As we swing into the springtime, many people have work performed on their homes. Fortunately, under New Jersey state law there is protection for homeowners who enter into contracts with home improvement contractors. New Jersey has promulgated the Consumer Fraud Act for the protection of consumers in various types of transactions. One type of transaction to which consumers are entitled to protection under this Act is home improvement contracts.
“Home-improvement contracts” are any type of contract in which improvements are made to the home of a consumer. When such a contract is entered into between a consumer homeowner and a “home improvement contractor,” certain information and language must be contained within the form of the contract to ensure that consumers within the State of New Jersey are adequately protected from potentially fraudulent and/or “fly-by-night” companies.
The most important aspect of the Consumer Fraud regulations as they apply to home improvement contracts is the necessity for the contract to be in writing and for the written contract to include various pieces of information. The contract shall contain the contractor’s legal name, address and registration number; a copy of the contractor’s certificate of insurance; the total price of the contract including any finance charges; the right to cancel within a three day period; and a full and complete detailed description of the work with part numbers and manufacturers’ names if any equipment is to be installed. If the work under the contract requires permits from the local municipality, it is the obligation of the home improvement contractor to obtain same and insure that any such permit applications are closed out at the completion of the job. Importantly, the regulations prevent any home improvement contractor from demanding final payment of the contract unless and until any such permit applications are closed out to the satisfaction of the local municipality. Basically, all of these requirements are to prevent any confusion as to the terms and nature of the contract between the homeowner and the contractor.
The good news for homeowners is that, in the event a home improvement contractor violates any of the terms of these regulations and such violation causes monetary damages to the homeowner, the homeowner may be entitled to triple the amount of damages together with counsel fees in the event the homeowner is required to bring a lawsuit against the contractor. Unfortunately, as I have seen many times in my practice, despite the fact that regulations are in place to protect the homeowner, oftentimes the contractor does not have sufficient assets to pay to the homeowner even if the homeowner wins their case in court.
Importantly, based on all the above, I recommend to my clients that they utilize a home improvement contractor who has been in business for a number of years and has a long-lasting reputation in the community. First and foremost, if the contractor has such a reputation, the chances are that the work will be satisfactory. Second, in the event something does go wrong with the job, the contractor will have the assets to make the homeowner whole.
If you believe you have been the victim of some type of consumer fraud, please do not hesitate to contact my office to discuss this matter with an attorney.