New Jersey regulates home improvement contractors under the Contractors’ Registration Act of 2004, N.J.S.A. 56:8-136 and following, and the Division of Consumer Affairs’ rules at N.J.A.C. 13:45A-16 and 13:45A-17. A law approved on January 8, 2024, P.L.2023, c.237, renamed it the Contractors’ Business Registration Act, added workers’ compensation and bond requirements, and created a licensing system for the people who do the work, most of which waits on a new board’s rules. Here is what applies to a home improvement business now, and what is coming.
What counts as home improvement
The statute covers remodeling, altering, renovating, repairing, restoring, modernizing, moving, demolishing or otherwise improving any residential property, including insulation and converting commercial buildings to residential use, but not building a new residence. The Division’s rule (13:45A-17.2) lists examples: driveways, sidewalks, pools, patios, landscaping, fences, porches, windows, doors, cabinets, kitchens, bathrooms, garages, basements and waterproofing, water heaters and softeners, solar heating and water systems, siding, wall-to-wall carpeting and attached floor coverings, including work done under emergency conditions. Residential property means any structure used in whole or in part as a residence, single or multi-unit. The rule leaves out work that must be done by a licensed master plumber, HVACR contractor or electrical contractor; those trades answer to their own state boards.
Who must register, and who is exempt
No contractor business may offer, perform or sell home improvements unless registered with the Division (56:8-138), and advertising yourself as a contractor in New Jersey, in print or electronic media or on a sign or card, brings you under the act (56:8-139). Subcontractors hired by other contractors must register too, while officers and employees working within a registered business’s scope are covered by its registration (13:45A-17.3). Contractors based in other states are covered (56:8-145). Unlike Pennsylvania’s law, the exemptions have no small-volume floor. Those exempt (13:45A-17.4) include:
Registering: the fee, the insurance and the bond
The security’s minimum turns on contract size or the last 12 months’ volume:
| Contract value | Or work in the previous 12 months | Minimum security |
|---|---|---|
| Under $10,000 | Under $150,000 | $10,000 |
| $10,000 to $120,000 | $150,000 to $750,000 | $25,000 |
| Over $120,000 | $750,000 or more | $50,000 |
The security covers penalties the Division assesses and must be topped up as claims are paid; it is not payable for treble-damage claims under the Consumer Fraud Act. Say a siding contractor whose jobs run $12,000 to $25,000 did $400,000 of work in the past 12 months: both tests point to the $25,000 tier.
Showing the number
Your registration number goes in your place of business, in all advertising in New Jersey, on business documents, contracts and correspondence with customers, and on your commercial vehicles (56:8-144). The rule spells out the vehicles: both sides marked with the business name in letters at least one inch high and “HIC reg. #” followed by the number in one-inch letters (13:45A-17.11). Every invoice, contract and letter to a customer must also carry the Division’s toll-free number in a set sentence, in capital letters and at least 10-point bold type; copy the wording from that rule.
What the contract must say
Every home improvement contract over $500, and every change to it, must be in writing and signed by all parties; since the 2024 amendments the statute names the licensed home improvement contractor among the signers (56:8-151). What the statute and the Division’s rule (13:45A-16.2) put on the page, from the registration number and the insurance certificate to the principal products by make and model, is set out in What a Home Improvement Contract Must Say. The rule also requires the name and address of the salesperson who negotiated the deal. And it governs the job itself: it makes it unlawful to start before the required permits are issued, to miss the contract dates for a cause within your control, or to leave a delay without timely written notice, and where inspections are required, it calls for copies of the inspection certificates before final payment is due.
The three-day cancel right
The homeowner’s right to cancel for any reason within three business days, and the 30-day refund, are covered with the federal cooling-off rule in The 3-Day Right to Cancel. Three New Jersey details to build into your paperwork: the notice of cancellation goes by registered or certified mail, return receipt requested, or by hand to the address in the contract; any credit or loan arranged through you is cancelled without penalty; and the contract carries a “NOTICE TO CONSUMER” in at least 10-point bold type, in wording the statute sets out (56:8-151).
The licensing law that is coming
P.L.2023, c.237 also enacted the Home Improvement and Home Elevation Contractor Licensing Act (N.J.S.A. 45:5AAA-1 and following), creating the New Jersey State Board of Home Improvement and Home Elevation Contractors within the Division. Once in force, it requires:
The timing is the point to watch. The licensing requirement and the duty to employ a licensee stay inoperative until the first day of the sixth month after the board adopts its rules (45:5AAA-5; 56:8-138). Check with the Division of Consumer Affairs whether those rules have been adopted and when the clock started; this article does not assume either.
What breaking the rules costs
Breaking the registration act is an unlawful practice under the Consumer Fraud Act, and a knowing violation is a crime of the fourth degree (56:8-146). Transferring a registration to someone else carries a civil penalty of up to $15,000 for a first violation and $25,000 for each later one (56:8-146.1), and the Director may refuse, suspend or revoke a registration (56:8-143). For finding the rules in other states, see Do I Need a Contractor License?
General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.