Homeowners Prevail in Contractor Dispute

In a recent unreported Appellate Division decision, the New Jersey Consumer Fraud Act (CFA) as applied to home contractor disputes was clarified. The contractor had sued the homeowners for $5000 owed on a home improvement contract and obtained a judgment against them. The Appellate Division reversed and dismissed the contractor’s breach of contract claim.

The court based its opinion on the failure of the contractor to sign the contract between the parties, to include his contractor registration number on the contract, to attach a copy of his insurance certificate and to notify the homeowners in the contract that they could cancel the contract within three days of its receipt. These requirements are spelled out in the home improvement practices regulations of the CFA.

The court noted that “a party who has violated the CFA may not obtain damages even if the violation was innocent and committed in good faith”, and therefore refused to enforce the contract against the homeowners.

It was further decided that the contractor could pursue a claim for the reasonable value of the work, which the contractor would need to prove at trial.

Finally, the Appellate Division held that since the homeowners had successfully defended the contract claim by using the CFA, they were entitled under the CFA to recover their attorneys fees and costs from the contractor. Even though they had no ascertainable loss as a result of the contractor’s work, they had proven that the contractor had committed an unlawful practice by failing to adhere to the home improvement practices regulations in the preparation and execution of the contract.

This all goes to show that when you have a contractor dispute, experienced legal counsel is invaluable to learning and enforcing your rights under the law.

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