award, the arbitrator may extend the hearing time. The hearing may also be extended upon the agreement of each of the parties and the arbitrator. When a hearing is extended, the arbitrator may charge an hourly rate for the additional time, which will be equally shared by the parties. The arbitrator shall be required to account for the additional time in the final award. The arbitrator may not charge for site inspections and consultations and such fees will not be considered in calculating the four-hour hearing limit. 6/6/25 201 CMR - 72

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14.13 continued

14.13: continued (3) Arbitration Hearing Record. The arbitrator shall record the hearing. Said recording shall be the official record of the hearing and the parties may not make independent recordings of the hearing. Copies of the official recording may be obtained from OCABR for a nominal fee. (4) Oath. The arbitrator shall administer an oath or affirmation to each individual who testifies. (5) Evidence Presentation. The parties may introduce any relevant evidence that will assist the arbitrator in making a decision. Unduly repetitious or clearly irrelevant evidence may be excluded. It shall, however, be in the arbitrator's sole discretion whether to allow such evidence. The formal rules of evidence shall not apply. (6) Completeness Responsibility. Each party is responsible for presenting all their evidence in a concise manner on the day(s) of the hearing. (7) Questions of Opposing Party. The arbitrator shall allow each party to question the other after the party's presentation and shall allow questions of each witness after the witness' testimony. The arbitrator may question any party or witness at any time. (8) Order of Hearing. The arbitrator shall determine the order of the hearing. (9) Oral Hearing Presumption. Notwithstanding the provisions of 201 CMR 14.07, the hearing procedure presupposes that both parties and their designated agent will be present. However, within the arbitrator's discretion, either party may offer written testimony only, so long as the arbitrator and the other party are informed of such and are in receipt of the evidence at least seven business days prior to the day of the hearing. Written hearings shall be conducted pursuant to the procedures set out in 201 CMR 14.07(2). (10) Sworn Statement. All written testimony shall include a statement signed by the witness under oath that the witness' testimony is true. (11) Discretionary Arbitrator Consultations. The arbitrator may consult with the building inspector or any other expert witness for technical advice or testimony. The arbitrator shall provide a report of any such consultation to all parties. The arbitrator may, in their discretion, allow rebuttal to the report. (12) Unmanageable Hearings. After a warning, the arbitrator may terminate any hearing that becomes unmanageable due to the behavior of either party and enter judgment by default against the party whose behavior made the hearing unmanageable. (13) Additional Good Cause Hearings. For good cause shown as determined by the arbitrator, the arbitrator may schedule one additional hearing after the initial hearing within a reasonable time period as determined by the arbitrator. The arbitrator shall charge an hourly rate for their time. (14) Noncompliance Orders. If either party fails to comply with 201 CMR 14.00, the arbitrator or OCABR shall make such orders as are just.

14.14 Determining Actual Loss

14.14: Determining Actual Loss The calculation of Actual Loss for determining payments from the Guaranty Fund shall be measured by the following methods: (1) Calculation When No Work Is Performed. If the contractor, or subcontractor abandoned the contract without doing any work, the actual loss shall be the amount the homeowner paid to the contractor, or subcontractor under the terms of the contract. (2) Calculation When Some of the Work is Performed. If the contractor, or subcontractor partially and properly completed some of the work which was agreed to under the terms of the contract, the actual loss shall be totaled by adding the amount of the reasonable cost of completing the contract and, if necessary, repairing the contractor's, or subcontractor's defective performance, and by subtracting the part of the contract price that has not been paid by the owner. 6/6/25 201 CMR - 73

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14.14 continued

14.14: continued (a) Determination of Grossly Underbid Contracts. Upon a determination by the arbitrator or OCABR that the contractor, or subcontractor grossly underbid the contract with the result that competent workmanship to finish the contract will cost significantly more than the original contract price, the actual loss will not include the owner's cost to complete the contract. (b) Calculation for Grossly Underbid Contracts. Upon such a determination, the actual loss shall be the amount which the owner paid to the contractor or subcontractor, minus the value of any work properly completed, minus the cost of any materials properly used, plus, if necessary, the cost to correct that portion of the contracted work that was improperly completed. (3) Calculation When All of the Work is Performed, but Performed Incorrectly. If the contractor, or subcontractor fully but improperly completed work that was agreed to under the terms of the contract, the actual loss shall be the amount required to correct the improperly completed work.

