Update on Proposed NJ Home Improvement & Home Elevation Board

Mar 20, 2023 | Written by: Jacob A. Papay, Jr., Esq. | Share

As per my prior blog of March 23, 2022, New Jersey Assemblymen Moriarty and Mukherji introduced Assembly Bill AS2138 on February 7, 2022 to establish a professional licensing and regulatory Board of Home Improvement and Home Elevation Contractors.  The Bill’s primary purpose was to correct the growing realities that the Consumer Fraud Act and Home Improvement Contract Regulations were not providing homeowners with sufficient protection from, or reimbursement for, the property and financial damages incurred from incompetent and fraudulent contractors for home improvements and home elevation services.  The identical bill in the Senate is S1890.

The Assembly and the Senate bills were pending reviews by the Assembly Consumer Affairs Committee and the Senate Commerce Committee, respectively, for over a year.  The Assembly passed its version of the bill on February 7, 2023.  The bill was received by the Senate on February 28, 2023, and referred to the Senate Budget and Appropriations Committee.  The Senate introduced its version of the bill on March 3, 2023, and referred it to the Senate Commerce Committee for amendment, if needed.  In pertinent part:

1. The bill repeals the Contractors Registration Act, NJSA 56:8-136, and implements credentialing requirements for home improvement and home elevation contractors.
2. The bill applies to all verbal residential home improvement and home elevation contracts under $500.00 and all written home improvement and home elevation contracts of $500.00 or more.
3. The bill creates a nine-member licensing regulatory board of New Jersey residents, initially consisting of five home improvement contractors, one home elevation contractor, two members of the public (one of which is appointed by the Governor with the advice and consent of the Senate), and one additional appointee of the Governor per NJSA 45:1-2.2.
4. The bill requires the contractors to possess credentials as issued and regulated by the Board. The required credentials include either obtaining a license through completion of training courses, test, or apprenticeship.  As to financial responsibility, the bill requires all licensed contractors engaged in home improvement or home elevation services to maintain a minimum of $500,000.00 of commercial general liability insurance.  Every home elevation contractor must also maintain cargo or other insurance in the minimum amount of $1,000,000.00 per occurrence to cover consequential damages sustained by homeowners, tenants, and others from home elevation damages.  In addition, all home improvement and home elevation contractors must post and maintain a performance bond of at least $100,000.00, to be in effect at all times while licensed.  The bond will cover the costs of correcting or completing the work if the contractor defaults.  The bond does not cover exemplary or treble damages under the Consumer Fraud Act.
5. The credential requirements do not apply to home improvement contractors who registered as a home improvement contractor for 10 or more years prior to the effective date of the bill when enacted, or to those who conducted home elevation services for 10 or more years prior to the effective date of the bill as enacted. The financial requirements apply to all licensed home improvement contractors engaged in home improvement services, and to all home elevation contractors engaged in home elevation services.
6. The bill also provides additional requirements that must be included in written home improvement and home elevation contracts, and provisions governing the Board’s regulatory powers.

Presumably, this needed and long-awaited bill will pass the Senate, and Governor Murphy will sign it.

Ordinarily, one may wonder whether we need another regulatory board.  However, it is hard to fault this effort, given the documented abuses sustained by homeowners and tenants from Superstorm Sandy rebuilding through the construction walkouts due to current supply-line issues. Hopefully, if this Bill is passed, the new Board will stick to its mission and not expand into another taxpayer nightmare of bureaucratic largess.

 

Jacob A. Papay, Jr. is a partner with Gebhardt & Kiefer, PC, and practices primarily in the areas of construction defect claims, construction injury claims,  first-party insurer claims, insurance coverage disputes, subrogation, provider health care law, commercial law, defense of professional negligence, and public entity general liability.  He represents numerous insurers, Third Party Administrators, medical groups, and businesses, and he has successfully defended public entity officials and employers in wrongful death, discrimination, excessive force and other civil rights claims.  In addition, Mr. Papay represents small businesses in mergers, acquisitions, trade secrets, employment and unfair trade practice claims. 

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Any statements made herein are solely for informational purposes only and should not be relied upon or construed as legal advice.