National Consumer Protection Week, Day 4: Protecting Your Home: Consumer Tips on Hiring a Home Improvement Contractor or Home Elevation Contractor
NEWARK – Acting Attorney General John J. Hoffman and the New Jersey Division of Consumer Affairs continued the commemoration of National Consumer Protection Week with advice for consumers on hiring a home improvement contractor or home elevation contractor.
"Home improvement can be the biggest expense a consumer will make during a given year – and with the wrong contractor it can be fraught with risk," Division of Consumer Affairs Acting Director Steve Lee said. "Dishonest contractors can leave consumers with unfinished or unsafe projects that can be very expensive to fix. Fortunately, New Jersey's registration laws require contractors to act with transparency and accountability."
In 2014, the Division received 1,251 consumer complaints in the "Home Improvement" category, the number-one complaint category for the year. The Division took aggressive action last year against unregistered and otherwise noncompliant contractors, including 40 Consent Orders that assessed more than $189,000 in civil penalties and consumer restitution, and 130 Notices of Violation seeking more than $2.1 million in restitution, penalties, and costs.
Consumer Advice on Hiring a Home Improvement Contractor
New Jersey law requires all individuals or businesses, who solicit and/or perform home improvement work, to obtain registration from the New Jersey Division of Consumer Affairs. To become registered, a contractor must have a legitimate street address and at least $500,000 in liability insurance, among other requirements.
- Before hiring a contractor, contact the Division of Consumer Affairs to learn whether the contractor is registered and whether the company or individual has been the subject of consumer complaints.
- Learn as much as possible about each contractor and its history of satisfied or dissatisfied customers. If possible, seek recommendations from people you know. Search the Internet for customer reviews. Ask the contractor for references, and contact those individuals about the contractor's work.
- Get estimates from at least three contractors. Ask the contractors how long they have been in business, if they meet all legal requirements for performing home improvement work in New Jersey, and whether they will use subcontractors on the project.
- Demand a copy of each contractor's liability insurance policy, and contract the insurance company to verify that the policy is still valid.
- Obtain a written contract. Contracts for home improvement projects costing $500 or more must be in writing. They must include the contractor's legal name, business address, and registration number, as well as the project's start date, completion date, a description of the work to be done, and the total price, among other information.
- Make sure all warranties and guarantees are in writing. Make sure the contract states the name brands or quality/grades of the materials that will be used. Ensure that all applicable construction permits are obtained by the contractor, from the appropriate municipality.
- If necessary, investigate financing options for your project. Shop for credit and be sure you understand the annual percentage rate you will have to pay.
- Remember that it is customary not to pay for the entire project in advance. The general practice is to pay one-third in advance, one-third halfway through, and one-third upon completion. Do not pay with cash.
- Before you sign a contract, ask for a lien waiver. A lien waiver is a receipt that states that the workers and material suppliers will not ask you for money once you have paid the contractor. Beware if a contractor asks you to sign a statement that says you will cover the costs of materials and labor if the contractor does not pay.
- Keep copies of all contracts, estimates, receipts, and other paperwork. In case you are cheated, this will help you obtain a refund or work with the Division to pursue restitution.
Hiring a Home Elevation Contractor:
New Jersey's home elevation contractor's statute establishes the registration requirements for businesses that offer home elevation work, defined as raising an entire residential or noncommercial structure to a higher level above the ground.
Home elevation contractors must have a named person in an ownership, employee, or consultant position with a minimum of five years' experience in home elevation. They must maintain specific insurance coverage, as described below. They must apply to the Division of Consumer Affairs for registration as a home elevation contractor, and provide the Division with specific information about the company. (A limited exception to these requirements applies to home elevation contracts signed before October 1, 2014).
Consumers seeking to hire a home elevation contractor should:
- Contact the Division of Consumer affairs to learn whether any contractor is registered to perform home elevation contracting in New Jersey, and whether the company has been the subject of consumer complaints.
- Obtain a copy of the contractor's insurance policies. Contact the insurers to verify that the policies are still valid. All home elevation contractors must maintain $500,000 per occurrence of general liability insurance and $1 million per occurrence of cargo or other insurance.
- Contact your own insurance provider, to learn about any limits or conditions that may exist in your homeowner's insurance policy with regard to home elevation.
- Ask for the names and contact information of references with whom the contractor has performed home elevation projects in the past. Contact those references to ask about their experience.
- Demand a detailed contract that specifies the project's scope, specific time frame, total cost, and other information. Under New jersey law, contractors must provide a detailed contract for every home improvement project – including home elevation – costing more than $500.
Hiring Other Licensed Professionals:
Home improvement contractors and home elevation contractors must obtain registration from the Division of Consumer Affairs. Other occupations that work on homes – electrical contractors; fire and burglar alarm installers and locksmiths; heating, ventilating, air conditioning and refrigeration (HVACR) contractors; and master plumbers – must be licensed by a State professional board.
Before hiring one of these professionals, check the
Licensee Search link on the Division of Consumer Affairs' website, or contact the Division by phone, to learn whether the person or business has the appropriate license and that their license is active and in good standing. You can also learn whether the licensing board has taken any public disciplinary action against the licensee.
Additional Information from the Division of Consumer Affairs:
Consumers can find additional information in the following, free publications on the Division's website:
- The Consumer Briefs are also available
in Spanish.
National Consumer Protection Week (NCPW) is a coordinated campaign that encourages consumers nationwide to take full advantage of their consumer rights and make better-informed decisions. NCPW 2015 will take place March 1 through March 7, 2015. Additional information is available at
www.NCPW.gov
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an
online complaint with the State Division of Consumer Affairs by visiting its
website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.
Follow the Division of Consumer Affairs on
Facebook , and check our online calendar of upcoming
Consumer Outreach events.
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