diff --git a/cmd/labs/clear_cache.go b/cmd/labs/clear_cache.go
index e2f531cf..e136c13c 100644
--- a/cmd/labs/clear_cache.go
+++ b/cmd/labs/clear_cache.go
@@ -19,13 +19,17 @@ func newClearCacheCommand() *cobra.Command {
 			if err != nil {
 				return err
 			}
-			_ = os.Remove(project.PathInLabs(ctx, "databrickslabs-repositories.json"))
+			cache, err := project.PathInLabs(ctx, "databrickslabs-repositories.json")
+			if err != nil {
+				return err
+			}
+			_ = os.Remove(cache)
 			logger := log.GetLogger(ctx)
 			for _, prj := range projects {
 				logger.Info("clearing labs project cache", slog.String("name", prj.Name))
-				_ = os.RemoveAll(prj.CacheDir(ctx))
+				_ = os.RemoveAll(prj.CacheDir())
 				// recreating empty cache folder for downstream apps to work normally
-				_ = prj.EnsureFoldersExist(ctx)
+				_ = prj.EnsureFoldersExist()
 			}
 			return nil
 		},
diff --git a/cmd/labs/labs.go b/cmd/labs/labs.go
index cccf8ac4..c8c8546a 100644
--- a/cmd/labs/labs.go
+++ b/cmd/labs/labs.go
@@ -4,6 +4,7 @@ import (
 	"context"
 
 	"github.com/databricks/cli/cmd/labs/project"
+	"github.com/databricks/cli/libs/log"
 	"github.com/spf13/cobra"
 )
 
@@ -30,7 +31,8 @@ func New(ctx context.Context) *cobra.Command {
 	)
 	all, err := project.Installed(ctx)
 	if err != nil {
-		panic(err)
+		log.Errorf(ctx, "Cannot retrieve installed labs: %s", err)
+		return cmd
 	}
 	for _, v := range all {
 		v.Register(cmd)
diff --git a/cmd/labs/list.go b/cmd/labs/list.go
index 07cc180c..b9624cbb 100644
--- a/cmd/labs/list.go
+++ b/cmd/labs/list.go
@@ -16,7 +16,10 @@ type labsMeta struct {
 }
 
 func allRepos(ctx context.Context) (github.Repositories, error) {
-	cacheDir := project.PathInLabs(ctx)
+	cacheDir, err := project.PathInLabs(ctx)
+	if err != nil {
+		return nil, err
+	}
 	cache := github.NewRepositoryCache("databrickslabs", cacheDir)
 	return cache.Load(ctx)
 }
diff --git a/cmd/labs/project/entrypoint.go b/cmd/labs/project/entrypoint.go
index fedd70a4..113bf321 100644
--- a/cmd/labs/project/entrypoint.go
+++ b/cmd/labs/project/entrypoint.go
@@ -54,15 +54,15 @@ func (e *Entrypoint) NeedsWarehouse() bool {
 
 func (e *Entrypoint) Prepare(cmd *cobra.Command) (map[string]string, error) {
 	ctx := cmd.Context()
-	libDir := e.EffectiveLibDir(ctx)
+	libDir := e.EffectiveLibDir()
 	environment := map[string]string{
 		"DATABRICKS_CLI_VERSION":     build.GetInfo().Version,
-		"DATABRICKS_LABS_CACHE_DIR":  e.CacheDir(ctx),
-		"DATABRICKS_LABS_CONFIG_DIR": e.ConfigDir(ctx),
-		"DATABRICKS_LABS_STATE_DIR":  e.StateDir(ctx),
+		"DATABRICKS_LABS_CACHE_DIR":  e.CacheDir(),
+		"DATABRICKS_LABS_CONFIG_DIR": e.ConfigDir(),
+		"DATABRICKS_LABS_STATE_DIR":  e.StateDir(),
 		"DATABRICKS_LABS_LIB_DIR":    libDir,
 	}
-	if e.IsPythonProject(ctx) {
+	if e.IsPythonProject() {
 		e.preparePython(ctx, environment)
 	}
 	cfg, err := e.validLogin(cmd)
@@ -112,7 +112,7 @@ func (e *Entrypoint) preparePython(ctx context.Context, environment map[string]s
 	// Here we are also supporting the "src" layout for python projects.
 	//
 	// See https://docs.python.org/3/using/cmdline.html#envvar-PYTHONPATH
-	libDir := e.EffectiveLibDir(ctx)
+	libDir := e.EffectiveLibDir()
 	// The intention for every install is to be sandboxed - not dependent on anything else than Python binary.
 	// Having ability to override PYTHONPATH in the mix will break this assumption. Need strong evidence that
 	// this is really needed.
@@ -139,21 +139,28 @@ func (e *Entrypoint) joinPaths(paths ...string) string {
 	return strings.Join(paths, string(os.PathListSeparator))
 }
 
