Before you sign with a New Jersey contractor, check three things: its home improvement contractor registration in the state's License Verification System (N.J.S.A. 56:8-138), a certificate for the liability insurance the law requires (N.J.S.A. 56:8-142), and a written contract with everything N.J.S.A. 56:8-151 and N.J.A.C. 13:45A-16.2 require.
Most contractor horror stories, the vanished deposit or the half-finished kitchen, trace back to skipping one of these. Here is each one.
Check one: the registration
No contractor business may offer or perform home improvements in New Jersey without registering with the Division of Consumer Affairs, and it renews every year (N.J.S.A. 56:8-138). The number starts with "13VH", and it has to appear on the contractor's advertising, contracts and commercial vehicles (N.J.S.A. 56:8-144).
Look it up in the Division's License Verification System at newjersey.mylicense.com. Search the business name or the number, and check that the name matches the one on your contract. MHG Contracting's registration is #13VH13286900.
Check two: the insurance
A registered contractor must carry commercial general liability insurance of at least $500,000 per occurrence (N.J.S.A. 56:8-142), and the contract must include a copy of the certificate and the insurer's phone number (N.J.S.A. 56:8-151). Call the insurer to confirm the policy is current. Ask for proof of workers' compensation coverage for the crew as well.
Check three: the contract
Any home improvement contract over $500, and every change to it, must be in writing and signed (N.J.S.A. 56:8-151). New Jersey requires it to include:
- The contractor's legal name, address and registration number.
- A copy of the liability insurance certificate.
- The total price, including any finance charges.
- A description of the work and the main products and materials, with make, model and size where they apply.
- The dates or time period for starting and finishing the work.
- A statement of any guarantee or warranty.
- A "Notice to Consumer" explaining your right to cancel within three business days.
The price, product, schedule and warranty items come from N.J.A.C. 13:45A-16.2; the rest from N.J.S.A. 56:8-151. The same rules say a contractor may not start before the required permits are issued, and may not ask for final payment before the work is finished as the contract describes.
You can cancel within three business days
You can cancel a home improvement contract for any reason before midnight of the third business day after you receive your copy. The notice goes in writing by registered or certified mail, or by hand, to the address in the contract, and your money must be refunded within 30 days (N.J.S.A. 56:8-151).
Warning signs
- No written estimate. Every number and product should be on paper.
- A price far below the others. Usually the scope or the materials are different. Compare line by line.
- A payment schedule that runs ahead of the work. Payments tied to milestones keep both sides even.
- Pressure to sign today. A real price survives a day or two of thinking.
- Changes handled out loud. The law requires them in writing.
Questions worth asking on the first visit
- Who will be on site every day, and are they employees or subcontractors?
- Can I talk to two or three homeowners whose projects you finished recently?
- How do you handle something unexpected once the walls are open?
- Which permits does this job need, and who applies for them?
If you want to see how MHG works, call (609) 712-2474 or ask for a free in-home estimate. Our process is on the process page.
