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NJ Home Improvement Contractors Must Be Registered

August 7, 2013

It is summertime, and that means many homeowners are taking advantage of the good weather and doing improvements on their homes.  Some are landscaping; others are getting a new roof installed; still others are taking care of that long-awaiting new driveway and walkway.  Whatever your project, you should avail yourself of the consumer protection laws that exist for you as a homeowner when you contract with home improvement contractors.

Be aware that most landscapers[1], tree trimmers and other outside contractors ARE considered home improvement contractors under NJ law and must register with the State of New Jersey before obtaining or engaging in any improvement work on your home.  Almost all other types of contractors are included.  The registration requirement is known as the Home Improvement Contractors Registration Act and applies to residential dwellings.  The term “home improvement” as used in the act includes:

the construction, installation, replacement, improvement or repair of: driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, windows, doors, walls, ceilings, roofing, cabinets, kitchens, bathrooms, garages, basements and basement waterproofing, fire protection devices, security protection devices, central heating and air conditioning equipment, water softeners, heaters and purifiers, solar heating or water systems, insulation installation, aluminum/ vinyl siding, wall-to-wall carpeting or attached/ inlaid floor coverings, and other changes, repairs or improvements made to residential property.

If the work you are obtaining falls within these parameters, then your home improvement contractor must be registered.  Registration must be renewed on an annual basis for all home improvement contractors.  During the annual registration process, the NJ Division of Consumer Affairs confirms that the contractor maintains adequate insurance.  It also investigates the background of the applicant with regard to criminal activity, prior convictions, prior complaints or violations of the registration act, fraud, negligence, malpractice, misconduct, etc.  The purpose of the law is to protect you, as the homeowner/ consumer, and help you to obtain quality service from reputable and professional contractors.

The home improvement contractor must also comply with certain requirements when doing business with you.  Importantly, look to see that your contractor provides his registration number on all advertising, contracts, business cards, invoices, etc., along with a statement on all contracts and invoices that he is regulated by the NJ Division of Consumer Affairs (with the 1-800 number for the Division).  This ensures that you know you have rights and a legal forum in which to seek redress if the contractor acts in an unethical, unprofessional or illegal manner.  All contracts for home improvement work above $500 must be in writing and must include:(1) the terms and conditions of the contract, (2) the total price (including finance charges, if any), (3) a copy of the contractor’s commercial general liability insurance in a minimum amount of $500,000 per occurrence, (4) the contractor’s name/ address, and (5) signatures from all parties.  The contract must also provide you with notice of the right to cancel the contact before midnight of the third business day after receiving a copy of the contract.  This notice must be in bold type on the contract itself (at least 10 point size).  

Most importantly, the registration act provide for significant penalties for violations of the law.  In addition to civil/ administrative penalties, it is considered a fourth degree crime for a home improvement contractor to violate the provisions of the registration act (and this carries a potential penalty of 18 months in jail).  Armed with this law, many homeowners who find that their contractor has violated the act have sought redress in many forms, including voiding the contract or reducing the disputed amounts claimed under the contract.  Also, these violations often eliminate a contractor’s right to place a “construction lien” against a homeowner’s property.  It is advised that you seek knowledgeable legal counsel for these types of disputes.  

[1] An exception applies for a landscaper who only mows lawn and trims hedges, and he will not generally be required to register if his activities remain so limited; but if that landscaper plants any flowers or shrubs, lays sod or establishes a lawn, he is immediately transformed into a home improvement contractor who must register.  Moreover, a person who is registered as a landscape architect is exempt since such person is then subject to another (often more rigorous) set of laws for such architects.

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