-func (e *Entrypoint) envAwareConfig(ctx context.Context) *config.Config {
+func (e *Entrypoint) envAwareConfig(ctx context.Context) (*config.Config, error) {
+	home, err := env.UserHomeDir(ctx)
+	if err != nil {
+		return nil, err
+	}
 	return &config.Config{
-		ConfigFile: filepath.Join(env.UserHomeDir(ctx), ".databrickscfg"),
+		ConfigFile: filepath.Join(home, ".databrickscfg"),
 		Loaders: []config.Loader{
 			env.NewConfigLoader(ctx),
 			config.ConfigAttributes,
 			config.ConfigFile,
 		},
-	}
+	}, nil
 }
 
-func (e *Entrypoint) envAwareConfigWithProfile(ctx context.Context, profile string) *config.Config {
-	cfg := e.envAwareConfig(ctx)
+func (e *Entrypoint) envAwareConfigWithProfile(ctx context.Context, profile string) (*config.Config, error) {
+	cfg, err := e.envAwareConfig(ctx)
+	if err != nil {
+		return nil, err
+	}
 	cfg.Profile = profile
-	return cfg
+	return cfg, nil
 }
 
 func (e *Entrypoint) getLoginConfig(cmd *cobra.Command) (*loginConfig, *config.Config, error) {
@@ -164,11 +171,18 @@ func (e *Entrypoint) getLoginConfig(cmd *cobra.Command) (*loginConfig, *config.C
 	profileOverride := e.profileOverride(cmd)
 	if profileOverride != "" {
 		log.Infof(ctx, "Overriding login profile: %s", profileOverride)
-		return &loginConfig{}, e.envAwareConfigWithProfile(ctx, profileOverride), nil
+		cfg, err := e.envAwareConfigWithProfile(ctx, profileOverride)
+		if err != nil {
+			return nil, nil, err
+		}
+		return &loginConfig{}, cfg, nil
 	}
 	lc, err := e.loadLoginConfig(ctx)
 	isNoLoginConfig := errors.Is(err, fs.ErrNotExist)
-	defaultConfig := e.envAwareConfig(ctx)
+	defaultConfig, err := e.envAwareConfig(ctx)
+	if err != nil {
+		return nil, nil, err
+	}
 	if isNoLoginConfig && !e.IsBundleAware && e.isAuthConfigured(defaultConfig) {
 		log.Debugf(ctx, "Login is configured via environment variables")
 		return &loginConfig{}, defaultConfig, nil
@@ -181,7 +195,11 @@ func (e *Entrypoint) getLoginConfig(cmd *cobra.Command) (*loginConfig, *config.C
 	}
 	if e.IsAccountLevel {
 		log.Debugf(ctx, "Using account-level login profile: %s", lc.AccountProfile)
-		return lc, e.envAwareConfigWithProfile(ctx, lc.AccountProfile), nil
+		cfg, err := e.envAwareConfigWithProfile(ctx, lc.AccountProfile)
+		if err != nil {
+			return nil, nil, err
+		}
+		return lc, cfg, nil
 	}
 	if e.IsBundleAware {
 		err = root.TryConfigureBundle(cmd, []string{})
@@ -194,7 +212,11 @@ func (e *Entrypoint) getLoginConfig(cmd *cobra.Command) (*loginConfig, *config.C
 		}
 	}
 	log.Debugf(ctx, "Using workspace-level login profile: %s", lc.WorkspaceProfile)
-	return lc, e.envAwareConfigWithProfile(ctx, lc.WorkspaceProfile), nil
+	cfg, err := e.envAwareConfigWithProfile(ctx, lc.WorkspaceProfile)
+	if err != nil {
+		return nil, nil, err
+	}
+	return lc, cfg, nil
 }
 
