New Jersey’s Consumer Fraud Act (N.J.S.A. 56:8-1 et seq.) is one of the nation’s most expansive and highly protective public watchdogs. The statute encompasses a wide range of industries, including motor vehicle sales, professional services, health clubs, internet sales and wireless phones, to name a few. But as reported by the Office of the Attorney General, home improvement contractors topped the list of complaint categories last year. This statistic comes as no surprise considering the abundance of home improvement and home elevation work performed in New Jersey in the wake of Superstorm Sandy in October 2012.
The Act broadly defines a contractor as “a person engaged in the business of making or selling home improvements and includes a corporation, partnership, association and any other form of business organization or entity, and its officers, representatives, agents and employees.” N.J.S.A. 56:8-137. New Jersey courts have determined that individuals may be liable for violations of the CFA, and that the corporate form does not necessarily shield a principal from personal liability. The Act imposes strict penalties against contractors for affirmative acts, omissions and technical violations. These include treble damages and fee shifting provisions.
However, despite the protections of the Consumer Fraud Act, it is incumbent upon consumers to protect themselves too. But how?
- Get to know your contractor before signing a contract. The Division of Consumer Affairs (DCA) provides information regarding businesses regulated by the state, including home improvement contractors, who must be licensed in New Jersey to perform work here. The DCA also maintains publicly-accessible databases that allow you to verify the status of a contractor’s license. The list includes both Home Improvement Contractors and Home Elevation Contractors.
- Ask questions. Your time is valuable, but the old saying, “Measure twice, cut once” should also apply before the work begins. The more you find out about a contractor’s background and experience at the outset, the more time you will save yourself in the end. Litigation can be time-consuming and stressful. While a lawsuit can’t always be avoided, the more research you do, information you gather, and questions you ask, the more likely you will find a reputable and competent contractor whose experience matches your needs. Additionally, if a contractor sees that you are knowledgeable and personally invested in the project, the less likely he/she will be to cut corners.
- Read the contract thoroughly. The Consumer Fraud Act requires a home improvement contract for a purchase price in excess of $500 to be in writing and signed by all parties. (N.J.S.A. 56:8-151). The contract must also include specific language regarding cancellation; it must detail the materials being used to perform the work; and it must list the legal name, business address and registration number of the contractor. Some of these requirements may seem like nothing more than procedural niceties, but the CFA imposes strict liability against contractors for regulatory/technical violations.
Of course, you can take all of these precautions and still find yourself the victim of what the CFA terms an “unconscionable commercial practice.” That is why it’s imperative to maintain records of all your dealings with your home improvement and/or home elevation contractor, including copies of contracts, written changes to any contracts, receipts, proof of payment, and even notes made contemporaneously with any conversations you have. If you do need to seek recourse, the provisions of the Consumer Fraud Act can be a more powerful sword if you are informed and prepared.