Home & Boat Repair Fraud Frequently Asked Questions

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• What is home repair fraud?
• Who is a home repair contractor?
• What types of construction are considered "home repairs?"
• What must home repair contractors do when doing business in New Jersey?
• What information must the home repair contract include?
• Can I cancel my home repair contract?
• What other rules must home improvement contractors follow in New Jersey?
• What is boat repair fraud?
• What types of watercraft repairs are covered by New Jersey regulations?
• What must repair dealers do per the watercraft repair regulations?
• What can I recover if I have a valid home or boat repair fraud claim?
• What do I do to find out if I have a case?

What is home repair fraud?

New Jersey regulates the conduct of home repair contractors. The New Jersey Legislature passed a law called the Contractors’ Registration Act and the New Jersey Division of Consumer Affairs adopted regulations that protect consumers from deception, misrepresentation and unconscionable practices engaged in by home repair contractors and that require such contractors to follow certain minimum procedures when dealing with the public. Failure to follow these laws and regulations can lead to violations of the New Jersey Consumer Fraud Act, which allows certain defrauded and injured individuals to recover 3 times the amount of damages, plus court costs and attorney's fees. This article only discusses certain consumer rights and remedies under the Contractors' Registration Act (and not all rights and remedies under every New Jersey statute or administrative regulation involving home repair fraud).

Who is a home repair contractor?

Under the Contractors’ Registration Act, a contractor is any person engaged in the business of making or selling home improvements, including business organizations and its officers, representatives and employees. The Contractors’ Registration Act applies to:

• Persons who, on or after December 31, 2005, advertise in print or puts out any sign or card or other device indicating to the public that they are a contractor in New Jersey or who causes their name or business name to be included in a classified advertisement or directory in New Jersey under a classification for home improvements covered by the Act.
• Persons engaging in any of the activities regulated by the Contractors’ Registration Act in New Jersey, including those located outside New Jersey.

The Contractors’ Registration Act does not apply to persons who:

• Place simple residential alphabetical listings in standard telephone directories about home improvements.
• Must register under the "The New Home Warranty and Builders' Registration Act".
• Perform home improvements upon a residential or non-commercial property they own, their family owns or a bona fide charity or other non-profit organization owns.
• Regulated by New Jersey as an architect, professional engineer, landscape architect, land surveyor, electrical contractor, master plumber or any other person in a related profession requiring registration, certification or licensure by New Jersey and acting within their trade.
• Employed by a community association or cooperative corporation.
• Public utilities as defined by New Jersey Law.
• Licensed under N.J.S.A. 17:16C-77.
• With a net worth of more than $50,000,000 or employed by that retailer.

What types of construction are considered "home repairs?"

The Contractors’ Registration Act defines home improvement repairs as the remodeling, altering, renovating, repairing, restoring, modernizing, moving, demolishing, or otherwise improving or modifying of all or part of any residential or non-commercial property and insulation installation and conversion of existing commercial structures into residential or non-commercial property. The Act defines "residential or non-commercial property" as any single or multi-unit structure used in totally or partially as a residence and associated structures and the lot or site where the structure is located and which is devoted to the structure’s residential use.

What must home repair contractors do when doing business in New Jersey?

The Contractors’ Registration Act requires certain home repair contractors to:

• Register with the New Jersey Division of Consumer Affairs annually & pay a fee.
• File an amended registration within 20 days after their registration information changes.
• Prominently display their registration numbers at their places of business, in all advertisements distributed in New Jersey, on business documents, contracts and correspondence with New Jersey home improvement consumers and on all New Jersey registered commercial vehicles and leased or owned and used by registrants to provide home improvements (except for vehicles leased or rented to customers of registrants by a registrant or any agent or representative thereof).
• Prominently state the Division of Consumer Affairs’ toll-free telephone number for consumers making inquiries regarding contractors on any invoice, contract or correspondence given to a consumer.

What information must the home repair contract include?

Under the Contractors’ Registration Act, every home improvement contract regulated by the Act for over $500 and all changes to the contract must be:

• In writing & signed by all parties to it.
• Clearly and accurately set forth in legible form and in understandable language all terms and conditions, including:
  • The contractor’s legal name, business address, and registration number.
  • A copy of the certificate of the contractor’s commercial general liability insurance and the insurance company’s telephone number.
  • The contract’s total price to the homeowner, including finance charges.
  • The following conspicuous notice printed in at least 10-point bold-faced type: "NOTICE TO CONSUMER. YOU MAY CANCEL THIS CONTRACT AT ANY TIME BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER RECEIVING A COPY OF THIS CONTRACT. IF YOU WISH TO CANCEL THIS CONTRACT, YOU MUST EITHER: (1) SEND A SIGNED AND DATED WRITTEN NOTICE OF CANCELLATION BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED; OR (2) PERSONALLY DELIVER A SIGNED AND DATED WRITTEN NOTICE OF CANCELLATION TO: (Name of Contractor), (Address of Contractor), (Phone Number of Contractor). If you cancel this contract within the three-day period, you are entitled to a full refund of your money. Refunds must be made within 30 days of the contractor's receipt of the cancellation notice".
  • The Division of Consumer Affairs’ toll-free telephone number for consumers making inquiries about contractors.

