Peter C. Harvey, Attorney General

Division of Consumer Affairs
Reni Erdos, Director

For Immediate Release:
August 2, 2004

For Further Information Contact:
Genene Morris, Jeff Lamm
973-504-6327

NEWARK — The New Jersey Division of Consumer Affairs today proposed regulations that will require home improvement contractors to become registered and will impose other strict requirements on individuals who market and carry out home improvement services, Attorney General Peter C. Harvey and Consumer Affairs Director Reni Erdos announced today.

Once adopted, the regulations will implement the Contractors’ Registration Act, signed by Governor James E. McGreevey in May, to strengthen existing rules and protect consumers from home improvement fraud. The proposal was published today in the New Jersey Register (PRN 2004-293).

"Last year, Consumer Affairs logged more than 2,500 complaints from consumers who felt cheated by a home improvement contractor," Attorney General Harvey said. "That figure is up from approximately 2,100 consumer complaints in 2002. These new regulations will provide important protections for consumers as they seek to maintain and improve their homes, a task that is costly and stressful enough without adding unscrupulous contractors to the equation."

"While we believe that most home improvement contractors take pride in what they do, the figures show that there’s no shortage of fraudulent contractors who take consumers’ money, do shoddy work or no work at all and leave consumers in the lurch," Director Erdos said. "The registration scheme that will be in place once the regulations are adopted will promote accountability on the part of contractors."

The Contractors’ Registration Act, among other things:

• Requires home improvement contractors — those who engage in the business of making or selling home improvements including remodeling, altering, renovating, repairing, restoring, modernizing, moving and/or demolishing — to register annually with the New Jersey Division of Consumer Affairs.
  
  
• Bars anyone who is not registered, unless they’re exempted from the registration requirements, from working as a home improvement contractor.
  
  
• Requires registrants to disclose to Consumer Affairs whether they been convicted of any crime.
  
  
• Requires contractors to file proof that they have secured and maintain general liability insurance in a minimum of $500,000 per occurrence. The policy must include a clause providing that cancellation or non-renewal of the policy will not be effective unless and until Consumer Affairs receives the notice of cancellation or non-renewal at least 10 days in advance.
  
  
• Provides that anyone who knowingly violates the Contractors’ Registration Act is guilty of a crime of the fourth degree and is also subject to civil monetary penalties under the Consumer Fraud Act of up to $10,000 for the first offense and up to $20,000 for each subsequent offense.
  
  
• Requires a written contract when the improvement work exceeds $500. The contract must detail all terms and conditions, including among other things: the legal name, business address and registration number of the contractor; a copy of the certificate of commercial general liability insurance; and the total price or other consideration to be paid by the consumers, including finance charges. Any subsequent change to the terms and conditions of the contract also must be put in writing.
  
  
• Gives consumers three days to cancel an oral or written home improvement contract. The consumer must provide the contractor with a written notice of cancellation. Contractors must refund to the consumer any money paid within 30 days of receiving the written notice of cancellation.
  
  
• Requires contractors to post their registration numbers on all New Jersey advertisements, contracts and correspondence with customers and all commercial vehicles registered in New Jersey and leased or owned by the registrant.
  
  
• Bars municipalities from issuing construction permits to contractors who are not registered or exempted from the registration requirements.

The full text of the regulation can be found at http://njconsumeraffairs.com/proposal/hipro82.htm. Written comments on the regulations will be accepted until October 1 and can be sent to:

Reni Erdos, Director
New Jersey Division of Consumer Affairs
P.O. Box 45027
Newark, N.J. 07101