Home Improvement Contractors: Get Compliant or Face Fines and Penalties

Your general contracting company performs solid work and you always do what it takes to satisfy your customers. But sometimes there are customers who simply do not have reasonable expectations for their project or those customers who attempt to take advantage of your good-faith approach to business. Even when you have done your best to correct the concern, a dissatisfied customer may decide to file a complaint with the New Jersey Division of Consumer Affairs. Depending on the nature and level of severity regarding the complaint, your business could then receive a Notice of Violation from the state.

According to recent statements made by Acting Attorney General John J. Hoffman, spring signals the beginning of the traditional home-improvement season in New Jersey. The increased temperatures and lack of snow and ice makes major home improvement undertakings more cost effective and logistically feasible. However, the Acting Attorney General was also quick to instruct all consumers to ensure that their contractor is licensed with the state and warn against the harms that can occur if the contractor is not. Thus contractors who have not registered and become compliant with the state’s contractor registration program face both negative consumer perceptions and potential harsh regulatory action.

New Jersey announces fines and penalties against contractors for first quarter of 2015

Recently New Jersey Division of Consumer Affairs announced its citations and violations for the first quarter of 2015. In all, Notices of Violation were issued to 31 contractors. The total value sought was nearly $400,000 in civil penalties and restitution.

gavel order

The most common violation was that of a failure to legally register with the Department as required by New Jersey State law. Registering with the state is a process that includes disclosing the business name, address, physical locations, proof of sufficient insurance, and other information. Furthermore, registered contractors must meet and maintain certain other requirements including proper vehicle signage and display of license number. 22 of the 31 total violations were due to failures to with the department.

Other acts that triggered Notices of Violation included contractors who had been failed to complete work, failed to return deposits, or due to other issues with the work or transaction. Amounts the contractors must pay back in fines and penalties range from $400 to more than $80,000. The total restitution ordered is $266,526.60. The total civil penalties ordered is  $131,250. Contractors who violate the Contractors’ Registration Act can face a civil penalty of up to $10,000 for a first violation. Subsequent violations can be punished by a $20,000 fine.

Home improvement contractors must follow New Jersey’s Consumer Fraud Act

Those who provided home improvement services in the state must also be sure that they do not run afoul of any provisions of New Jersey’s Consumer Fraud Act. In general contractors must be aware of inadvertently or intentionally making an affirmative misrepresentation, a factually untrue statement. They must also beware of making a knowing omission which can occur when the contractor knows something but fails to make the contracting party aware. Finally, contractors must also be aware that the New Jersey Consumer Fraud Act requires for home improvement projects costing more than $500, a written contract with specific and detailed information. Information must include the project’s bargained-for and agreed-upon price, the start date for the work, the end date for the work, information about the contractor and other required disclosures.


For a home improvement contractor who relies on the enforceability of his or her contracts, contractual review is essential. Technical violations of the Consumer Fraud Act are easy to spot and prove. If the contract is in violation of the Consumer Fraud Act, it can be declared void and unenforceable. When an ascertainable loss is present, it is trebled under the statute. The provision for triple damages is not discretionary and must be applied. Furthermore, an LLC or corporate entity may not foreclose the worker or owner from individual liability in the case of a Consumer Fraud Act violation.

Rely on the Jayson Law Group for legal guidance for your business

The Jayson Law Group is dedicated to fighting for New Jersey small business owners such as home improvement contractors. Whether your business needs a regulatory overview and assistance getting complaint or legal representation due to a lawsuit, our attorneys can help. To discuss how our law firm can protect your business and livelihood, call 908-768-3633 or contact us online today.

Leave a Reply

Your email address will not be published. Required fields are marked *