[mass] Contractor Went Outside The Building Permit And Town Forced Me To Build A New Home. His Insurance Just Denied My Claim. What Can I Do?

Location: Massachusetts

I hired a contractor to replace my roof, redo the flooring, remodel my kitchen, and redo the bathroom in preparation to sell the home eventually. The home was built in the early 50’s, I had lived in it for 12 years, and it needed some good upkeep but wasn’t in terrible shape. Said contractor was a good friend of mine who I’ve known for 25 years. He runs his own business building homes, porches, and remodeling. I took out a home equity loan to pay for the repairs and gave $20k to the him as a deposit. I did not sign an official contract or have a formal estimate (text messages only) since I knew him already and have seen the work he had done on other homes and fully trusted him. I obtained a building permit in my name for all the work. This was all done in November of 2024.

During the demolition process he called me out to the house to show me that two of the walls were leaning after the roof came off and one of them had a little rot. We had the discussion that I wasn’t looking to put much more money into this but it would be much better to replace the exterior walls, install new windows, and bring everything up to code. I agreed with him and told him I would call the building inspector the next day to see what to do about the permit. Left a message for the inspector at 9AM the next morning and he called me back around 2PM to indicate I just needed to file a building permit addendum to cover the scope of the additional work. Told him I would stop by town hall the next day to fill out the addendum in person.

A few hours later is when the bombshell hit. I got a call back from the building inspector saying that there must have been a huge miscommunication because the building commissioner drove past my house and saw that there were no walls up anymore and my home was just a flooring platform on top of my foundation. Immediately called my contractor and he confirmed that he and his crew dropped my exterior walls already and got a visit from the commissioner who promptly provided a cease and desist order since work was down outside of the original building permit.

From there I fought with the town for about 2.5 months because their position was that since I had no exterior walls this was no longer a building permit addendum it had to be a new home application where I needed to build everything brand new from the ground up. This was devastating to me and basically worst case scenario. I was never planning on this to happen, had limited savings, and had no clue what to do.

Ended up applying for and getting a construction loan so that I could move forward with the new home application in order to have a place to live again. This was not easy in Massachusetts and there were a lot of hoops to jump through. I am still not in the home yet and living with a friend about 45 min away.

I filed a claim with the contractors insurance company in Feb. 2025. This part was super frustrating because there was a massive lack of communication on their end through the entire process. I gave them all the text messages for the agreed upon work and a rough estimate he put together. Also provided text messages to him admitting fault and apologizing to me saying he never thought this would happen and had never seen this before. The insurance company hired independent adjusters, reached out to the town to confirm what happened, obtained recorded statements from the contractor and I. Contractor informed me that he fully admitted fault to the insurance company and I have no reason not to believe him. The “investigation” went on for a year and a few months (with massive gaps in communication from them any time I contacted them). I reached out again a few weeks ago and got a bounce back email saying that the claims agent no longer worked for the company. Called the general number and was given the contact info for the new claims person. Spoke with him and he said he should have an update for me in a week or two.

I received the denial letter yesterday. This was absolutely devastating to me and I have no clue how they can deny the claim when they have proof that this was their contractors fault, he admitted fault to them etc.

I have had loss of use of the home coming up on two years now, I am dead broke, credit cards maxed out, no more saving, and am now in massive debt with this construction loan etc. The amount I got approved for on the construction loan did not cover everything that needed to be done so I have been pouring all of my money into this just to get back into my home. I was praying that the insurance claim came through so I could recoup some of what I’ve lost.

What do I do at this point??