Is Your Home Improvement Contractor Licensed?

March 7, 2013

In the wake of Superstorm Sandy, our office has received a large number of phone calls from homeowners who have run into “difficulties” with their storm repair contractors.  The issues presented to our office have included contractors taking a deposit and not doing the work (and not returning the deposit), contractors performing a small portion of the work and then demanding the rest of the money owed under the contract and contractors simply delivering a horrible work product.  In almost every call we have received, the homeowner has been wronged by their contractor.

Fortunately for consumers, New Jersey has enacted the Consumer Fraud Act which is one of the strictest consumer protection laws in the United States.  In the event that a contractor fails to adhere to the requirements of the Consumer Fraud Act, they can be exposed to three times the damages arising out of their illegal act and be reasonable for the consumer’s attorney fees.  The Consumer Fraud Act is complex and contains a number of nuances that are not easily understood.

Unfortunately, following a disaster, it is not uncommon for “contractors” to come to the effected area and solicit work for the sole purpose of bilking the homeowner.  In an attempt to avoid one of the headache scenarios noted above,  our office recommends that prior to signing a contract for construction work, a homeowner check to make sure the home improvement contractor they are looking to hire is licensed in New Jersey.  Under the Consumer Fraud Act, with very few exceptions, a home improvement contractor must be licensed by the state.  In addition to submitting paperwork to the Department of Consumer Affairs, they must also provide proof that they carry at least $500,000 in general liability insurance.  If a contractor is not licensed in New Jersey, they are in violation of the Consumer Fraud Act and cannot legally enter into a contract with a homeowner.  This means that despite the fact that the contractor and homeowner signed a document entitled “contract”, the contractor cannot enforce the terms of that “contract.”

If you are thinking of hiring a home improvement contractor, you can contact the Department of Consumer Affairs to see if they are licensed or visit the following website to look the contractor up…

A little bit of homework may help prevent a problem down the road.

If you should have any questions concerning the Consumer Fraud Act or Sandy related claims, please feel free to contact our office for a free consultation.

–Erik Anderson, Esq.