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What is the Contractors' Business Registration Act?
The "Contractors' Business Registration Act" (the "Act," formerly the "Contractors' Registration Act"), sets forth mandatory registration and other requirements for home improvement contractor businesses ("HICBs," formerly referred to as "HICs") selling or making home improvements in New Jersey. Although registration has been required for almost two decades, the Act was recently amended by P.L 2023, c.237, and these amendments, among other things, created new and revised registration requirements that all existing and new applicants must now comply with. The text of the HICB, as amended, can be found starting at Title 56:8-136 of the New Jersey statutes. A copy of the law is available on the Legislature's website, and a link to the Legislature's website along with links to other applicable regulations can be found here.
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What is a “home improvement contractor business” (“HICB”)?
An HICB is any business organization or entity, including sole proprietorships, that provides home improvements.
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What are “home improvements”?
Home improvements include, but are not limited to, the remodeling, painting, repairing, renovating of, and making of additions to residential property. This includes not only the physical house itself but also garages, basements, driveways, swimming pools, fences and landscaping on the property. It also includes work done on or involving central heating and air conditioning equipment, water softeners, solar heating or water systems, insulation installation, siding, carpeting and flooring, for example.
Construction of a new residence is not considered a home improvement under the Act.
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Who must register?
The Act requires any HICB engaging in the business of making or selling home improvements to register annually with the Division, unless specifically exempted from registration under the Act.
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Who is exempt from registration?
N.J.S.A. 56:8-140 lists the categories of people and entities exempt from registration, including:
- New home builders registered with the Department of Community Affairs;
- A person performing home improvements on residential or non-commercial property that they own or that is owned by a member of their family, a charity or other non-profit organization;
- A person that is licensed or regulated by a professional board with the Division, or another State agency, that is acting within the scope of practice for their profession;
- A person employed by a community association or cooperative corporation;
- Public utilities;
- Home repair contractors (someone that sells goods or services pursuant to a home repair contract), financing agencies and salesmen; and
- Any home improvement retailer with a net worth of more than $50,000,000, or employee of that retailer.
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Does the law apply to out-of-state contractors?
Any HICB who sells or makes home improvements for residential properties in New Jersey must register with the Division — regardless of whether the HICB is based in New Jersey or not.
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I only do home improvements as a side job. It is not my full-time profession; do I still have to register?
Yes. The Act applies to any HICB engaging in the business of making or selling home improvements — regardless of whether the home improvements are done on a full-time or part-time basis.
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I plan to help my mother remodel her house. Do I have to register?
No. The registration requirements do not apply to any person performing a home improvement on a residential or non-commercial property he or she owns or that is owned by a member of his or her family.
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Do I have to register if I am improving a home belonging to a charity or a non-profit corporation?
No. A person performing home improvement work on a residential or non-commercial property owned by a bona fide charity or other non-profit organization is not required to register.
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I am a subcontractor, paid by the general contractor, and never entered into a contract with the consumer. Do I have to register?
Yes, a subcontractor of an HICB must register.
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I work exclusively on commercial properties. Do I have to register with the Division?
The Act applies only to existing residential properties — single or multi-family homes — and to commercial properties that are being converted into residential units. The law does not apply to properties that are being used for commercial purposes. However, HICBs that perform services in connection with commercial properties may be subject to other State laws and regulations. You may wish to contact the Department of Community Affairs for further information by clicking here.
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What happens if I do not register?
Any HICB that is required to register but does not, including by failing to renew its registration annually, is prohibited from selling or making home improvements in the State of New Jersey.
Any unregistered HICB that continues to sell or make home improvements or that violates any other section of the law is subject to civil monetary penalties of up to $10,000 for the first offense and up to $20,000 for each subsequent offense. Selling or making home improvements without a required registration may also result in an HICB being denied a registration in the future. Also, anyone who knowingly violates the Act is may be found guilty of a crime of the fourth degree and face additional fines as well as possible jail time.
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What do I need to do to become registered and maintain my registration?
To become registered and maintain registration, an HICB must:
- Submit a completed application form provided by the Division, including copies of all required documents, available here;
- File proof that it maintains commercial general liability insurance in a minimum amount of $500,000 per occurrence, and workers' compensation insurance, unless exempt by law;
- File proof that it maintains "additional security" that meets the requirements of the recently added provisions of the Act, N.J.S.A. 56:8-142(e)-(k); and
- Pay the applicable fee (see question 20 for more information on fees).
Please note the requirement that all HICBs maintain an “additional security” is a new requirement added by the amendments to the Act. It is applicable to all HICBs regardless of whether you are applying for the first time or renewing a registration you have had for years.
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What are the requirements for “additional security”?
The Act requires all HICBs to maintain "additional security" throughout their registration.
This additional security can be in the form of:
- A compliance bond issued by a surety company;
- An irrevocable letter of credit issued by a bank; or
- Securities, moneys, or other security acceptable to the Division.
The minimum amount of the additional security depends on the value of contracts entered into by the HICB (N.J.S.A. 56:8-142(f)(1)):
- For a contract valued over $120,000, or for contracts valued over $750,000 in the previous 12 months: $50,000 additional security;
- For a contract valued between $10,000 and $120,000, or for contracts valued between $150,000 and $750,000 in the previous 12 months: $25,000 additional security; and
- For a contract valued under $10,000, or for contracts valued under $150,000 in the previous 12 months: $10,000 additional security.
