The Connecticut Home Improvement Guaranty Fund, and
How You Get Access

​What is the Home Improvement Guaranty Fund?

It's a fund maintained by the state to compensate homeowners for losses or damages caused by registered contractors who fail to fulfill their contracts.

 

How Does the Fund Work?

1. Contractor Contributions: Contractors and salesmen pay annual fees into the fund as part of their licensing requirements. This ensures the fund has money available to help homeowners.

2. Eligibility for Compensation: If your contractor doesn’t complete the work, performs substandard work, or causes damages, you can file a claim to be reimbursed for your actual losses. You must first obtain a court judgment, arbitration decision, or restitution order against the contractor showing that you are owed money for damages or unfinished work.

3. Claim Process: File an application with the commissioner using the forms they provide. Include evidence such as court judgments, arbitration decisions, or proof of damages. The commissioner will review the application to ensure it’s legitimate and unpaid.

4. Maximum Payment: The fund will pay up to $25,000 per claim. If your damages exceed this, you will need to pursue additional recovery through other means.

5. Time Limit to File a Claim: You must file your application within two years of the final judgment, arbitration decision, or restitution order.

 

What Happens if the Contractor Goes Out of Business?

• The fund is specifically designed to help in cases where contractors cannot pay due to bankruptcy or other financial issues.

• Even if the contractor has no assets, the fund can compensate you up to $25,000 for proven losses.

 

Before Filing a Claim

To file a claim, you must:

1. Obtain a judgment or arbitration decision against the contractor.

2. Show that you’ve made reasonable efforts to collect payment directly from the contractor.

3. Prove the damages or unpaid amount through documentation.

Important Protections and Limits

• If multiple homeowners have claims against the same contractor and the fund doesn’t have enough money to cover all claims, payouts are processed in the order claims are received.

• If the fund is depleted, claims will be paid as more money becomes available.

After Compensation is Paid

• The state becomes responsible for recovering money from the contractor.

• The contractor may face license suspension or revocation until they repay the fund.

 

What Should You Do Now?

1. Ensure your contractor is registered and contributes to the fund. Unregistered contractors are not covered by this law.

2. Keep thorough records of your contract, payments, communications, and any damages or incomplete work.

3. If the contractor goes out of business or fails to perform, consider filing a claim with the guaranty fund after pursuing arbitration or a court judgment.

 

This law provides a safety net, but following proper procedures and acting promptly is essential to protect your rights. If you're worried your contractor might default, consult Dunigan Law today or contact Connecticut's department of consumer protection for further guidance.