14.15 The Decision

14.15: The Decision (1) Decision Deadline. The arbitrator shall submit an arbitration decision to OCABR no later than 30 business days from the date the hearing is closed, unless the arbitrator requests and is granted a reasonable extension by OCABR upon a showing of good cause. The OCABR shall provide a copy of the decision to both parties. (2) Form of Decision. The arbitrator shall insure that all decisions are in writing, dated and signed. The written decision shall contain a finding of facts, and a clear calculation of the monetary award, if any. If the homeowner prevails, the written decision shall include the homeowner's actual loss, if any. (3) Payment of Registrant Counterclaims. If the contractor registrant prevails on a properly filed counterclaim, the arbitrator may require the homeowner to pay the contractor a monetary amount. (4) Limitations of Arbitration Award Content. Any monetary award may include contractual damages, consequential damages, arbitration fees, and punitive damages. No monetary award shall include attorney's fees.

14.16 Disputing the Arbitrator's Decision

14.16: Disputing the Arbitrator's Decision (1) Technical Corrections. If a party contends that a technical correction is needed with respect to any award issued by an arbitrator, that party shall, within ten business days of the mailing date of the award, request in writing to the arbitrator that such a correction be made specifying the technical correction requested, and stating briefly the basis for the belief that the requested correction qualifies as a technical correction. Upon receipt of such written request, the arbitrator make the technical correction. Such request shall not stop the running of the appeal of award period specified in M.G.L. c. 142A, § 4. (2) Appeals. A dissatisfied party may file an appeal within 21 calendar days after the mailing date of the arbitrator's decision in superior or district court pursuant to M.G.L. c. 142A, § 4. The party requesting the appeal must notify OCABR if the appeal is allowed.

14.17 The Award

14.17: The Award (1) Award Completion Deadline. All monetary awards must be paid within 20 business days of the mailing date of the award. (2) Legal Status of Findings of Fact. An arbitrator's findings of fact shall be prima facie evidence in any subsequent appeal brought by either party ensuing from the matter considered in arbitration. 6/6/25 201 CMR - 74

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14.17 continued

14.17: continued (3) Homeowner Award Confirmation Notice. A prevailing homeowner shall contact OCABR no sooner than 21 business days and no later than 30 business days after the mailing date of the arbitrator's decision to confirm whether the contractor or subcontractor, has complied with the award. If no such notice is received, OCABR shall contact the homeowner promptly. If the contractor or subcontractor has not complied with the award, OCABR may then notify the home improvement contractor, or subcontractor registration authority and the attorney general in order to recommend any appropriate sanction against the contractor, or subcontractor which may be available to assure compliance of the order. (4) Extension of Award Compliance Deadline. For good cause shown, OCABR may extend the due date for compliance with the award for a reasonable period of time. Such extension shall not exceed ten business days from the original due date absent extraordinary circumstances. OCABR shall provide the extended due date and the reason for the extension to the parties in writing.

14.18 Establishment of the Guaranty Fund

14.18: Establishment of the Guaranty Fund (1) Establishment of the Guaranty Fund. Pursuant to M.G.L. c. 142A, there shall be established a Residential Contractor's Guaranty Fund within OCABR. (2) Purpose of Fund. The purpose of the fund is to compensate eligible owners for actual losses as defined by 201 CMR 14.14 and M.G.L. c. 142A incurred as a result of a registrant's conduct which has been found by an approved arbitrator or a court of competent jurisdiction to be work which is: (a) performed in a poor or unworkmanlike manner; (b) a common law violation or a violation of any statute or regulation designed for the protection of consumers, including but not limited to M.G.L. c. 93A and prohibited acts listed in M.G.L. c. 142A, § 17. (3) Fund Administrator. A Fund Administrator, appointed by the director of OCABR, shall be responsible for implementing the provisions of M.G.L. c. 142A and 201 CMR 14.00. (4) Fund Claim Requirements. A homeowner may make a claim to the fund only if the homeowner has complied with the provisions of M.G.L. c. 142A, §§ 5 and 7 and has filed their claim with the fund within seven years of the date of the contract .

