New Jersey Contractors Consumer Fraud Issues

Our attorneys help New Jersey home improvement and home repair contractors comply with New Jersey’s consumer fraud laws and regulations, and represent them in defense of lawsuits for alleged violations.

In 2005, the Legislature made home repair and home improvement contractors subject to the New Jersey Consumer Fraud Act. The Department of Consumer Affairs has also issued regulators applying the Act strictly to these contractors.

A wide variety of businesses are considered to be New Jersey home improvement contractors or home repair contractors. Some are surprising. They include, unsuprisingly, general contractors, and subcontractors, but also include businesses as varied as cabinet installers, roofers, plumbers and electricians. The Consumer Fraud regulations also include some businesses not typically thought of as doing home improvements, such as landscapers and managers of real estate investment or management companies who oversee renovations or hire subcontractors.

There are exemptions, however, where certain contractors are not covered by these laws, and our attorneys aggressively assert these as defenses.

To avoid consumer fraud violations, New Jersey home repair contractors and home improvement contractors must:

• Register annually with the Department of Community Affairs
• The statements they make in the registration must be truthful
• Contractors must display their registration number on their contracts and other documents
• They must maintain liability and other insurance
• Have a written, signed contract containing specifically required information, which is legible and accurate; thus not misrepresent anything
• All change orders must be signed and in writing
• Contractors must disclose and provide copies of all warranties
• They must include required language with the consumer’s right to cancel the contract
• Contractors must obtain all required permits before starting work
• Contractors cannot substitute materials without the homeowner’s written consent
• They may not engage in any misleading act or omission or fail to include any term or cost in the written, signed contract
• Contractors cannot use any pressure tactics or misrepresent a competitor’s work
• Contractor must give notice of delays beyond their contractor’s control, such as strikes, weather or acts of God

Registration can be denied for a variety reasons, such as conviction of crimes of “moral turpitude” or repeated instances of negligence. However, denials can be appealed.

If a contractor is found to have violated these regulations, it is a violation of the Act, which entitles the homeowner to triple damages plus having the contractor pay her attorneys fees. Another problem is that some homeowners assert these regulations as a defense to payment, even though the contractor did a great job; if there is a violation, there is a chance that the contractor may be denied any recovery and still be liable for damages and attorneys fees.

This is a drastic outcome, especially for a small business. The best thing to do is to ensure that the contract complies with these laws.

We defend home improvement and home repair contractors which are sued because of alleged violation of New Jersey’s consumer fraud laws and regulations. We also represent contractors who are suing for collection of unpaid bills, and are countersued as a homeowner’s tactic to avoid paying for the work. To learn more about what we can do to help, please e-mail us or call (973) 890-0004.