 func (e *Entrypoint) validLogin(cmd *cobra.Command) (*config.Config, error) {
diff --git a/cmd/labs/project/fetcher.go b/cmd/labs/project/fetcher.go
index b677bcd9..8f4fafde 100644
--- a/cmd/labs/project/fetcher.go
+++ b/cmd/labs/project/fetcher.go
@@ -29,7 +29,10 @@ func (d *devInstallation) Install(ctx context.Context) error {
 	}
 	_, err := d.Installer.validLogin(d.Command)
 	if errors.Is(err, ErrNoLoginConfig) {
-		cfg := d.Installer.envAwareConfig(ctx)
+		cfg, err := d.Installer.envAwareConfig(ctx)
+		if err != nil {
+			return err
+		}
 		lc := &loginConfig{Entrypoint: d.Installer.Entrypoint}
 		_, err = lc.askWorkspace(ctx, cfg)
 		if err != nil {
@@ -39,7 +42,7 @@ func (d *devInstallation) Install(ctx context.Context) error {
 		if err != nil {
 			return fmt.Errorf("ask for account: %w", err)
 		}
-		err = lc.EnsureFoldersExist(ctx)
+		err = lc.EnsureFoldersExist()
 		if err != nil {
 			return fmt.Errorf("folders: %w", err)
 		}
@@ -97,7 +100,10 @@ func NewUpgrader(cmd *cobra.Command, name string) (*installer, error) {
 	if err != nil {
 		return nil, fmt.Errorf("remote: %w", err)
 	}
-	prj.folder = PathInLabs(cmd.Context(), name)
+	prj.folder, err = PathInLabs(cmd.Context(), name)
+	if err != nil {
+		return nil, err
+	}
 	return &installer{
 		Project: prj,
 		version: version,
@@ -111,7 +117,10 @@ type fetcher struct {
 
 func (f *fetcher) checkReleasedVersions(cmd *cobra.Command, version string) (string, error) {
 	ctx := cmd.Context()
-	cacheDir := PathInLabs(ctx, f.name, "cache")
+	cacheDir, err := PathInLabs(ctx, f.name, "cache")
+	if err != nil {
+		return "", err
+	}
 	// `databricks labs isntall X` doesn't know which exact version to fetch, so first
 	// we fetch all versions and then pick the latest one dynamically.
 	versions, err := github.NewReleaseCache("databrickslabs", f.name, cacheDir).Load(ctx)
diff --git a/cmd/labs/project/helpers.go b/cmd/labs/project/helpers.go
index 9117d875..118c0ff0 100644
--- a/cmd/labs/project/helpers.go
+++ b/cmd/labs/project/helpers.go
@@ -12,10 +12,13 @@ import (
 	"github.com/databricks/cli/libs/env"
 )
 
-func PathInLabs(ctx context.Context, dirs ...string) string {
-	homdeDir := env.UserHomeDir(ctx)
-	prefix := []string{homdeDir, ".databricks", "labs"}
-	return filepath.Join(append(prefix, dirs...)...)
+func PathInLabs(ctx context.Context, dirs ...string) (string, error) {
+	homeDir, err := env.UserHomeDir(ctx)
+	if err != nil {
+		return "", err
+	}
+	prefix := []string{homeDir, ".databricks", "labs"}
+	return filepath.Join(append(prefix, dirs...)...), nil
 }
 
 func tryLoadAndParseJSON[T any](jsonFile string) (*T, error) {
diff --git a/cmd/labs/project/installed.go b/cmd/labs/project/installed.go
index 77fee544..9a98a780 100644
--- a/cmd/labs/project/installed.go
+++ b/cmd/labs/project/installed.go
@@ -9,6 +9,7 @@ import (
 	"path/filepath"
 
 	"github.com/databricks/cli/folders"
+	"github.com/databricks/cli/libs/env"
 	"github.com/databricks/cli/libs/log"
 )
 
