Put the Deal in Writing

By Carolyne S. Kalson, Esq.

Whether you are a business owner, or home owner (or both), you should be aware of recent changes to the Consumer Fraud Act regarding Home Improvement Contracts. "Home Improvement" means remodeling, altering, repairing, restoring, or even demolishing a residential property. Covered trades include building contractors, painters, landscapers, siding and window installers, and sheet rock and molding workers. Every home improvement contract with a purchase price in excess of $500.00 must now be in writing and signed by the parities. If the contractor does not have a signed contract, they will be unable to prevail in court if the homeowner does not pay for services performed. The contract must contain the sales price including finance charges and the registration number of the contractor. Additionally, the contract must notify the consumer of the right to cancel the contract within three business days. The notice must be "conspicuous" and at least in "10 point bold face". See N.J.S.A. 56:8-151, the example provided in the statute is set forth below.

"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."

In addition to the above, you may also wish to include in your contracts, a binding arbitration clause and a provision that if you are sued and win, the "loser pays" your attorney's fees. 

DISCLAIMER: This article provides general information only and is not intended as legal advice.

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