Can I cancel my home repair contract?

Under the Contractors’ Registration Act, on or after December 31, 2005, the consumer may cancel a home improvement contract for any reason at any time before midnight of the 3rd business day after the consumer receives a copy of it. To do so, the consumer notifies the contractor of the cancellation in writing sent registered or certified mail, return receipt requested or personally delivered, to the address specified in the contract. Your attorney can write the appropriate cancellation notice for you. Within 30 days of receipt, the contractor must fully refund of all moneys paid under the cancelled contract and if the consumer executed any credit or loan agreement through the contractor to pay all or part of the contract, cancel the agreement or note without penalty to the consumer and written notice of that cancellation shall be mailed to the consumer in 30 days of receiving the notice.

What other rules must home improvement contractors follow in New Jersey?

Certain contractors must follow the following regulations adopted by the New Jersey Division of Consumer Affairs:

• The Home Improvement Practices Rules require certain contractors to avoid making certain misrepresentations, to include certain language in their contracts and/or invoices and to provide certain warranties and/or guarantees.
• The Home Improvement Contractor Registration Rules requires certain contractors to take certain actions such as securing insurance and displaying certain information.

What is boat repair fraud?

To provide protections to watercraft repair customers, the New Jersey Division of Consumer Affairs adopted rules regarding deceptive practices in watercraft repair.

What types of watercraft repairs are covered by New Jersey regulations?

The Watercraft Repair Regulations apply to all maintenance and repair to watercraft and their engines or motors, but excludes lubrication, oil changes, light bulb installations and other such minor accessories and services. The Regulations define “watercraft" to include any craft, boat or vessel, powerboat, sailboat, motor sailer, mono hull, catamaran or trimaran, documented or registered (if required) in the State of New Jersey or by any other agency having authority to document or register watercraft. The Regulations apply to watercraft repair dealers, who are defined as persons who, for compensation, engage in the business of performing or employing persons who perform maintenance, diagnosis or repair services on any watercraft, its propulsion system (internal combustion or electrical, inboard or outboard) or the replacement of parts including hull planking, fiberglass sections and standing rigging and including boat dealers, repair shops (fixed, mobile or marina) and marinas providing such services. However, the Regulations do not apply to persons when they repair watercraft of commercial or industrial establishments or government agencies.

What must repair dealers do per the watercraft repair regulations?

Under the Watercraft Repair Regulations, watercraft repair dealers must avoid:

