How 2 NJ Statutes Protect Homeowners From Contractors Who Rip Them Off
New Jersey Consumer Fraud Act
The New Jersey Consumer Fraud Act (“Fraud Act”) is one of the strongest consumer protection statutes in the United States. The Fraud Act allows private citizens to sue businesses who commit fraudulent or misleading actions.
HOME IMPROVEMENT PRACTICES REGULATIONS
The Home Improvement Practices Regulations (“Home Improvement Regs”) are specific rules that contractors must follow in New Jersey. A contractor who violates any of the requirements in the Home Improvement Regs, has automatically violated the NJCFA.
How Does This Help Homeowners?
CONTRACTORS WHO VIOLATE THE FRAUD ACT MUST PAY THEIR VICTIMS’ ATTORNEYS’ FEES AND 3 TIMES THE DAMAGES THEY CAUSE
What Are Your Rights If Your Contractor Commits Consumer Fraud?
1. Attorney Fees
If your case is successful, the contractor will have to pay your attorney’s fees for you!
The general rule (called the “American Rule”) is that all parties to a lawsuit must pay their own attorney’s fees. However, under certain situations, the losing party must pay the other party’s attorneys’ fees. This is one of those situations.
New Jersey courts force contractors who have violated the Fraud Act to pay a homeowner’s attorneys’ fees for them. This means that you do not need to sue your contractor alone. You should hire an attorney to help, and if you win, the contractor will be the one who has to pay your attorney, or give the money you spent on an attorney back to you.
We call this type of statute a “Fee Shifting” statute and it is a powerful tool your attorney can use to get your contractor to settle your case quicker and get you paid without waiting the multiple years that a lawsuit can sometimes take.
2. Treble Damages
If you win your case, your contractor will also have to pay you THREE-TIMES the damages they caused you. The Fraud Act requires courts to award a successful homeowner three-times the damages a contractor causes them. This damages rule is plainly mandatory and is expressly stated within the statute.
This means that if your contractor caused you $10,000 in damages, they will have to pay you $30,000, plus pay for your attorney for suing them!
What Does this Mean for Homeowners?
It means you should talk to an attorney about your contractor issue. These statutes are set up the way it is so that you do not need to try to negotiate with a fraudulent contractor alone. They were put in place to protect homeowners and make hiring an attorney attainable for victims of fraudulent contractors.
Don’t Bring a Case Against a Contractor Alone. Hire an Attorney.
Since the Fraud Act and the Home Improvement Regs force a contractor to pay your attorney’s fees if you win, you should talk to an attorney before filing a lawsuit against your contractor.
We have seen several cases where a homeowner took time to file a lawsuit against their contractor, and paid the court fees to start the case, before discovering that the contractor’s lawyer made the process difficult, and the homeowner then needed to hire our firm. In each of those cases we had to refile additional documents and basically start again from scratch. All of the work the homeowner did to sue their contractor, and all the court costs the homeowner already paid was for nothing, because it had to be redone in order to properly secure the protections of these statutes.
The process can be difficult to handle without an attorney. That is why the statutes were put in place. They allow even price conscientious consumers to hire competent counsel to advocate for their rights.
The lesson to learn from this is that homeowners should speak with an attorney immediately once they believe their contractor has committed a fraud or taken money from them without performing the work they were hired to do.
We offer free consultations for NJ homeowners with contractor issues. During this consultation, we will discuss your options and practical actions which can make you whole.
