Would Require Minimum $50,000 Bond for Contractors, Make Failure to Complete Work Unlawful
(TRENTON) – Strengthening consumer protections under the “Contract Registration Act,” (CRA), a bill sponsored by Assembly Democrats John McKeon (D-Essex, Morris) and Paul Moriarty (D-Camden, Gloucester) designed to reduce a consumer’s financial and practical burden and penalize non-compliant contractors cleared the Assembly Regulated Professions Committee Thursday.
The bill (A-2904) clarifies that exemptions from certain requirements under current state statute in the CRA only pertain to registration, insurance, and bonding requirements for home improvement contractors. Home improvement contractors would still be subject to the other requirements of the act.
“Unfortunately, many consumers have experienced home improvement catastrophes while working with contractors who operated unethically by failing to secure property permits or fulfilling their contractual obligation of completing the work,” said McKeon. “In some instances, shoddy work was not discovered until years later which really put homeowners in a bind.”
Currently, consumers whose home has been damaged by a contractor’s violation under the CRA are not guaranteed payment for damages associated with the violation unless it is covered under liability insurance. The bill would provide a funding source for restitution to consumers by requiring registered contractors to post a minimum bond of $50,000. Contractors could post a bond greater than $50,000 for more expensive home improvement work.
The bill also mandates that a contractor be liable for fines or penalties imposed on a consumer due to the contractor’s failure to obtain construction permits.
In addition, the measure makes it unlawful for a contractor to not complete a home improvement job as outlined in the home improvement contract. An unlawful practice under the consumer fraud act is punishable by a fine of up to $10,000 for a first offense and up to $20,000 for a subsequent offense. A violation could also result in a cease and desist order from the Attorney General.
“This bill will help homeowners hold contractors more accountable for their work or lack thereof,” said Moriarty. “Owning a home is a significant investment, and when renovations are made, the work must be completed and up to code in order to protect that investment.”
The bill was introduced on February 1, 2018. It now heads to the Assembly Appropriations Committee for further review.