Home Improvement Contracts – Know Your Rights

Each year, the New Jersey Division of Consumer Affairs receives thousands of complaints from consumers who hire contractors to do expensive home repair projects and who end up dissatisfied with the results. Typical complaints by homeowners include: shoddy workmanship, extensive delays in completing the job and hidden charges.

The New Jersey Consumer Fraud Act

The New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2, et seq., is considered one of the strongest consumer protection laws in the United States. It is designed to protect you from misrepresentation, fraud and deception in consumer transactions, including contracts for home improvement work. In court, a judge will presume that a home improvement contractor is familiar with the law. In other words, any violations of the law, even unintentional technicalities, will be enforced against a contractor.

The Contractors’ Registration Act requires that all home improvement contractors register with the New Jersey Division of Consumer Affairs. See N.J.S.A. 56:8-136, et. seq. Any contractor who is not registered with the Division of Consumer Affairs will be denied municipal construction permits and will not be permitted to perform home improvement work in New Jersey. You can check online to see if your contractor has registered with the State by going to the Division of Consumer Affairs website:

http://www.njconsumeraffairs.com

Under the law, home improvement contractors are individuals and/or companies involved in repairing, renovating, modernizing, installing, replacing, improving, restoring, painting, constructing, remodeling, moving, or demolishing residential or non-commercial properties.

Home improvement contractors include those who work on residential driveways, sidewalks, swimming pools, terraces, patios, additions, landscaping, fences, porches, windows, doors, cabinets, kitchens, bathrooms, garages, finished basements, 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, roofing and siding, wall-to-wall carpeting or attached or inlaid floor coverings, and more.

Homeowner Rights

The Consumer Fraud Act offers you protections in several ways. It is important that a homeowner know exactly what rights they have when dealing with home improvement contractors. The following are a list of rules and regulations, which must be followed by all New Jersey contractors:

♦ Contracts for home improvement projects costing $500.00 or more must be in writing and signed by the parties. The contract must include the legal name and business address of the contractor as well as a start date and a completion date, a description of the work to be done and the total price. See N.J.A.C. 13:45-16.2(12) The contract must also include the contractor’s registration number.

♦ All home improvement contracts must provide a clear and accurate description of the work to be completed and the principal products and materials to be used or installed in performing the contract. This includes name, make, size, capacity, model and model year of the principal products or fixtures to be installed and the type, grade, quality, size or quantity of principal building or construction materials to be used. Make sure that the contract states name brands or quality/grades of materials to be used.

♦ Additionally, all contracts must clearly and accurately provide the total price of the work to be completed. This includes a written explanation of finance charges, time and materials, hourly rate for labor, discounts, incentives, and all other terms and conditions affecting price.

♦ Change orders – any changes to the contract or extra work, which is to be performed – must also be in writing and signed by both parties.

♦ Dates or time period when the work will be done and completed must be clearly and accurately stated in writing. Any delays beyond the contractor’s control must be provided to you with timely written notice of the delay, reasons for delay, and revised schedule of start and completion.

♦ Make sure all warranties and guarantees are in writing. Written statements of guarantee or warranty for any products, materials, labor and other services provided by the contractor must be provided at both the estimate and signing stages.

♦ Any technical violation of the Consumer Fraud Act or its regulations, such a failure to comply with all of above-mentioned requirements of a written contract, will cause a home improvement contract to be considered null and void by a court. In such a case, the contractor is denied any compensation for services rendered and you will be able to obtain a full refund for all amounts, which had been paid to the contractor. Additionally, consumers who file a lawsuit with the court pursuant to this act may be entitled to be reimbursed for attorney’s fees.

♦ The Consumer Fraud Act requires a contractor to pay triple the amount of damages, as punishment, if the customer suffers damages to property or loses money due to contractor violations. Proof that you were caused to suffer damages due to acts of unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation or knowing concealment, suppression or omission of fact is all that is necessary to obtain a victory under this law.

I recommend that you contact a knowledgeable attorney before you sign a home improvement contract. However, if you already find yourself in a bind and are dissatisfied by a contract that you have already entered into, then it would be to your benefit to consult with an attorney right away.