Information Alert

Contractors Must Postmark State Registration by Dec. 31

Previously, NJBIA alerted you to the December 31, 2005 deadline for businesses to register with the NJ Division of Consumer Affairs in order to be in compliance with the provisions of the Contractors' Registration Act.

Please be advised that due to the extensive backlog of applications, the Division has recently issued guidance governing your ability to continue working while your application is being processed. The Division will now allow contractors, which have submitted completed applications by December 31, 2005, to continue to pull municipal permits and enter into contracts while their application is being reviewed.

Specifically, contractors will be required to sign a certification with the appropriate municipal officials at the time of applying for a building permit which states that the contractor:

1) Filed a completed application, including the disclosure statement and applicable documents, with the application, by December 31, 2005, which on the date of the certification has not been denied;

2) Has the required minimum $ 500,000 per occurrence commercial general liability insurance policy in full force and effect; and

3) Paid the $90 registration fee.

Certification forms will be made available by the Division to municipal officials so that they may provide them to home improvement contractors.

Similarly, the Division will make an advisory available to contractors which they can provide to a consumer prior to signing of a contract for home improvement services. This form will make the consumer aware of the contractor's registration status and compliance with the Act. These steps are designed to facilitate the transition to the statewide registration scheme and ensure that the goals of the Act are met as soon as is feasible.

Contractors who have questions about the Contractors' Registration Act can call Consumers Affairs at 1-888-656-6225. Additional information also is available on the Consumer Affairs’ web site, http://www.njconsumeraffairs.gov. Please be advised, however, that the backlog has made it difficult for businesses to contact the Division at this number. NJBIA is working with the Division to solve this problem as quickly and efficiently as possible. The Division’s new guidance concerning your ability to continue working while applications are pending should help alleviate some of the phone and voice mail box problems.

Please note to take advantage of this rule you must have your application completed in full postmarked by December 31, 2005.

Contractors who fail to register by this deadline will be prohibited from making or selling home improvements in New Jersey and barred from obtaining local construction permits until they become registered. In addition, they may face civil monetary penalties as well as possible criminal charges if they continue to do home improvements while unregistered. In order to register, a contractor must disclose the location of his/her business and reveal past criminal convictions, among other requirements.

The Contractors' Registration Act:

• Requires home improvement contractors — those who engage in the business of making or selling home improvements including remodeling, altering, painting, renovating, repairing, restoring, modernizing, or demolishing residential or non-commercial property— to register annually with Consumer Affairs.

• Bars anyone who is not registered, unless they’re exempted from the registration requirements, from engaging in business as a home improvement contractor, or advertising that they are home improvement contractors.

• Requires contractors to file proof that they have secured commercial general liability insurance in a minimum of $500,000 per occurrence.

• Bars municipalities from issuing construction permits to contractors who are not registered or exempted from the registration requirements.

• Requires every contractor to post its registration numbers on all New Jersey advertisements, contracts and correspondence with customers and all leased or owned commercial vehicles registered in New Jersey.

• Provides that anyone who knowingly violates the Act is guilty of a crime of the fourth degree. In addition, anyone who violates the Act is also subject to civil monetary penalties under the Consumer Fraud Act of up to $10,000 for the first offense and up to $20,000 for each subsequent offense.

The application packet and copies of the statutes are available at http://www.njconsumeraffairs.gov/contractor.htm. The full text of the Division’s new rule is available at: http://www.njconsumeraffairs.gov/adoption/dcaadopt125.htm.