complianceConstruction Boomed on the Jersey Shore Following Hurricane Sandy

Following Hurricane Sandy, New Jersey’s shore experienced an influx of contractors seeking to demolish, re-build, repair, and/or elevate damaged homes.   General contractors, subcontractors, designers, and suppliers targeted Sandy victims, some even relocating from out-of-state. Many established and reputable companies provided services to Sandy Victims, and homes have been successfully rebuilt using FEMA and insurance monies. However, not all Sandy victims have been made whole. And, unfortunately, some homeowners are facing new issues, resulting from poorly or incompletely constructed homes.

Contractor Regulations

New Jersey regulates contractors using various regulatory programs. The New Home Warranties and Builders’ Registration Act applies to new construction, which must be preformed by a registered new home builder. Home improvements fall under the Contractor’s Registration Act, and must be provided by a registered home improvement contractor. As of August 15, 2014, the home elevation contractor program was implemented, and applies to raising an entire residence or noncommercial structure. Separately licensed individuals, such as plumbers, electricians, HVAC contractors, and architects, fall within different regulatory schemes and requirements. Depending on which “box” a contractors is in, the homeowner protections may be subject to claims of Consumer Fraud, or covered by state mandated warranties, and/or best suited for private litigation.

Not All Contractors are Equal

Unfortunately, some of the contractors monopolizing on Hurricane Sandy damage have left homeowners re-victimized. Incomplete construction, defective construction, mismanagement of insurance proceeds, lack of proper permitting, and similar issues are causing homeowners to seek legal counsel. In my own practice, I have seen an increase in disputes arising out of Hurricane Sandy and from under-qualified contractors, generally. And upon further review, I typically find serious deficiencies in compliance with New Jersey construction and business regulations and breaches of contract, regardless of which regulatory scheme is in play.

Understanding Your Rights

It is very important that property owners dealing with problematic contractors understand their rights and remedies early in the dispute, preferably before payment is made. Determining a sound strategy for addressing construction issues requires experience and knowledge of the laws and issues involved. These include not only the applicable regulations, but also knowledge of contract law, municipal permitting, provable damages, and understanding business law and how to identify contractors using shell companies to avoid liability. New Home Warranties carry with them an election of remedies, limitations on damages, and exclusions. For new construction, court action and/or private arbitration of all claims may be barred if a limited warranty claim is submitted. For home improvements, some owners are entitled to claims for consumer fraud, which allow claims for additional damages and attorneys’ fees. Adding to this complexity, how construction contracts are drafted, the extent of demolition, and how the money flows through a project, also implicate which regulatory schemes apply.

At the end of the matter, homeowners facing construction issues need a complete home, built to code and plans, with proper permitting, without mechanic’s liens, and if applicable, with properly issued warranty. An experienced attorney will help navigate the path towards this outcome.