In the wake of Hurricane Sandy, the primary consumer protection concern in our area has been home improvement fraud.
As discussed in previous posts, the Consumer Fraud Act ("CFA") is the primary consumer protection law in New Jersey. Many look no further than the CFA when evaluating the legality of a home improvement contract or the actions of a home improvement contractor. However, there are other consumer protection laws that apply to home improvement fraud and that both consumers and their attorneys should be familiar with. The are at least eight New Jersey consumer protection laws that may apply to home improvement contracts:
(1) the Consumer Fraud Act (CFA) (N.J.S.A. 56:8-1, et seq.)
(2) the Contractor Registration Act (CRA - an amendment to the CFA) (N.J.S.A. 56:8-136 - 152)
(3) Home Improvement Practice regulations (HIP) (N.J.A.C. 13:45A-16.1 - 16.2)
(4) Contractor Registration regulations (N.J.A.C. 13:45A:17.1 - 17.14)
(5) the Truth in Consumer Contract Warranty and Notice Act (TCCWNA) (N.J.S.A. 56:12–14 et seq.)
(6) the Construction Lien Law (N.J.S.A. 2A:44A-4 et seq.)
(7) the Door-to-Door Home Repair Sales Act (DDHRSA) (N.J.S.A. 17:16C-95 - 103)
(8) the Door-to-Door Retail Installment Sales Act (DDRISA) (N.J.S.A. 17:16C-61.3 - 61.9)
In this guide, we will review the Door-to-Door Home Repair Act.
The Door-to-Door Home Repair Act was enacted more than 45 years ago - it is one of our older consumer protection laws. In a nutshell, the act provides that if a home improvement contract is signed at any location other than the place of business of the home improvement contractor, and it is for an amount greater than $25.00, then the home improvement contractor must give the homeowner two copies of a "certificate" which provides:
(1) The home repair contractor's name and place of business;
(2) A description of the goods and services sold;
(3) Indicate the amount of money paid by the owner at the time the home repair contract was entered into.
(4) A three day right of rescission in no smaller than 10 point, bold faced, type that reads:
“NOTICE TO OWNER: YOU MAY RESCIND THIS SALE PROVIDED THAT YOU NOTIFY THE HOME RE-PAIR CONTRACTOR OF YOUR INTENT TO DO SO BY CERTIFIED MAIL, RETURN RECEIPT REQUEST-ED, POSTMARKED NOT LATER THAN 5 P.M. OF THE THIRD BUSINESS DAY FOLLOWING THE SALE. FAILURE TO EXERCISE THIS OPTION, HOWEVER, WILL NOT INTERFERE WITH ANY OTHER REME-DIES AGAINST THE HOME REPAIR CONTRACTOR YOU MAY POSSESS. IF YOU WISH YOU MAY USE THIS PAGE AS NOTIFICATION BY WRITING ‘I HEREBY RESCIND’ AND ADDING YOUR NAME AND ADDRESS. A DUPLICATE OF THIS RECEIPT IS PROVIDED BY THE HOME REPAIR CONTRACTOR FOR YOUR RECORDS."
(5) The receipt may not contain a provision in which the homeowner waives his rights under the Door to Door Home Repair Act.
(6) If the contractor regularly deals with homeowners for whom English is not their primary language, then the contractor must provide one certificate in the language of the homeowner and the other in English.
As to the right to cancel, a "business day" is any day other than a Saturday, Sunday or holiday; a "place of business" is a main office, branch office or local office of the home repair contractor; and, “purchase price" means the total price paid or to be paid for goods and services sold pursuant to the home repair contract including all interest and service charges.
If the homeowner elects to cancel the contract by sending the notice of cancellation, then within 10 days the home improvement contractor must refund any monies paid by the homeowner and remove any goods or equipment from the homeowner's property.
The Door-to-Door Home Repair Sales Act does not apply to contracts entered into over the telephone or throughout the mail - it applies to face to face meetings where a contract is signed at a location other than the contractor's office - such as at the home of consumer.
A home improvement contractor who violates the Door-to-Door Home Repair Sales Act may be subject to damages, attorney fees and a $500 statutory penally for each violation.
At least one New Jersey court has found that a violation of the Door-to-Door Home Repair Sales Act is an "unconscionable commercial practice" under the Consumer Fraud Act - which would render the contract unenforceable and result in treble damages. Swiss v. Williams, 184 N.J.Super. 243, 251 (Cty.D.C. 1982) (“It is apparent to the court, and it so determines, that plaintiff's failure to supply defendant with the statutorily mandated information concerning her re-scission rights was an unconscionable commercial practice.") rev’d on other grounds Performance Leasing Corp. v. Irwin Lincoln Mercury, 262 N.J.Super. 23, 32 (App. Div. 1993) (reversing Swiss to the extent it held that the trebling of damages under the CFA is discretionary).
It is likely that if you have a problem with a home improvement contractor, you will need the the protections of several consumer protection laws - including both the Door-to-Door Home Repair Sales Act and the CFA.