@@ -26,7 +27,13 @@ func projectInDevMode(ctx context.Context) (*Project, error) {
 }
 
 func Installed(ctx context.Context) (projects []*Project, err error) {
-	labsDir, err := os.ReadDir(PathInLabs(ctx))
+	root, err := PathInLabs(ctx)
+	if errors.Is(err, env.ErrNoHomeEnv) {
+		return nil, nil
+	} else if err != nil {
+		return nil, err
+	}
+	labsDir, err := os.ReadDir(root)
 	if err != nil && !errors.Is(err, fs.ErrNotExist) {
 		return nil, err
 	}
@@ -44,7 +51,7 @@ func Installed(ctx context.Context) (projects []*Project, err error) {
 		if projectDev != nil && v.Name() == projectDev.Name {
 			continue
 		}
-		labsYml := PathInLabs(ctx, v.Name(), "lib", "labs.yml")
+		labsYml := filepath.Join(root, v.Name(), "lib", "labs.yml")
 		prj, err := Load(ctx, labsYml)
 		if errors.Is(err, fs.ErrNotExist) {
 			continue
diff --git a/cmd/labs/project/installer.go b/cmd/labs/project/installer.go
index 2e09ed37..fa676819 100644
--- a/cmd/labs/project/installer.go
+++ b/cmd/labs/project/installer.go
@@ -55,7 +55,7 @@ func (h *hook) runHook(cmd *cobra.Command) error {
 	if err != nil {
 		return fmt.Errorf("prepare: %w", err)
 	}
-	libDir := h.EffectiveLibDir(ctx)
+	libDir := h.EffectiveLibDir()
 	args := []string{}
 	if strings.HasSuffix(h.Script, ".py") {
 		args = append(args, h.virtualEnvPython(ctx))
@@ -80,14 +80,20 @@ type installer struct {
 }
 
 func (i *installer) Install(ctx context.Context) error {
-	err := i.EnsureFoldersExist(ctx)
+	err := i.EnsureFoldersExist()
 	if err != nil {
 		return fmt.Errorf("folders: %w", err)
 	}
-	i.folder = PathInLabs(ctx, i.Name)
+	i.folder, err = PathInLabs(ctx, i.Name)
+	if err != nil {
+		return err
+	}
 	w, err := i.login(ctx)
 	if err != nil && errors.Is(err, databrickscfg.ErrNoConfiguration) {
-		cfg := i.Installer.envAwareConfig(ctx)
+		cfg, err := i.Installer.envAwareConfig(ctx)
+		if err != nil {
+			return err
+		}
 		w, err = databricks.NewWorkspaceClient((*databricks.Config)(cfg))
 		if err != nil {
 			return fmt.Errorf("no ~/.databrickscfg: %w", err)
@@ -138,7 +144,7 @@ func (i *installer) warningf(text string, v ...any) {
 }
 
 func (i *installer) cleanupLib(ctx context.Context) error {
-	libDir := i.LibDir(ctx)
+	libDir := i.LibDir()
 	err := os.RemoveAll(libDir)
 	if err != nil {
 		return fmt.Errorf("remove all: %w", err)
@@ -157,7 +163,10 @@ func (i *installer) login(ctx context.Context) (*databricks.WorkspaceClient, err
 	}
 	cfg, err := i.metaEntrypoint(ctx).validLogin(i.cmd)
 	if errors.Is(err, ErrNoLoginConfig) {
-		cfg = i.Installer.envAwareConfig(ctx)
+		cfg, err = i.Installer.envAwareConfig(ctx)
+		if err != nil {
+			return nil, err
+		}
 	} else if err != nil {
 		return nil, fmt.Errorf("valid: %w", err)
 	}
@@ -188,7 +197,7 @@ func (i *installer) downloadLibrary(ctx context.Context) error {
 	if err != nil {
 		return fmt.Errorf("cleanup: %w", err)
 	}
-	libTarget := i.LibDir(ctx)
+	libTarget := i.LibDir()
 	// we may support wheels, jars, and golang binaries. but those are not zipballs
 	if i.IsZipball() {
 		feedback <- fmt.Sprintf("Downloading and unpacking zipball for %s", i.version)
@@ -254,10 +263,10 @@ func (i *installer) setupPythonVirtualEnvironment(ctx context.Context, w *databr
 }
 
