Certified by The Supreme Court of New Jersey as a Civil Trial Lawyer

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Home Remodeling Seminar for Contractors

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Roger Mitchell is teaching seminars to various groups, including lawyers from State and County Bar Associations, Business Groups, Rotary Clubs and others. The subject may be summarized as “Consumer Transactions in the Construction Setting”. The law moves slowly, but how about this one?

The Contractors Registration Act provides that on or after December 31, 2005, no one can engage in the home improvement business unless registered with the Division of Consumer Affairs. N.J.S.A. 56:8-138(a). In re Marcano 2007 WL 2141435, *1 (N.J.Super.A.D.) (N.J.Super.A.D.,2007). Doing so is punishable as a fourth degree crime. Believe it when we tell you that there are a lot of good contractors doing business without the proper registration.

And how about this history?
Many of us have heard the Latin phrase caveat emptor, which means “let the buyer beware.” While it may state how the law was, it is not true of how the law is today. We have abandoned that old rule in favor of a more ethical attitude or approach in our dealings with one another. It is now the law that a person has the right to rely on representations made by another when dealing with that other person. New Jersey’s Consumer Fraud Act sets forth provisions defining this law.

In 1960, the Legislature passed the Consumer Fraud Act which conferred on the Attorney General the power to investigate consumer-fraud complaints and promulgate rules and regulations that have the force of law. In 1971, the Legislature amended the Act to expand the definition of “unlawful practice” to include “unconscionable commercial practices” and provided for private causes of action, with an award of treble damages, attorneys’ fees, and costs to increase the attractiveness of consumer actions to attorneys and help reduce the burdens on the Division of Consumer Affairs. Cox v. Sears Roebuck & Co. 138 N.J. 2, 14-15, (1994).

In Cox, homeowner brought suit under the Consumer Fraud Act for merchant’s alleged unlawful practices in connection with performance of home improvement contract. Homeowner also sought to recover on breach of contract theory. The Superior Court granted merchant’s motion for judgment notwithstanding the verdict, dismissed merchant’s counterclaim, and ordered merchant to remove any charges to homeowner’s account and any lien on homeowner’s residence. Appeal was taken. The Superior Court, Appellate Division, affirmed. On further appeal, the Supreme Court, held unanimously that: (1) merchant committed “unlawful act” within meaning of Consumer Fraud Act by failing to obtain necessary government permits for home improvement work; (2) homeowner sustained “ascertainable loss” as result of merchant’s violations, even though he had made no payments on contract price; and (3) award of treble damages and attorney fees was mandatory upon proof of merchant’s unlawful practice and homeowner’s ascertainable loss.

And for those wondering what qualifies as a home improvement, we have this definition:
The home improvement practices regulations, N.J.A.C. 13:45A-16.1 and – 16.2, promulgated pursuant to authority conferred upon the Attorney General by the Consumer Fraud Act (CFA). N.J.S.A. 56:8-1 et seq.: defines “home improvement” as: the remodeling, altering, painting, repairing, 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, aluminum 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. Messeka Sheet Metal Co., Inc. v. Hodder 368 N.J.Super. 116, 121, 845 A.2d 646, 650 (N.J.Super.A.D.,2004).

So, contractors are the ones who have to watch out for the pitfalls nowadays. If every t is not crossed and every i not dotted, in the contract and related contract documents, the unwary contractor is going to get zapped with paying the attorneys fees for the owner in litigation, even if there is no ascertainable loss!

As usual, the owners have to watch out for the unscrupulous, masquerading as the contractor, but it’s the contractor who needs to watch out.

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