New Jersey Home Improvement Contract Law: What Contractors Need to Know

Carlsbad, CA (PRWEB) October 14, 2009


Craftsman Book Company's Construction Contract Writer is a first-in-class productivity tool used by construction professionals to meet increasingly more stringent state contracting standards. The just-released New Jersey edition of the program helps contractors write construction contracts that comply with New Jersey's home improvement laws.

Residential contractors in New Jersey and many other states can take a lesson from the recent Supreme Court case between Jo Anne and Tom Heath and Czar, Inc., a Patterson, NJ cabinet shop. Czar Inc. was hired to install kitchen cabinets and woodwork in the Heaths' new home. When the Heaths weren't happy with the cabinets Czar installed, they refused to pay. Czar filed suit to collect (Czar, Inc. v. Heath, 198 N.J. 195, 2009).

The Heaths didn't have to complain about the job or the workmanship. Since the construction contract did not meet certain specifications, all they needed to do was to counter-claim over a defect in the contract. New Jersey Administrative Code sections 13:45A-16.1 to 16.2 (Home Improvement Practices) and New Jersey Administrative Code sections 13:45A-17.1 to 17.14 (Home Improvement Contractor Registration) require that all home improvement contracts for more than $500 be in writing and include very specific disclosures. Failure to include those disclosures in the written contract is a violation of New Jersey's Consumer Fraud Act. Penalties include a full refund (New Jersey Statutes Annotated Section 56:8-2.11) or treble damages plus legal fees (New Jersey Statutes Annotated Section 56:8-19).

The following items need to be in all New Jersey home improvement contracts:

(1) The legal name, business address and registration number of the contractor.

(2) A certificate of commercial general liability insurance.

(3) The total price including any finance charges.

(4) A notice of the right to cancel.

When any one of these items is omitted from a home improvement or home repair contract, New Jersey's Consumer Fraud Act comes into effect: full refund, triple damages plus attorney fees. Czar, Inc. lost their Supreme Court case to the Heaths. Legal fees on the way to the New Jersey Supreme Court can run many times the cost of kitchen cabinets. When a job goes bad, having an enforceable contract is essential.

New Jersey isn't unique in this respect. Many states give owners the right to collect for a defective home improvement or home repair contract: Texas, Oklahoma, Arkansas, Illinois, Indiana, Tennessee, Ohio, Maryland, Pennsylvania, Connecticut and Massachusetts have similar legislation.

The web site NewJerseyConstructionContract.com offers free New Jersey contracts that favor New Jersey contractors. The contracts are available in PDF (Adobe Acrobat), RTF (MS Word or WordPad), and CCF (Construction Contract Writer) formats. Contractors can create custom contracts that comply with state law with Craftsman's new Construction Contract Writer program, also available as a free trial.

Craftsman Book Company develops software and publishes technical and professional references for contractors, estimators, remodelers, custom builders, architects, engineers, adjusters and appraisers. Craftsman's website also offers free trial software downloads.

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