14.19 Contractor Fees to the Guaranty Fund

14.19: Contractor Fees to the Guaranty Fund (1) Registrant Fees. Every person registered under M.G.L. c. 142A as a home improvement contractor, or subcontractor shall pay a fee to the Guaranty Fund with their application for registration. (2) Fee Amounts. The amount of the fee shall be determined on a sliding scale based upon the number of persons in the registrant's employ at the time of the application as follows: Number of Employees Guaranty Fund Contribution less than four $100 four to ten $200 11 to 30 $300 more than 30 $500 (3) Fee Refunds. If OCABR denies an initial application for registration, the registrant's payment to the Guaranty Fund shall be refunded. 6/6/25 201 CMR - 75

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14.19 continued

14.19: continued (4) Presumption against Multiple Fees. No registrant shall be required to pay the Guaranty Fund fee more than once unless the fund administrator makes a determination that the amount of the fund is insufficient to maintain it at a level commensurate with claims made against it. (5) Annual Fee Limitation. No registrant shall be required to pay the Guaranty Fund fee more than once in any 12-month period. (6) Additional Assessments. If the Fund Administrator determines that the amount of the fund is insufficient to maintain it at a level commensurate with claims made against it, after a public hearing and upon consultation with the Fund Administrator each registrant may be assessed an appropriate fee which shall not exceed the amount of the registrant's original assessment. (7) Suspension for Non-payment. The Fund Administrator shall recommend that the registrant's registration be suspended if the registrant fails to pay the required assessment to the Guaranty Fund within 30 days of submittal of registration application or notification of a reassessment, pursuant to 201 CMR 18.04(1)(a). (8) Administrative Penalties. Administrative penalties assessed for violations of any provisions of M.G.L. c. 142A committed by registrants or unregistered contractors shall be deposited into the Guaranty Fund. See 201 CMR 18.04(1): Administrative Penalties.

14.20 Duties of Fund Administrator

14.20: Duties of Fund Administrator (1) Notice to Contractor. No less than 30 calendar days prior to the payment of a claim, and again when a claim has been paid, the Fund Administrator shall provide written notice to the contractor, or subcontractor, or their administrator, executor or personal representative, found responsible for the claim that such payment will be, or has been made. The notice shall be sent to the last known address of the contractor, or subcontractor by certified mail, return receipt requested, and shall include information about the contractor's or subcontractor's responsibility to reimburse the fund as well as any sanctions which may be imposed pursuant to M.G.L. c. 142A for non-payment. In the case of a deceased contractor, or subcontractor, notice shall be sent to the contractor, or subcontractor's administrator, executor, or personal representative. (2) Fund Reimbursement. When a payment from the fund is awarded to an owner as a result of a claim against a registered contractor or subcontractor, the Fund Administrator shall, at their discretion: (a) require the contractor or subcontractor to reimburse the fund in full within 30 calendar days of notification that a claim has been paid; or (b) initiate an agreement with the contractor, or subcontractor allowing said contractor, or subcontractor to reimburse the fund by installment, the frequency and amount of which shall be determined by the Fund Administrator. (c) 201 CMR 14.20 does not pertain to cases where the contractor filed for bankruptcy. (3) Revocations of Registration for Non-reimbursement. If the contractor or subcontractor fails to reimburse the fund pursuant to 201 CMR 14.20(2), the Fund Administrator shall recommend that the contractor's, or subcontractor's registration be revoked pursuant to M.G.L. c. 142A and 201 CMR 18.00: Registration and Enforcement of Home Improvement Contractor Program. (4) Non-reimbursement-notification to the Attorney General. If the registrant does not reimburse the amount paid from the fund, plus interest, according to the terms as set forth by the Fund Administrator pursuant to 201 CMR 14.20(2), the Fund Administrator may notify the Attorney General who shall be authorized to initiate legal proceedings in superior court against said contractor or subcontractor for failure to reimburse the fund pursuant to M.G.L. c. 142A. 6/6/25 201 CMR - 76

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14.20 continued

14.20: continued (5) Non-reimbursement-ineligibility of Contractor to Receive Registration. If a contractor's, or subcontractor's registration is revoked pursuant to M.G.L. c. 142A, the contractor, or subcontractor will not be eligible to receive a new or renewed registration or to operate under another registration until the entire amount of the claim, plus a reasonable amount of interest to be determined by the Fund Administrator, has been repaid to the fund in full, beginning from the time said claim was disbursed from the fund. (6) Fund Administrator Reports. The Fund Administrator shall provide a written report to the director of OCABR on a semiannual basis relative to the fund. Said report shall: provide general information about the fund, including, but not limited to, investment and interest income, liquidity of funds, contractor contributions, claims and other disbursements paid from the fund relative to the health of the fund, and any recommendations pertaining to maintaining the solvency of the fund. Said report shall be made available to the general public upon request.

