How to Check a New Jersey Contractor Before You Sign

New Jersey regulates home improvement contractors more tightly than most states, and the rules exist specifically to protect homeowners from the situations that go wrong. Five minutes of checking before you sign puts you in a completely different position if things sour.

Every contractor must be registered

Any business performing home improvement work in New Jersey must register annually with the Division of Consumer Affairs. Registration requires proof of commercial general liability insurance of at least $500,000 per occurrence.

This is not a formality. A contractor who is not registered cannot pull municipal permits, which means work that needs a permit either does not get one or gets pulled under somebody else's name. Both are problems that land on you, not them, when you sell the house.

The number has to be visible, by law

A registered contractor must display their registration number in four places:

• The original certificate, in their place of business
• All advertisements
• All contracts, invoices and correspondence with you
• All commercial vehicles

That last one is the easiest check you will ever do. If a contractor pulls into your driveway in an unmarked van and hands you an estimate with no registration number on it, you have learned something before anyone has climbed a ladder.

Anything over $500 must be in writing

New Jersey's Home Improvement Practices Act requires a written contract for any home improvement work exceeding $500. Any change to that contract must also be in writing. A verbal agreement to add work is not a change order, and it is exactly how disputes over the final invoice begin.

What happens when a contractor breaks these rules

Violations of the Home Improvement Practices Act are treated as violations of New Jersey's Consumer Fraud Act. That entitles a homeowner to recover triple the amount of their losses, plus attorney fees and court costs.

Triple damages plus fees is an unusually strong remedy, and it is the reason the rules get followed by contractors who intend to stay in business. It is also why a contractor who shrugs at paperwork is telling you something about how long they plan to be around.

The five-minute check

• Ask for the NJ HIC registration number and confirm it appears on the estimate
• Ask for the certificate of insurance, and check it is current and at least $500,000
• Confirm who is pulling the permit, and that it is being pulled in their name
• Get everything in writing, including anything added mid-job
• Check the registration number is on the vehicle that shows up

None of this is adversarial. A contractor who does the work properly has all of it to hand and will not blink. The ones who hesitate are the ones the rules were written about.

Sources

• NJ Division of Consumer Affairs, Home Improvement Contractor registration
• Nolo, New Jersey Home Improvement Practices Act