 func (i *installer) installPythonDependencies(ctx context.Context, spec string) error {
-	if !i.IsPythonProject(ctx) {
+	if !i.IsPythonProject() {
 		return nil
 	}
-	libDir := i.LibDir(ctx)
+	libDir := i.LibDir()
 	log.Debugf(ctx, "Installing Python dependencies for: %s", libDir)
 	// maybe we'll need to add call one of the two scripts:
 	// - python3 -m ensurepip --default-pip
@@ -281,6 +290,6 @@ func (i *installer) runInstallHook(ctx context.Context) error {
 	if i.Installer.Script == "" {
 		return nil
 	}
-	log.Debugf(ctx, "Launching installer script %s in %s", i.Installer.Script, i.LibDir(ctx))
+	log.Debugf(ctx, "Launching installer script %s in %s", i.Installer.Script, i.LibDir())
 	return i.Installer.runHook(i.cmd)
 }
diff --git a/cmd/labs/project/installer_test.go b/cmd/labs/project/installer_test.go
index b61026f2..60af43c6 100644
--- a/cmd/labs/project/installer_test.go
+++ b/cmd/labs/project/installer_test.go
@@ -105,7 +105,7 @@ func installerContext(t *testing.T, server *httptest.Server) context.Context {
 	ctx = github.WithUserContentOverride(ctx, server.URL)
 	ctx = env.WithUserHomeDir(ctx, t.TempDir())
 	// trick release cache to thing it went to github already
-	cachePath := project.PathInLabs(ctx, "blueprint", "cache")
+	cachePath, _ := project.PathInLabs(ctx, "blueprint", "cache")
 	err := os.MkdirAll(cachePath, ownerRWXworldRX)
 	require.NoError(t, err)
 	bs := []byte(`{"refreshed_at": "2033-01-01T00:00:00.92857+02:00","data": [{"tag_name": "v0.3.15"}]}`)
@@ -317,8 +317,8 @@ func TestInstallerWorksForDevelopment(t *testing.T) {
 
 	// development installer assumes it's in the active virtualenv
 	ctx = env.Set(ctx, "PYTHON_BIN", py)
-
-	err = os.WriteFile(filepath.Join(env.UserHomeDir(ctx), ".databrickscfg"), []byte(fmt.Sprintf(`
+	home, _ := env.UserHomeDir(ctx)
+	err = os.WriteFile(filepath.Join(home, ".databrickscfg"), []byte(fmt.Sprintf(`
 [profile-one]
 host = %s
 token = ...
@@ -399,7 +399,7 @@ func TestUpgraderWorksForReleases(t *testing.T) {
 	py, _ = filepath.Abs(py)
 	ctx = env.Set(ctx, "PYTHON_BIN", py)
 
-	cachePath := project.PathInLabs(ctx, "blueprint", "cache")
+	cachePath, _ := project.PathInLabs(ctx, "blueprint", "cache")
 	bs := []byte(`{"refreshed_at": "2033-01-01T00:00:00.92857+02:00","data": [{"tag_name": "v0.4.0"}]}`)
 	err := os.WriteFile(filepath.Join(cachePath, "databrickslabs-blueprint-releases.json"), bs, ownerRW)
 	require.NoError(t, err)
diff --git a/cmd/labs/project/project.go b/cmd/labs/project/project.go
index 6adf9a3c..75f5e584 100644
--- a/cmd/labs/project/project.go
+++ b/cmd/labs/project/project.go
@@ -49,6 +49,11 @@ func readFromBytes(ctx context.Context, labsYmlRaw []byte) (*Project, error) {
 	if project.Uninstaller != nil {
 		project.Uninstaller.Entrypoint = e
 	}
+	rootDir, err := PathInLabs(ctx, project.Name)
+	if err != nil {
+		return nil, err
+	}
+	project.rootDir = rootDir
 	return &project, nil
 }
 
@@ -63,7 +68,8 @@ type Project struct {
 	MinPython   string   `yaml:"min_python"`
 	Commands    []*proxy `yaml:"commands,omitempty"`
 
-	folder string
+	folder  string
+	rootDir string
 }
 
 func (p *Project) IsZipball() bool {
@@ -108,22 +114,22 @@ func (p *Project) fileExists(name string) bool {
 	return err == nil
 }
 
