Scammed by a contractor? N.J. would require licenses to protect homeowners under proposed bill.

A new bill would require new contractors in New Jersey to complete training and pass an exam before they could get a license to do home improvement or home elevation work in New Jersey. The bill would also create a board to regulate the profession and introduce other protections for homeowners.

Current law does not require contractors to get a license. They only have to register with the state and buy a liability insurance policy, far less than what’s required of in many other professions.

The bill was introduced in response to an NJ Advance Media investigation, “Hire at your own risk,” which spotlighted how poorly the current law protects consumers, its sponsors said.

“There’s a real disconnect when someone who is going to paint your nails has to have hours of training, and someone that’s going to pound nails doesn’t need any training,” said Assemblyman Paul Moriarty, D-Gloucester, a primary sponsor of the bill. “Certainly if someone makes an error on your nails, it might ruin your evening at a high fashion event, but if someone doesn’t pound the nails properly, your house can fall down.”

“The stakes are higher with home improvement contractors,” Moriarty said, adding that other states have done a better job regulating contractors.

This bill would establish the New Jersey State Board of Home Improvement and Home Elevation Contractors, which would have nine members: five home improvement contractors, one home elevation contractor, two members of the public and one member appointed by the governor.

The board would create a code of ethics and standards for the industry and establish new education and experience requirements to be eligible for a license, which would be up for renewal every two years.

New contractors would have to complete an apprenticeship or training program or have a minimum of two years of experience under the direct supervision of an approved professional. They would also need to pass an exam that would test their knowledge of the field and related state law, the bill said.

Certain contractors who are already in business would have a different path. Anyone who has been registered as a home improvement contractor for at least 10 years would get a license — pending proof of other requirements — when their current contractor registration expires. Home elevation contractors who have at least 10 years of experience in the home elevation business and who have been registered as a home improvement contractor for at least 10 years, or who have been registered as a home elevation contractor for at least five years, would also be eligible.

“There is presently no standard to which we can hold anyone in this line of work,” said Assemblyman Raj Mukherji, D-Jersey City, the bill’s other prime sponsor.

“We are especially concerned about predatory and unscrupulous contractors that prey upon homeowners after natural disasters such as a hurricane,” he said, noting that the new safeguards would also protect consumers with non-emergency home improvements.

The bill would also help consumers recover money should a job go wrong or a if a contractor takes money and does no work. It’s difficult to get a contractor charged criminally because it’s hard to prove intent, legal experts say, and if a consumer gets a civil judgment, it’s often impossible to collect.

The bill would require licensed contractors to post a $100,000 bond, or a letter of credit or security, to demonstrate financial stability, something that would help consumers recoup money should they suffer damages or incur a loss related to the contractor’s work. Any recovery would not be subject to treble damages, though, unlike what a consumer could otherwise receive under the Consumer Fraud Act.

“This will create guardrails in case problems arise,” Moriarty said. “Bonding will help consumers who are left in a lurch. They will have somewhere to go to get the job finished if someone doesn’t finish the job.”

The bill also imposes fines and penalties if the contractor does not secure construction permits, with fines of up to $10,000 for a first offense and up to $20,000 for a second offense. Penalties for not completing a project would be a violation of consumer fraud laws, the bill said.

As an added protection, municipalities will be prohibited from issuing permits to contractors who don’t have a license.

Also, any applicants who make false statements on their applications would be fined between $10,000 and $25,000 under the bill.

The board would also provide a toll-free telephone number for consumers to ask about contractors.

Moriarty said he expects pushback from some in the industry, calling the bill “a heavy lift.”

“People in this business will be upset and ask for exclusions, but that happens all the time. Any industry that you want to further regulate is going to push back,” he said. “I think it’s common sense. The average person will get the fact that we need better consumer protection in this area and they would be supportive of this.”

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Karin Price Mueller may be reached at [email protected]. Follow her on Twitter at @KPMueller.