NJ Home Improvement Fraud
New Jersey Home improvement industry is strictly regulated. The penalties for failing to abide by the law can be extremely severe for contractors and the law is favorable to consumers.
A publication by the New Jersey State Bar Foundation, Residential Construction and Renovation, is a great source for obtaining basic information in this field of law.
New Jersey Consumer Fraud Act
The New Jersey Consumer Fraud Act (CFA), N.J.S.A. § 56:8-1, et seq applies to home improvement contractors and establishes specific requirements and remedies for violations. Under the CFA, contractors must comply with the Contractors’ Registration Act (CRA), N.J.S.A. § 56:8-136, et seq. which mandates registration with the Division of Consumer Affairs, proof of liability insurance, and adherence to regulations governing home improvement contracts. Home improvement contractors must also comply with Home Improvement Practices regulations (HIP) N.J.A.C. 13:45A-16.1, et seq. Violations of the CRA and HIP and are deemed unlawful practices under the CFA, subjecting contractors to liability.
To recover under the CFA, a plaintiff must demonstrate three elements: (1) an unlawful practice, which may include affirmative acts, knowing omissions, or regulatory violations; (2) an ascertainable loss of money or property; and (3) a causal connection between the unlawful practice and the loss. The CFA does not require proof of intent to deceive for affirmative acts, and damages are calculated based on the cost of repair or other ascertainable losses, which are trebled as a mandatory remedy. Additionally, successful plaintiffs are entitled to attorneys’ fees, filing fees, and costs
Home improvement contracts exceeding $500 must be in writing, signed by all parties, and include specific terms such as the contractor’s registration number, insurance details, a description of the work, and the total price. Failure to comply with these requirements constitutes a violation of the CFA. Contractors are also required to prominently display their registration numbers and provide consumers with a toll-free number for the Division of Consumer Affairs. N.J.S.A. § 56:8-144, § 56:8-151.
Contractors’ Registration Act
The New Jersey Contractors Registration Act is a law designed to protect consumers engaging in home improvement projects. Under this Act, all home improvement contractors in New Jersey are required to register with the New Jersey Division of Consumer Affairs. This registration ensures that contractors meet certain standards and comply with regulations aimed at preventing fraudulent or deceptive practices in the home improvement industry. In addition, every registered contractor must maintain a certificate of commercial general liability insurance in a minimum amount of $500,000 per occurrence. N.J.S.A. § 56:8-142.
Failure to register can have significant consequences if a civil action is commenced against unregistered contractor. Taking it a step further, the Act makes it a fourth degree crime to knowingly violate the Act.
The Act also provides consumers with remedies if contractors violate its provisions, offering an added layer of protection for homeowners. A violation of the Contractor’s Registration Act is a violation of the New Jersey Consumer Fraud Act that triggers treble damages and recovery of attorney fees if all elements are established.
Home Improvement Practices
The “Home Improvement Practices” regulations, outlined in N.J.A.C. 13:45A-16.1, et seq. , were established by the New Jersey Division of Consumer Affairs to regulate home improvement contracts and protect consumers from fraudulent or deceptive practices. These regulations set specific standards for home improvement contracts, including requirements for written agreements, clear terms, and proper disclosures. They also define certain acts or omissions as unlawful, such as misrepresentations or failure to comply with contract terms.
A violation of these regulations is considered an unlawful act under the New Jersey Consumer Fraud Act (CFA). This means that any breach of the “Home Improvement Practices” regulations can result in liability under the CFA, which provides consumers with remedies such as treble damages, attorneys fees, and costs. These regulations are designed to ensure transparency, accountability, and fairness in home improvement transactions.
Attorneys with Extensive Experience and Expertise in Home Improvement Disputes
We have extensive experience and expertise in handing cases involving Home Improvement Fraud and various types of disputes with Home Improvement Contractors. Please contact us to schedule a consultation.
