New Jersey Consumer Fraud Act and Home Improvements

New Jersey Consumer Fraud Act and Home Improvements

In the State of New Jersey, contractors are obligated to follow certain rules and regulations to protect consumers.  These rules are codified as the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. and the Home Improvement Practice Regulations, N.J.A.C. 13:45A-16.1 et seq.   These laws generally exist to ensure that consumers are not subject to unconscionable commercial practices while undergoing home improvements.  Among other things, these laws prohibit fraud, misrepresentation, and deception by home improvement contractors.  Contractors should be knowledgeable regarding their duties under these regulations so that they do not encounter potential litigation.

Under the Act, a “contractor” is defined as any person who is engaged in the business of making or selling home improvements.  If you are a contractor under this definition, the Act requires you to be registered with the State of New Jersey.  Any person who falls into this category must abide by the rules of the Act or they may be subject to potential litigation and monetary damages.

It is imperative for contractors to have solid contracts which contain each of the requirements as listed in the Act.  Any contract for work which exceeds $500.00 needs to be in writing and signed by both parties.  The terms and conditions of the contract must contain the following information:

-Name and address of the contractor;

-The toll-free number for the Division of Consumer Affairs;

-A copy of the contractor’s certificate of general liability insurance;

-The telephone number for the contractor’s insurance company;

-The full price for the project;

-The date that the work will begin;

-The date that the work will end;

-A three-day right for the consumer to cancel;

-The brand, type, and quantity of materials to be provided;

-What, if any, warranties for goods or materials are to be provided;

-A description of any mortgage or security interest to be taken in connection with the sale or financing of the project.

In order for this contract to be valid under the Act, it must be signed by both parties and all modifications to the contract must also be in writing.  The contractor may not begin work until the contract is signed and all required permits for the job are obtained.  If any of the contractual requirements are not met, the contractor may be held liable for a per se violation of the Act, meaning that the consumer doesn’t even need to prove malice or actual wrongdoing to be awarded damages.

The contractor must also be careful when negotiating the job and making representations about the work to be performed.  The contractor cannot make any actual misrepresentations or knowing omissions of relevant facts related to the project.  This includes tactics such as “up-selling” consumers unnecessary products or services, misrepresenting products or materials to be used in the project, misrepresenting or omitting additional pricing terms, failing to work in a timely matter, and other misrepresentations or omissions which would negatively affect the consumer.

At B&B Law Group, LLC, we have worked with various contractors and consumers to ensure they know their rights and obligations under the law.  If you are a contractor who wishes to ensure compliance with the law, needs an updated contract, or just wishes to have their current contract reviewed, or a consumer who wants to guarantee their rights, please feel free to contact us at (973) 536-2224 or!