NEW JERSEY REGISTER
VOLUME 36, NUMBER 21
MONDAY, NOVEMBER 1, 2004
RULE ADOPTION

LAW AND PUBLIC SAFETY
OFFICE OF THE ATTORNEY GENERAL
DIVISION OF CONSUMER AFFAIRS
NOTICE OF PHASED IMPLEMENTATION OF HOME IMPROVEMENT CONTRACTOR REGISTRATION REGULATIONS

Take notice that on May 13, 2004, Governor James E. McGreevey signed the Contractors' Registration Act (the "Act"), P.L. 2004, c.16 (N.J.S.A. 56:8-136 et seq.), into law amending the Consumer Fraud Act, among other things, to establish a new registration program for home improvement contractors who engage in the business of selling or making home improvements in the State of New Jersey. On August 2, 2004, the Division of Consumer Affairs published in the New Jersey Register (36 N.J.R. 3506(a)) proposed regulations (the "Regulations") to implement the provisions of the Consumer Fraud Act, as amended by P.L. 2004, c.16 (N.J.S.A. 56:8-136 et seq.) by providing procedures for the regulation of home improvement contractors and establishing standards to facilitate enforcement of the requirements of that Act, including the registration procedures for those persons who fall under the requirements of this law.

The Act, which becomes effective on November 9, 2004, prohibits municipalities from issuing construction permits for home improvements to any contractor not registered under the Act. The Division estimates that there are at least 25,000 contractors who would be required to be registered.

As home improvement includes any remodeling, altering, painting, repairing, renovating, restoring, moving, demolishing or modernization of or making additions to residential or non-commercial property, some contractors who do this work may not realize that they will be required to register under the Act.

To minimize disruption and inconvenience to consumers, to permit contractors to complete the registration process while continuing to obtain permits necessary to perform certain work and to give guidance to municipal officials, the Director of the Division of Consumer Affairs has determined that it is necessary to phase in the implementation of the registration program.

In September 2004, the Division sent a mailing, with an application form, to as many home improvement contractors as it was able to identify. However, there may be contractors who were not identified and, thus, may not have received a mailing. The Division is also engaged in an extensive campaign to educate contractors and municipal officials about the registration requirements.

It is anticipated that many of these applications will come in close to the effective date, if not after it. It is likely that the Division will have to review thousands of applications in a short period of time. Applications submitted before the effective date may not be complete or may need clarification. The applicant must be notified to submit missing or clarifying information, which will delay the application review process. There will be applications as to which no decision can be made prior to the effective date of the Act.

The Division recognizes a need to give guidance to municipal officials and to allow contractors to continue to perform home improvement work for consumers and afford consumers as many of the protections of the Act as is practicable, while implementing the registration scheme.

Accordingly, for the purpose of compliance with P.L. 2004, c.16, from November 9, 2004, through February 7, 2005, the Division of Consumer Affairs will consider a contractor registered for the purpose of obtaining each construction permit from a municipality when the contractor: 1) has filed with the Division a completed application, including the disclosure statement, that has not been denied, 2) paid the registration fee by check or money order and 3) provided the appropriate municipal official with a certification attesting to the fact that a completed application for registration has been filed with the Division, which as of the date of the certification has not been denied by the Division. Certification forms will be made available by the Division to municipal officials so that they may provide them to home improvement contractors. In addition, contractors will be provided with an advisory that is to be given to the consumer prior to signing of a contract for home improvement services so that the consumer will be made aware of the contractor's status and compliance.

With the publication of this New Jersey Register, the Division's proposed rules will be adopted and made operative November 9, 2004. The Division recommends that contractors file the application and disclosure statement with the required fee as soon as possible. The Division has already begun processing home improvement contractor registration applications and will make every effort to expedite the review. The Division's review process will give priority to applications filed before November 9, 2004. These steps are designed to facilitate the transition to the Statewide registration scheme and ensure that the goals of the Act are met as soon as is feasible.

The Division is also aware that bills (A3258/S1881) have been introduced in both houses of the Legislature that would delay, until December 31, 2005, the implementation of certain provisions of the Act, including the section relating to the issuance of municipal permits. Interested persons are encouraged to visit the Division's website (www.njconsumeraffairs.com) to determine if these bills become law and the impact that this would have on the rule adoption and notice.



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