With few exceptions, New Jersey law requires all home improvement contracts to be in writing, and to comply with a number of technical requirements. For example, and without limitation, all home improvement contracts for a purchase price in excess of $ 500.00 must contain the following:
1. The legal name and business address of the seller, including the legal name and business address of the sales representative or agent who solicited or negotiated the contract for the seller;
A description of the work to be done and the principal products and materials to be used or installed in performance of the contract.
2. The description shall include, where applicable, the name, make, size, capacity, model, and model year of principal products or fixtures to be installed, and the type, grade, quality, size or quantity of principal building or construction materials to be used. Where specific
representations are made that certain types of products or materials will be used, or the buyer has specified that certain types of products are to be used, a description of such products or materials shall be clearly set forth in the contract;
3. The total price or other consideration to be paid by the buyer, including all finance charges. If the contract is one for time and materials, the hourly rate for labor and all other terms and conditions of the contract affecting price shall be clearly stated;
4. The dates or time period on or within which the work is to begin and be completed by the seller;
These provisions are set forth in the administrative regulations (the “Regulations”) promulgated by the Division of Consumer Affairs (known as "the DCA," a part of the Department of Law and Public Safety in the Attorney General's Office). The Regulations are codified in the New Jersey Administrative Code (“NJAC”), and they apply to all “home improvement” contractors.
The NJAC defines “home improvement” as: the remodeling, altering, painting, repairing, renovating, restoring, moving, demolishing, or modernizing of residential or noncommercial property or the making of additions thereto, and includes, but is not limited to, the construction, installation, replacement, improvement, or repair of driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, windows, doors, 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, siding, wall-to-wall carpeting or attached or inlaid floor coverings, and other changes, repairs, or improvements made in or on, attached to or forming a part of the residential or noncommercial property, but does not include the
construction of a new residence. The term extends to the conversion of existing commercial structures into residential or noncommercial property and includes any of the above activities performed under emergency conditions.
The consequence for non-compliance can be severe. Violation of any provision of the NJAC constitutes a per se violation of the New Jersey Consumer Fraud Act (the “Act”), which entitles homeowners to triple damages plus their attorneys’ fees. In addition, even
if a home improvement contract is in writing, if it lacks one or more of the required terms, or is otherwise found to violate the Regulations or the Act, it may be deemed by a court to be an unlawful contract, thereby subjecting the home improvement contractor to liability under the Act, even though his failure to abide by the Regulations was innocent, technical and committed in good faith.
This means even an unintentional violation of the Act, such as, for example, failure
to memorialize a change order in writing, may preclude the home improvement contractor from enforcing the agreement. So, if the consumer fails to pay for work satisfactorily performed, the home improvement contractor may not be entitled to sue for breach of contract. Instead, he may only be entitled to recover for the value of his services under an alternative theory of liability based upon unjust enrichment. However, to do so the home improvement contractor must prove the value of the work performed, and pay not only his attorney, but also the consumer’s attorneys’ fees in the process, which would typically make any recovery cost prohibitive.
Therefore, it is essential for home improvement contractors to have an experienced attorney who is familiar with the requirements of the Act draft their written contracts. Additionally, reputable contractors have technical and substantive defenses for suits by consumers over technical violations of the Act. So it is always important that the attorney handling the matter be experienced with litigation under the Act.
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