• Making or authorizing in any manner or by any means whatever any statement, written or oral, which is untrue or misleading, and which is known or, which by the exercise of reasonable care should be known to be untrue or misleading.
• Commencing work for compensation without securing one of the following:
  • Specific written authorization from the customer stating the nature of the repair requested or problem presented; or
  • If the customer's watercraft is presented to the watercraft repair dealer during other than normal working hours or by one other than the customer, or in other than distress circumstances, oral authorization from the customer to proceed with the requested repair or problem presented, evidenced by a notation on the repair order and/or invoice of the repair requested or problem presented, date, time, name of person granting such authorization and the telephone number if any, at which said person was contacted.
  • Commencing work for compensation without either:
    • Providing the customer with a written estimated price to complete the repair quoted in terms of a not-to-exceed figure; or
    • Providing the customer with a written estimated price quoted as a detailed breakdown of parts and labor necessary to complete the repair. If the dealer makes a diagnostic examination, the dealer may provide such estimate in a reasonable period of time thereafter and to charge the customer for the cost of diagnosis. Such diagnosis charge must be agreed to in advance by the customer. No cost of diagnosis which would have been incurred in accomplishing the repair shall be billed twice if the customer has the dealer make the repair. If the watercraft must be transported to the repair facility where the maintenance, diagnosis or estimate is to be made (in all but distress circumstances), charges for such hauling and/or transportation shall be disclosed in advance and itemized separately on the estimate or invoice; or
    • Providing the customer with a written estimated price to complete a specific repair; or
    • Obtaining from the customer a written authorization to proceed with repairs not in excess of a specific dollar amount (the estimated price of repairs); or
    • If the customer waives his right to a written estimate in a written statement, signed by the customer obtaining from the customer oral approval of an estimated price of repairs evidenced by a notation on the repair or invoice of the estimated price of repairs, date, time, name of person approving such estimate and the telephone number if any, at which such person was contacted; or
  • If the customer's watercraft or certain parts are presented to the repair dealer during other than normal working hours or by one other than the customer, obtaining from the customer either:
    • A written authorization to proceed with repairs not in excess of a specific dollar amount. (the estimated price of repairs); or
    • Oral approval of an estimated price of repairs evidenced by a notation on the repair order or invoice of the estimated price of repairs, date, time, name of person approving such estimate and the telephone number, if any, at which such person was contacted.
• Failing to provide a customer with a copy of any receipt or document they signed when signed.
• Making false promises of a character likely to influence, persuade or induce a customer to authorize the repair, diagnosis, service or maintenance of any craft or its propulsion system.
• Charging the customer for work done or parts supplied in excess of any estimated price given, without the oral or written consent of the customer, which shall be obtained after it is determined that the estimated price is insufficient and before the work not estimated is done or the parts not estimated are supplied. If such consent is oral, the watercraft repair dealer shall make a notation on the repair order and the invoice of the date, time, name of person authorizing the additional repairs and the telephone number called, if any, together with a specification of the additional parts and labor and total additional cost. The watercraft repair dealer shall obtain the consent of any customer before any additional work not estimated is done or parts not estimated are supplied.
• Failing to return replaced parts to the customer at the time of completion of work, provided that the customer, before work is commenced, requests such return, and provided that the parts, by virtue of their size, weight or other similar factors, are not impractical to return. However, parts and components, that are replaced and sold on an exchange basis and those parts that are required to be returned by the watercraft repair dealer to the manufacturer or distributor, are exempt from this requirement .
• Failing to record on an invoice all repair work performed by a watercraft repair dealer or for a customer, itemizing separately the charges for parts and labor, and clearly stating whether any new, rebuilt, reconditioned or used parts have been supplied. A legible copy shall be given to the customer.
• Failing to deliver to the customer, with the invoice, a legible written copy of all guaranties, itemizing the parts, components and labor represented to be covered by such guaranty or in the alternative, delivery to the customer of a guaranty covering all parts, components and labor supplied pursuant to a particular repair order. A guaranty shall be deemed false and misleading unless it conspicuously and clearly discloses in writing the following: i. The nature and extent of the guaranty including a description of all parts, characteristics or properties covered by or excluded from the guaranty, the duration of the guaranty and what must be done by a claimant before the guarantor will fulfill his obligation (such as returning the product and paying service or labor charges); and ii. The manner in which the guarantor will perform. The guarantor shall state all conditions and limitations and exactly what the guarantor will do under the guaranty, such as repair, replacement or refund. If the guarantor or recipient has an option as to what may satisfy the guaranty, this must be clearly stated; and iii. The guarantor's identity and address shall be clearly revealed in any documents evidencing the guaranty.
• Failing to clearly and conspicuously disclose the fact that a guaranty provides for adjustment on a pro rata basis, and the basis upon which the guaranty will be pro-rated; that is, the time, the part, component or item repaired has been used and in what manner the guarantor will perform. If adjustments are based on the price other than that paid by the customer, clear disclosure must be made of the amount but a fictitious price must not be used even where the sum is adequately disclosed.
• Failing to post in a conspicuous place a sign informing the customer that the watercraft repair dealer is obligated to provide a written estimate when the customer physically presents such watercraft to the dealer during normal working hours and, in any event, before work is commenced except in distress circumstances. In addition, copies of any receipts or document signed by the customer, a detailed invoice, a written copy of any guaranty and the return of any replaced parts that have been requested must be provided. The sign must say: "A CUSTOMER OF THIS ESTABLISHMENT IS ENTITLED TO: 1. When a watercraft, its propulsion system (internal combustion, electrical, inboard or outboard) or any part thereof is presented during normal working hours, and in any event before work begins, a written estimate price stated either: (A) PRICE NOT TO EXCEED $ and given without charge; or (B) As an exact figure broken down as to hauling, transporting, parts and labor. This establishment has the right to charge you for this diagnostic service, although, if you then have the repair done here you will not be charged twice for any part of such charge necessary to make the repair. (C) As an exact figure to complete a specific repair. 2. For your protection, you may waive your right to an estimate only by signing a written waiver. 3. Require that this establishment not start work on your watercraft, its propulsion system (internal combustion, electrical, inboard or outboard) or any part thereof until you sign an authorization stating the nature of the repair or problem if you physically present the watercraft here during normal working hours. 4. A detailed invoice stating charges for parts and labor separately and whether any new, rebuilt, reconditioned or used parts have been supplied. 5. The replaced parts, if requested before work is commenced, unless their size, weight or similar factors make return of the parts impractical. 6. A written copy of any guaranty." However, the watercraft repair dealer doesn’t have to provide a written estimate if they don’t agree to do the repair.

What can I recover if I have a valid home or boat repair fraud claim?

If you prove you are entitled to relief under the laws or rules regulating home or boat repair, you may receive:

• 3 times the amount of your damages;
• reasonable attorney's fees;
• filing fees; and
• certain costs associated with your lawsuit.

Depending on the facts of your case, other types of relief may also be available to you, such as a refund or the return of lost property but expert witness fees are not normally available under these laws/regulations.

What do I do to find out if I have a case?

Click here for a free evaluation or call 609-714-2020.