-func (p *Project) projectFilePath(ctx context.Context, name string) string {
-	return filepath.Join(p.EffectiveLibDir(ctx), name)
+func (p *Project) projectFilePath(name string) string {
+	return filepath.Join(p.EffectiveLibDir(), name)
 }
 
-func (p *Project) IsPythonProject(ctx context.Context) bool {
-	if p.fileExists(p.projectFilePath(ctx, "setup.py")) {
+func (p *Project) IsPythonProject() bool {
+	if p.fileExists(p.projectFilePath("setup.py")) {
 		return true
 	}
-	if p.fileExists(p.projectFilePath(ctx, "pyproject.toml")) {
+	if p.fileExists(p.projectFilePath("pyproject.toml")) {
 		return true
 	}
 	return false
 }
 
-func (p *Project) IsDeveloperMode(ctx context.Context) bool {
-	return p.folder != "" && !strings.HasPrefix(p.LibDir(ctx), p.folder)
+func (p *Project) IsDeveloperMode() bool {
+	return p.folder != "" && !strings.HasPrefix(p.LibDir(), p.folder)
 }
 
 func (p *Project) HasFolder() bool {
@@ -161,36 +167,32 @@ func (p *Project) Register(parent *cobra.Command) {
 	}
 }
 
-func (p *Project) rootDir(ctx context.Context) string {
-	return PathInLabs(ctx, p.Name)
+func (p *Project) CacheDir() string {
+	return filepath.Join(p.rootDir, "cache")
 }
 
-func (p *Project) CacheDir(ctx context.Context) string {
-	return filepath.Join(p.rootDir(ctx), "cache")
+func (p *Project) ConfigDir() string {
+	return filepath.Join(p.rootDir, "config")
 }
 
-func (p *Project) ConfigDir(ctx context.Context) string {
-	return filepath.Join(p.rootDir(ctx), "config")
+func (p *Project) LibDir() string {
+	return filepath.Join(p.rootDir, "lib")
 }
 
-func (p *Project) LibDir(ctx context.Context) string {
-	return filepath.Join(p.rootDir(ctx), "lib")
-}
-
-func (p *Project) EffectiveLibDir(ctx context.Context) string {
-	if p.IsDeveloperMode(ctx) {
+func (p *Project) EffectiveLibDir() string {
+	if p.IsDeveloperMode() {
 		// developer is working on a local checkout, that is not inside of installed root
 		return p.folder
 	}
-	return p.LibDir(ctx)
+	return p.LibDir()
 }
 
-func (p *Project) StateDir(ctx context.Context) string {
-	return filepath.Join(p.rootDir(ctx), "state")
+func (p *Project) StateDir() string {
+	return filepath.Join(p.rootDir, "state")
 }
 
-func (p *Project) EnsureFoldersExist(ctx context.Context) error {
-	dirs := []string{p.CacheDir(ctx), p.ConfigDir(ctx), p.LibDir(ctx), p.StateDir(ctx)}
+func (p *Project) EnsureFoldersExist() error {
+	dirs := []string{p.CacheDir(), p.ConfigDir(), p.LibDir(), p.StateDir()}
 	for _, v := range dirs {
 		err := os.MkdirAll(v, ownerRWXworldRX)
 		if err != nil {
@@ -209,11 +211,11 @@ func (p *Project) Uninstall(cmd *cobra.Command) error {
 	}
 	ctx := cmd.Context()
 	log.Infof(ctx, "Removing project: %s", p.Name)
-	return os.RemoveAll(p.rootDir(ctx))
+	return os.RemoveAll(p.rootDir)
 }
 
