| Not many home improvement contractors get | | | | The Heath's counter-claim put the case under |
| their day at the supreme court. But it happened in | | | | New Jersey's Consumer Fraud Act. The Heaths |
| New Jersey earlier this year. And there's a lesson | | | | were in line to collect treble damages and their |
| here for residential contractors in many other | | | | attorney fees - not because of any defect in the |
| states. I'll explain. | | | | cabinets but because of a defect in the contract. |
| Jo Anne and Tom Heath selected Czar, Inc., a | | | | What should have been in that contract? |
| Patterson, NJ cabinet shop, to install kitchen | | | | (1) The legal name, business address and |
| cabinets and woodwork in their new home. The | | | | registration number of the contractor. |
| Heaths weren't happy with the cabinets Czar | | | | (2) A certificate of commercial general liability |
| installed and refused to pay. Czar filed suit to | | | | insurance. |
| collect. To this point, it's a story you've heard | | | | (3) The total price including any finance charges. |
| many times. But this is where the case got | | | | (4) A notice of the right to cancel. |
| interesting. | | | | Omit any of those from a home improvement or |
| The Heaths knew a thing or two about New | | | | home repair contract and you've dropped into |
| Jersey home improvement contract law. They | | | | New Jersey's Consumer Fraud Act: full refund, |
| knew Czar didn't have a legal contract. They didn't | | | | triple damages plus attorney fees. |
| have to complain about the job. Instead, they | | | | Unfortunately for contractors, New Jersey isn't |
| could counter-claim over the contract. The Heaths | | | | unique in this respect. Many states give owners |
| filed suit in Morris County for damages, alleging | | | | the right to collect for a defective home |
| violation of the Home Improvement Practices Act. | | | | improvement or home repair contract: Texas, |
| New Jersey Administrative Code sections | | | | Oklahoma, Arkansas, Illinois, Indiana, Tennessee, |
| 13:45A-16.1 to 16.2 (Home Improvement | | | | Ohio, Maryland, Pennsylvania, Connecticut and |
| Practices) and New Jersey Administrative Code | | | | Massachusetts come to mind. |
| sections 13:45A-17.1 to 17.14 (Home Improvement | | | | As for Czar, Inc. I doubt they got much |
| Contractor Registration) require that all home | | | | satisfaction out of their day at the Supreme |
| improvement contracts for more than $500 be in | | | | Court. The Heaths won, of course. It was an |
| writing and include very specific disclosures. Failure | | | | expensive lesson for Czar, Inc. Legal fees on the |
| to include those disclosures in the written contract | | | | way to the New Jersey Supreme Court can run |
| is a violation of New Jersey's Consumer Fraud | | | | many times the cost of kitchen cabinets. Which |
| Act. Penalties include a full refund (New Jersey | | | | proves a point I've made more than once on |
| Statutes Annotated Section 56:8-2.11) or treble | | | | these pages: When a job goes bad, you better |
| damages plus legal fees (New Jersey Statutes | | | | have a good contract. |
| Annotated Section 56:8-19). | | | | |