On February 2, 2025, the Affordable Homes Act of 2024 (G.L. c. 40A s. 3) went into effect in Massachusetts, amending the pre-existing Zoning Act and expanding housing opportunities across the state with the goal of addressing the affordable housing crisis. A central piece of the new law is the statewide legalization of Accessory Dwelling Units (ADUs). ADUs – also known as “Granny Flats” or “In-law Suites” are small, self-contained apartments that can be created within, attached to, or detached from a single-family home. By allowing ADUs “by right,” the law eliminates the need to apply for costly and time-consuming special permits and removes barriers like owner-occupancy requirements. The goal is to give homeowners more flexibility, create space for multigenerational living, and open new rental options while ensuring municipalities cannot use zoning to unreasonably restrict ADUs. For contractors and builders, this innovative law creates a potential new market to capitalize on smaller scale residential projects.
Under the new statute, an ADU must be:
- A complete living unit, including sleeping, cooking, and sanitary facilities;
- On the same lot as the primary home;
- Must have a separate entrance; and
- Cannot exceed the smaller of 900 square feet or 50% of the main dwelling’s gross floor area (whichever is smaller).
Municipalities may enforce additional reasonable limits, such as setbacks, height restrictions, parking rules, and septic compliance, but they cannot prohibit ADUs outright or impose rules that make them impractical. For example, short-term rentals may be reasonably restricted locally, but otherwise, homeowners across the state now have the legal right to add these units as long as they meet building and health codes. The statute’s regulations go so far as to prohibit certain local regulations outright, including requirements that either the ADU or the principal dwelling be owner-occupied, or that additional parking be provided beyond what the law already requires.
While the new ADU market is appealing, contractors and builders must be careful not to overlook their potential obligations under the Home Improvement Contractor statute (HIC), G.L. c. 142A. The HIC governs contracts for residential contracting work on existing, owner-occupied residences with four or fewer units when the work exceeds $1,000. Accordingly, where an ADU is within or attached to a residence, and is owner-occupied, c. 142A likely applies as work to an “existing” residence. It is unclear whether c. 142A would also apply to the construction of a new, detached ADU where an existing residence is present, and as such, contractors should be sure to consult the proper professionals before proceeding.
Failure to comply with c. 142A can expose contractors to treble damages, attorney’s fees, administrative penalties, or even loss of their HIC registration. To avoid liability, every written HIC contract must include:
- The contractor’s and subcontractors’ registration numbers
- Start and completion dates for the work
- A clear description of the work and materials
- The total price and payment schedule
- Required consumer protection notices, including the homeowner’s three-day right to cancel
- A summary of the homeowner’s rights under c. 142A and express warranties
In addition to the contractual requirements noted above, contractors are also prohibited from engaging in “deceptive practices” such as working without registration, misrepresenting credentials, abandoning projects without cause, or deviating from plans without homeowner consent. The statute further establishes the Residential Contractor’s Guaranty Fund, which can compensate homeowners for unpaid judgments — and contractors who fail to reimburse the Fund risk suspension or revocation of their registration.
Recent amendments to c. 142A expand homeowner protections even further: arbitration claims may now be filed within five years (instead of two), the maximum payout from the Guaranty Fund has increased to $25,000 per claim (up from $10,000), and new CORI check provisions apply to contractor registrations.
Bottom line for contractors and builders: the legalization of ADUs represents an exciting new source of business, but any contractor taking on these projects must ensure their contracts are fully compliant with c. 142A. Doing so will not only protect homeowners but also safeguard contractors from steep penalties, disputes, and reputational harm.
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This alert is for informational purposes only and may be considered advertising. It does not constitute the rendering of legal, tax, or professional advice or services. You should seek specific detailed legal advice prior to taking any definitive actions.