Know before you go
- Contracts for home improvement work over $500 must be in writing.
- A homeowner may cancel a signed contract for any reason before midnight of the third business day.
- Unregistered contractors cannot get municipal construction permits.
The Division of Consumer Affairs says it receives thousands of complaints every year from homeowners unhappy with contractors: poor workmanship, missed deadlines, and jobs never started or finished after a deposit was paid. Most of the protections that help in those situations have to be in place before the work starts, which is why the order of steps below matters.
Who counts as a home improvement contractor
The category is broad. It covers people and companies who repair, renovate, install, replace, paint, build, remodel or demolish residential property. The state’s own list includes driveways, sidewalks, pools, patios, additions, fences, porches, windows and doors, kitchens and bathrooms, basements and waterproofing, insulation, roofing and siding, and carpeting or attached flooring. Landscapers who plant or lay sod must register; those who only mow and trim do not.
Under the Contractors’ Registration Act, these contractors must register with the Division of Consumer Affairs. Unregistered contractors will not be issued municipal construction permits. Registration is not an endorsement, the Division notes, but its absence is a warning sign. Licensed trades such as plumbers, electrical contractors and architects are regulated by their own boards instead, and their licenses can be checked through the Division’s licensee search.
Before you sign
- Confirm the registration number and ask the Division whether complaints have been filed.
- Get written estimates from at least three contractors.
- Ask how long the company has been in business, whether it carries liability insurance and whether subcontractors will be used.
- Ask for a lien waiver, a receipt confirming that workers and suppliers will not come to you for payment once the contractor is paid.
What the contract must say
Any home improvement contract over $500 must be in writing. State guidance says it must include:
- The contractor’s legal name, business address and registration number.
- A start date and a completion date.
- A description of the work and the total price.
- A copy of the contractor’s commercial general liability insurance policy and the insurer’s phone number.
The Division also recommends putting warranties in writing and naming the brands or grades of materials. Be cautious of any clause that makes you responsible for labor and material costs if the contractor fails to pay its own workers or suppliers.
Tip: The Division recommends a written contract even for jobs under $500. A one-page agreement with the price, dates and scope is far better than nothing if a dispute arises.
The three-day right to cancel
A homeowner may cancel a signed home improvement contract for any reason before midnight of the third business day after receiving a copy. The cancellation should be in writing, either handed to the contractor or sent by registered or certified mail with a return receipt, with a photocopy also sent by regular first-class mail.
Payments, permits and inspections
The law prohibits contractors from demanding the final payment before the work is complete. The Division’s practical advice goes further: do not pay the whole job upfront, do not pay in cash, and be wary of anyone asking for more than a third of the total before work begins.
Make sure the required municipal permits are pulled. If you apply yourself, list the contractor’s name and registration number; telling the town you are doing the work yourself when you are not can cost you protections the law provides. Electrical and plumbing permits must be signed and sealed by the licensed electrical contractor or master plumber. Final inspections should be completed before the final payment.
Warning signs
State guidance flags a contractor who asks for more than a third upfront, says no written contract is needed, demands cash, lists only a post office box, has no registration number or knocks on your door claiming to be working nearby with a special deal. Write down the contractor’s name, street address, phone, license plate and vehicle description; if something goes wrong, that information helps investigators.
When a job goes wrong
Start by giving the contractor a chance to fix the problem, preferably in writing so there is a record. If that fails, there are three routes, and they can overlap:
| Route | What it does |
|---|---|
| Complaint to the Division of Consumer Affairs | Filed online or by requesting a form at 1-800-242-5846; can lead to mediation or enforcement. |
| County or municipal consumer affairs office | A local office can take complaints and help with forms. |
| Court | Small Claims hears money claims up to $5,000; larger claims go to the Special Civil Part. |
Home improvement contracts are also covered by the Consumer Fraud Act, which allows a successful consumer to recover triple damages and attorney’s fees; see The New Jersey Consumer Fraud Act in Plain Language: What It Covers and How to Use It. For a smaller claim you plan to handle yourself, the steps are in Small Claims Court in New Jersey: Limits, Filing Fees, Where to File and How to Prepare.