QUESTIONS? :Frequently Asked Questions
Notice: The following questions and answers are intended for the convenience of contractors who may be required to register under this Act. This should not be considered a legal document nor a complete explanation of the law and should not be relied upon as such. The New Jersey Division of Consumer Affairs (“the Division”) recommends that you consult an attorney if you need legal advice.
1. What is the Contractors’ Registration Act?
The “Contractors’ Registration Act” (the “Act”) establishes a mandatory registration program for contractors who are in the business of selling or making home improvements in New Jersey.
2. What is a home improvement?
Any remodeling, altering, painting, repairing, renovating, restoring, moving, demolishing, or used as a place of residence, or of any portion of the property on which the structure is located, is considered a home improvement for the purposes of the Act. Home improvement includes the construction, installation, replacement, improvement, or repair of driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, windows, doors, cabinets, kitchens, bathrooms, garages, basements and basement waterproofing, fire protection devices, security protection devices, central heating and air conditioning equipment, water softeners, heaters, and purifiers, solar heating or water systems, insulation installation, aluminum siding, wall-to-wall carpeting or attached or inlaid floor coverings, and other changes, repairs, or improvements made to residential property. Construction of a new residence is not considered a home improvement under the Act.
3. Who is a home improvement contractor?
Any person, whether a sole proprietorship, partnership, corporation, limited liability company or any other type of business organization that is engaged in the business of selling or making home improvements is considered a home improvement contractor for the purposes of the Act.
4. Who must register?
The Act requires any contractor engaging in the business of making or selling home improvements, whether an individually owned business or a corporation, limited liability company, partnership, or association, to register annually with the Division, unless specifically exempted from registration under the Act.
5. I am a landscaper and I only mow lawns and trim shrubs. Must I register?
No. However, you must register if you plant flowers, shrubs and trees or lay sod or establish a lawn.
6. What if I do not register?
Any home improvement contractor who is required to register but who has not received a registration number by December 31, 2005 is prohibited from selling or making home improvements. Unregistered contractors who continue to sell or make home improvements may be subject to civil penalties and possibly criminal penalties as well.
7. My home improvement contracting business has been in operation for many years. Is it “grandfathered,” or must it be registered?
All home improvement contractors must register, unless they are exempt. There is no provision for grandfathering.
8. Once I become registered, how long will my registration be valid?
Initial registration is valid until December 31, 2006, after which it may be renewed for additional one year periods by filing an application on a form to be provided by the Division.
9. I only do home improvement jobs “on the side.” Do I still have to register?
Yes. The Contractors’ Registration Act applies to any person, corporation, partnership or association engaging in the business of making or selling home improvements — regardless of whether the home improvements are done on a full-time or part-time basis.
10. I am a subcontractor of a home improvement retailer that has a net worth of more than $50,000,000. Do I have to register?
Yes. A subcontractor of a home improvement retailer must register unless otherwise exempt. However, a home improvement retailer with a net worth of at least $50,000,000 and employees of such a retailer who are making or selling home improvements within the scope of their employment are exempt from registration.
11. I am a subcontractor, paid by the general contractor, and never enter into a contract with the consumer. Do I have to register?
Yes, a subcontractor of a contractor must register.
12. I am licensed as a home improvement contractor by a local town. Do I still have to register?
Yes. Effective January 1, 2006, the Act supersedes any municipal law or regulation that provides for the licensing or regulation of home improvement contractors. However, contractors must still obtain construction permits from the municipality in which they’re working and must submit to inspections by municipal construction code officials.
13. Does the law apply to out-of-state contractors?
Any contractor who sells or makes improvements to homes or non-commercial properties in New Jersey must register with the Division — regardless of whether the contractor is based in New Jersey or some other state.
14. Are there penalties for not registering?
Any contractor who fails to register as required by the Contractors’ Registration Act but who continues to sell or make home improvements or who violates any other section of the law is subject to civil monetary penalties of up to $10,000 for the first offense and up to $20,000 for each subsequent offense. Also, anyone who knowingly violates the Act is considered guilty of a crime of the fourth degree and faces additional fines as well as possible jail time.