14.21 Payments from the Guaranty Fund

14.21: Payments from the Guaranty Fund (1) Award Amounts. The Fund Administrator may award: (a) to any claimant no more than $25,000 or the amount necessary to compensate the claimant for the claimant's actual loss, whichever is less; and (b) no more than $150,000 per 12-month period in aggregate claims which are the result of a single registrant's actions pursuant to M.G.L. c. 142A, unless the registrant has repaid the fund for the full amount required pursuant to M.G.L. c. 142A, § 8; provided, however, that it is within the discretion of the fund administrator to waive the limit of aggregate claims with cause. (2) Registered Contractor Requirement. Payments from the fund may only be awarded to an "Owner" who entered into a written contract with a registered contractor, or subcontractor, as defined in 201 CMR 14.02. (3) Unregistered Contractors. Payments from the fund may not be awarded in cases where the home improvement contractor, or subcontractor, was unregistered on the date of the contract. (4) Building Permit Requirement. Payments from the fund may not be awarded to an owner who secured their own building permit for the contracted work in dispute unless the contractor, or subcontractor failed to inform the homeowner, as required by M.G.L. c. 142A, § 2, that homeowners who secure their own permits will be so excluded from the fund. (5) Actual Loss Payments. Payments from the fund may only be awarded for actual losses as defined by 201 CMR 14.14 and M.G.L. c. 142A and may not be awarded for consequential or punitive damages, personal injury, attorney's fees, court or arbitration costs or interest. (6) Application. Payments from the fund may be awarded to an owner only after the fund administrator receives a completed application form provided by OCABR. (7) Additional Application Documents. Accompanying the application form, the homeowner shall submit a copy of any court or arbitration judgment obtained against the registrant including findings of fact and conclusions of law, if any; and evidence demonstrating that the homeowner has exhausted reasonable efforts to collect. (8) Application Review. Upon receipt by OCABR of the application with all required attachments, the Fund Administrator shall inspect all documents for their veracity. If the Fund Administrator determines that said documents verify that the owner has exhausted all reasonable efforts to collect the award without success, the fund administrator may order payment out of the Guaranty Fund for the amount of the owner's actual loss, not to exceed the statutory limit. (9) Seven-year Application Deadline. Payments from the fund may be awarded only if the Fund Administrator receives an application from the claimant within seven years of the date of the contract. 6/6/25 201 CMR - 77

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14.21 continued

14.21: continued (10) Claims Procedure for Exhausted Fund. If at any time the money deposited in the fund is insufficient to satisfy the approved claim or portion thereof, the Fund Administrator, when sufficient money has been deposited in the fund, shall satisfy the unpaid claims or portions thereof in the order that the claims were originally filed.

14.22 Miscellaneous

14.22: Miscellaneous (1) OCABR Arbitration Oversight. The OCABR shall maintain oversight responsibility to promote the fairness and efficiency of the private arbitration services program. (2) OCABR Advisory Opinions. The director of OCABR may from time to time develop internal guidelines for the operation of the private arbitration services program and may issue advisory opinions. (3) Waiver. The director of OCABR may, in their sole discretion, waive any of 201 CMR 14.00, if such waiver would be in the public interest and would further the purpose or intent of the private arbitration services program or guaranty fund, provided that such waiver does not conflict with any requirement contained in M.G.L. c. 142A. (4) Non-preclusion of Additional Remedies. A claim to the Guaranty Fund shall not limit the availability of other legal or equitable remedies unless the claim made is for the full amount of the value of the work claimed as damages, in which case the registrant, upon repayment to the fund, may use repayment as a defense via settlement. REGULATORY AUTHORITY 201 CMR 14.00: M.G.L. c. 142A and M.G.L. c. 9. (PAGES 79 THROUGH 82 ARE RESERVED FOR FUTURE USE.) 6/6/25 201 CMR - 78