 func (p *Project) virtualEnvPath(ctx context.Context) string {
-	if p.IsDeveloperMode(ctx) {
+	if p.IsDeveloperMode() {
 		// When a virtual environment has been activated, the VIRTUAL_ENV environment variable
 		// is set to the path of the environment. Since explicitly activating a virtual environment
 		// is not required to use it, VIRTUAL_ENV cannot be relied upon to determine whether a virtual
@@ -225,14 +227,14 @@ func (p *Project) virtualEnvPath(ctx context.Context) string {
 			logger.Debugf(ctx, "(development mode) using active virtual environment from: %s", activatedVenv)
 			return activatedVenv
 		}
-		nonActivatedVenv, err := python.DetectVirtualEnvPath(p.EffectiveLibDir(ctx))
+		nonActivatedVenv, err := python.DetectVirtualEnvPath(p.EffectiveLibDir())
 		if err == nil {
 			logger.Debugf(ctx, "(development mode) using virtual environment from: %s", nonActivatedVenv)
 			return nonActivatedVenv
 		}
 	}
 	// by default, we pick Virtual Environment from DATABRICKS_LABS_STATE_DIR
-	return filepath.Join(p.StateDir(ctx), "venv")
+	return filepath.Join(p.StateDir(), "venv")
 }
 
 func (p *Project) virtualEnvPython(ctx context.Context) string {
@@ -247,13 +249,13 @@ func (p *Project) virtualEnvPython(ctx context.Context) string {
 }
 
 func (p *Project) loginFile(ctx context.Context) string {
-	if p.IsDeveloperMode(ctx) {
+	if p.IsDeveloperMode() {
 		// developers may not want to pollute the state in
 		// ~/.databricks/labs/X/config while the version is not yet
 		// released
-		return p.projectFilePath(ctx, ".databricks-login.json")
+		return p.projectFilePath(".databricks-login.json")
 	}
-	return filepath.Join(p.ConfigDir(ctx), "login.json")
+	return filepath.Join(p.ConfigDir(), "login.json")
 }
 
 func (p *Project) loadLoginConfig(ctx context.Context) (*loginConfig, error) {
@@ -268,11 +270,11 @@ func (p *Project) loadLoginConfig(ctx context.Context) (*loginConfig, error) {
 }
 
 func (p *Project) versionFile(ctx context.Context) string {
-	return filepath.Join(p.StateDir(ctx), "version.json")
+	return filepath.Join(p.StateDir(), "version.json")
 }
 