If you plan to provide a certified/bank check as your additional security, it must be submitted with your application and delivered in person or mailed to: Division of Consumer Affairs, Regulated Business Section, 124 Halsey St., 7th Floor, PO Box 46016, Newark, NJ 07101, ATTN: HICB/HECB Unit.
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What effective date should the additional security (bond or irrevocable letter of credit) have?
The additional security should have an effective date which is on or before the date of submission to our office. Any additional security submitted with a future date will be rejected until the date is revised.
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Who should be the oblige in the additional security?
The oblige should be “NJ Division of Consumer Affairs” with the address as 124 Halsey Street, 7th FL., P.O. Box 46016, Newark, NJ 07101.
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Do I need a separate security for each contract, client, or municipality?
No, a single additional security (bond, letter of credit, etc.) is sufficient. An HICB does not need to obtain a separate security for each contract it enters into so long as the amount of the additional security complies with the Act (specifically, N.J.S.A. 56:8-142(f)(1)).
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Is there standard language or a standard form for the additional security?
No. Regardless of whether the additional security is a compliance bond, a letter of credit, or another form of security, it will be acceptable to the Division so long as it complies with the Act (specifically, with N.J.S.A. 56:8-142e-l). In particular, the HICB providing the additional security should state (either in the security itself or in a separate document) that: (1) the security will be replenished as claims are paid; (2) the security will cover penalties assessed by the Division; (3) the security will
not be used to cover treble damages awarded pursuant to the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.; (4) the aggregate liability of the surety, bank, or issuer for breaches of the conditions of the security shall not exceed the amount of the security; and (5) the surety, bank, or issuer must give the HICB at least 10 days’ notice before canceling or declining to renew the security.
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What happens if a successful claim is made against the additional security?
An HICB is required to ensure that the amount of the additional security always meets the requirements of the law. Thus, if a claim is paid, and the amount of the security drops below the minimum required, then the HICB must promptly replenish the amount of the additional security to ensure it meets the requirements of the law.
See N.J.S.A. 56:8-142(g).
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Do I need to have workers’ compensation insurance?
HICBs must have workers' compensation insurance, unless exempt by law. Please see N.J.S.A 34:15-1 et seq., to determine if you may be exempt consult with an attorney or insurance agent.
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How do I obtain an application for registration?
Application forms for initial registrations and reinstatements are available online at the Division's website here and must be submitted in paper form via mail or in-person in Newark, 124 Halsey St. 7th Floor. Copies of these application forms may also be obtained by calling the Division at 1-888-656-6225. Applications for renewal registrations must be made online. The Division does not accept renewal applications in paper form. The Division's online registration Portal can be accessed here. Instructions on how to create a Portal account will be sent in early 2025 and are available here.
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Is there an application fee?
Yes. There is non-refundable fee for each application, made payable to the Division. See below for the fee amount.
- Initial Application fee: $110
- Renewal fee:
(by March 31 each year) $90
- Late renewal fee:
(applications received between April 1 and April 30) $115
- Reinstatement fee:
(applications received after April 30) $140
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Once I become registered, how long will my registration be valid?
Once the initial registration has been obtained, it must be renewed by March 31 of each year. Reminder notices are emailed to all registered HICBs each year to the email address of record.
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I was convicted of a crime in the past. Am I eligible to register as an HICB?
It depends. No individual will be disqualified from registration or have a registration revoked solely because the person has been convicted or engaged in acts constituting any crime or offense, unless the crime or offense has a direct or substantial relationship to the selling or making home improvements or is of a nature such that registration of the person would be inconsistent with the public's health, safety, or welfare. In making this determination, the Division shall consider the following:
- The nature and seriousness of the crime or offense and the passage of time since its commission;
- The relationship of the crime or offense to the purposes of regulating the profession or occupation regulated by the entity;
- Any evidence of rehabilitation of the person in the period of time following the prior conviction that may be made available to the entity; and
- The relationship of the crime or offense to the ability, capacity, and fitness required to perform the duties and discharge the responsibilities of the profession or occupation regulated by the entity.
As set forth in N.J.S.A.45:1-21.5, if an applicant’s conviction was for
murder or certain sex offenses, there is a rebuttable presumption that the
applicant is ineligible to obtain a registration. Applicants disclosing
criminal convictions should provide documents related to the convictions,
including, charging documents, police reports, judgements of conviction,
presentencing reports, and letters confirming probation or parole status.
Applicants may also
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I pleaded guilty, non vult, nolo contendere or had criminal activity similarly disposed, but was not convicted of a crime. Does this count as a conviction?
Yes. You should refer to the answer to question 22 regarding your eligibility to register a contractor business.
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What are some other regulatory requirements affecting HICBs?
HICBs are required to comply with existing regulations, including the requirements that HICBs use written contracts for home improvement jobs that cost more than $500 and that they prominently display their registration number within their places of business, in all advertisements, on business cards, on their commercial vehicles and on all business documents.
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Does an HICB/HECB registration permit me to act as a Public Mover?
No. An HICB/HECB registration does not authorize you to operate as a Public Mover. To engage in the business of public moving or storage, you must obtain a separate license specifically for that purpose from our office. Offering moving services without this separate license is illegal and may result in civil penalties and criminal charges.
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Can I advertise moving services with just an HICB/HECB registration?
No. Advertising moving or storage services without the proper license is prohibited. Misrepresenting your licensure status could lead to fines, legal action, and potential criminal charges.