 func (p *Project) InstalledVersion(ctx context.Context) (*version, error) {
-	if p.IsDeveloperMode(ctx) {
+	if p.IsDeveloperMode() {
 		return &version{
 			Version: "*",
 			Date:    time.Now(),
@@ -300,12 +302,12 @@ func (p *Project) writeVersionFile(ctx context.Context, ver string) error {
 // giving users hints when they need to update their installations.
 func (p *Project) checkUpdates(cmd *cobra.Command) error {
 	ctx := cmd.Context()
-	if p.IsDeveloperMode(ctx) {
+	if p.IsDeveloperMode() {
 		// skipping update check for projects in developer mode, that
 		// might not be installed yet
 		return nil
 	}
-	r := github.NewReleaseCache("databrickslabs", p.Name, p.CacheDir(ctx))
+	r := github.NewReleaseCache("databrickslabs", p.Name, p.CacheDir())
 	versions, err := r.Load(ctx)
 	if err != nil {
 		return err
diff --git a/cmd/labs/project/proxy.go b/cmd/labs/project/proxy.go
index ae7df286..d872560a 100644
--- a/cmd/labs/project/proxy.go
+++ b/cmd/labs/project/proxy.go
@@ -60,7 +60,7 @@ func (cp *proxy) runE(cmd *cobra.Command, _ []string) error {
 		cmd.OutOrStdout(),
 		cmd.ErrOrStderr(),
 		process.WithEnvs(envs))
-	if errors.Is(err, fs.ErrNotExist) && cp.IsPythonProject(ctx) {
+	if errors.Is(err, fs.ErrNotExist) && cp.IsPythonProject() {
 		msg := "cannot find Python %s. Please re-run: databricks labs install %s"
 		return fmt.Errorf(msg, cp.MinPython, cp.Name)
 	}
@@ -113,9 +113,9 @@ func (cp *proxy) commandInput(cmd *cobra.Command) ([]string, error) {
 	}
 	args := []string{}
 	ctx := cmd.Context()
-	if cp.IsPythonProject(ctx) {
+	if cp.IsPythonProject() {
 		args = append(args, cp.virtualEnvPython(ctx))
-		libDir := cp.EffectiveLibDir(cmd.Context())
+		libDir := cp.EffectiveLibDir()
 		entrypoint := filepath.Join(libDir, cp.Main)
 		args = append(args, entrypoint)
 	}
diff --git a/cmd/labs/show.go b/cmd/labs/show.go
index fc9d175c..1ae6498c 100644
--- a/cmd/labs/show.go
+++ b/cmd/labs/show.go
@@ -37,7 +37,7 @@ func newShowCommand() *cobra.Command {
 			}
 			name := args[0]
 			for _, v := range installed {
-				isDev := name == "." && v.IsDeveloperMode(ctx)
+				isDev := name == "." && v.IsDeveloperMode()
 				isMatch := name == v.Name
 				if !(isDev || isMatch) {
 					continue
@@ -45,10 +45,10 @@ func newShowCommand() *cobra.Command {
 				return cmdio.Render(ctx, map[string]any{
 					"name":        v.Name,
 					"description": v.Description,
-					"cache_dir":   v.CacheDir(ctx),
-					"config_dir":  v.ConfigDir(ctx),
-					"lib_dir":     v.EffectiveLibDir(ctx),
-					"is_python":   v.IsPythonProject(ctx),
+					"cache_dir":   v.CacheDir(),
+					"config_dir":  v.ConfigDir(),
+					"lib_dir":     v.EffectiveLibDir(),
+					"is_python":   v.IsPythonProject(),
 				})
 			}
 			return nil
diff --git a/libs/databrickscfg/profiles.go b/libs/databrickscfg/profiles.go
index 9f31eff6..c7bb2719 100644
--- a/libs/databrickscfg/profiles.go
+++ b/libs/databrickscfg/profiles.go
@@ -76,7 +76,10 @@ func GetPath(ctx context.Context) (string, error) {
 		configFile = "~/.databrickscfg"
 	}
 	if strings.HasPrefix(configFile, "~") {
-		homedir := env.UserHomeDir(ctx)
+		homedir, err := env.UserHomeDir(ctx)
+		if err != nil {
+			return "", err
+		}
 		configFile = filepath.Join(homedir, configFile[1:])
 	}
 	return configFile, nil
@@ -108,7 +111,11 @@ func LoadProfiles(ctx context.Context, fn ProfileMatchFunction) (file string, pr
 	// Replace homedir with ~ if applicable.
 	// This is to make the output more readable.
 	file = filepath.Clean(f.Path())
-	homedir := filepath.Clean(env.UserHomeDir(ctx))
+	home, err := env.UserHomeDir(ctx)
+	if err != nil {
+		return "", nil, err
+	}
+	homedir := filepath.Clean(home)
 	if strings.HasPrefix(file, homedir) {
 		file = "~" + file[len(homedir):]
 	}
diff --git a/libs/env/context.go b/libs/env/context.go
index 84518ad7..af4d1afa 100644
--- a/libs/env/context.go
+++ b/libs/env/context.go
@@ -2,7 +2,7 @@ package env
 
 import (
 	"context"
-	"fmt"
+	"errors"
 	"os"
 	"runtime"
 	"strings"
@@ -76,12 +76,15 @@ func WithUserHomeDir(ctx context.Context, value string) context.Context {
 	return Set(ctx, homeEnvVar(), value)
 }
 
-func UserHomeDir(ctx context.Context) string {
+// ErrNoHomeEnv indicates the absence of $HOME env variable
+var ErrNoHomeEnv = errors.New("$HOME is not set")
+
+func UserHomeDir(ctx context.Context) (string, error) {
 	home := Get(ctx, homeEnvVar())
 	if home == "" {
-		panic(fmt.Errorf("$HOME is not set"))
+		return "", ErrNoHomeEnv
 	}
-	return home
+	return home, nil
 }
 
 // All returns environment variables that are defined in both os.Environ
diff --git a/libs/env/context_test.go b/libs/env/context_test.go
index 5befe4ac..28a8d880 100644
--- a/libs/env/context_test.go
+++ b/libs/env/context_test.go
@@ -51,6 +51,7 @@ func TestContext(t *testing.T) {
 func TestHome(t *testing.T) {
 	ctx := context.Background()
 	ctx = WithUserHomeDir(ctx, "...")
-	home := UserHomeDir(ctx)
+	home, err := UserHomeDir(ctx)
 	assert.Equal(t, "...", home)
+	assert.NoError(t, err)
 }