Hardly a week goes by that Assemblyman Anthony Impreveduto (D-32nd Dist.) fails to hear a complaint about home improvement contractors. People call him to complain that a contractor took a deposit but never came to do the work, or that a contractor started the work and then vanished, leaving the job half finished for weeks or even months. Some complain that bills submitted after the work was complete exceeded the original estimate by fantastic amounts.
“These are innocent people who just wanted to get their kitchens redone or a basement converted,” Impreveduto said recently. “They had no way of knowing they were going to be ripped off. Worse, they didn’t know who they could trust when they went out looking to find someone to do the work.”
Trouble finding an honest contractor is nothing new. Even writers like Mark Twain have complained about the struggle over the years. While many people seek professional contractors by word of mouth, some don’t know whom to trust.
Even Home Depot has a policy against recommending specific contractors, even though they do contract some work out. These complaints have prompted Impreveduto to co-sponsor legislation that would help ease the concerns of people looking to hire contractors.
“The truth is,” said Impreveduto, “almost anybody carrying around a tool box can make the claim to do home repairs, and while there are many competent professionals available, there are just as many charlatans.”
Home repair problems generate more complaints each year than any other consumer issue except auto repairs, and they rank first among the state’s senior citizens. Until now, regulators could go after some contractors under the broad Consumer Fraud Act, but that has limited application with most home contracting complaints.
“Each year, more than 50,000 New Jerseyans report to the state and county consumer affairs offices that they have been the victim of unscrupulous home-repair contractors,” said Gov. Christine Whitman, who before her appointment to head the federal Environmental Protection Agency in early January, had promised to sign this legislation if it came to her. “Obviously, the threat of prosecution is not enough to deter these bad apples, and we must now go a step further.”
The bill will close “the loophole on one of the greatest problems of consumer fraud,” said Mark Herr, director of the Division of Consumer Affairs.
This bill, which passed the Assembly Consumer Affairs and Regulated Professions Committee in late December, could change all that.
Five-year effort
For over five years, Impreveduto and Assemblyman Jeffrey Moran (R-9th Dist.) pushed to require that home improvement contractors be registered and bonded before they open shop.
Under the proposed bill, home improvement is defined to mean the remodeling, altering, renovating, repairing, restoring, modernizing, moving, demolishing, or otherwise improving or modifying of the whole or any part of a residential or non-commercial property. Home improvement also includes insulation installation, and the conversion of existing commercial structures into residential or non-commercial property.
It would require home repair contractors to register with the Division of Consumer Affairs, which would have the power to reject or rescind a registrant for fraud, gross negligence or gross incompetence. Violators also would face fines up to $10,000 for a first offense and higher for repeat offenses. To be registered, a contractor would need to be bonded – probably for $20,000 – so a consumer would have a means to recoup losses.
The bill further requires those registered as home improvement contractors who enter into home improvement contracts to maintain a bond, letter of credit or securities in an amount of $20,000 for a contractor with less than $100,000 of gross sales in the previous calendar year. This principal sum would increase by $5,000 for each additional $100,000 of gross sales in the preceding calendar year. Any home improvement contractor with a net worth of more than $50 million is not required to satisfy this security requirement.
Handymen who never do jobs costing more than $1,000 would be exempt, but other contractors would have to register. Two elements of the bill would be particularly beneficial to consumers: The contractors would have to post their registration number on business cards and advertising, just as plumbers and electricians do now. This means that consumers would be able to identify registered contractors quickly, and to spot the scam artists or fly-by-nighters, who often come from out of state to make a quick killing and depart before the victims realize they’ve been defrauded.
How to back out
Consumers would be given three business days to back out of a home repair contract. The bill specifies that a home improvement contract may be cancelled by a consumer for any reason at any time before midnight of the third business day after the consumer receives a copy of the contract. Also, the contract would contain a conspicuous notice informing the consumer that he has the right to cancel within three days of signing without penalty.
The three-day cancellation policy already exists against other high-pressure door-to-door salespeople.
Furthermore, the bill requires the director of the Division of Consumer Affairs to conduct a program of public education to educate and inform home improvement contractors and consumers of its provisions. The bill also stipulates that the director would provide a toll-free telephone number for consumers making inquiries regarding home improvement contractors.
Under current law, any person who violates the provisions of the consumer fraud law is liable to a penalty of not more than $7,500 for the first offense and not more than $15,000 for the second and each subsequent offense. The bill revises the penalty amounts by providing that any person who violates the consumer fraud law will be liable to a penalty of not more than $10,000 for the first offense and not more than $20,000 for the second and each subsequent violation of that act. Additional violations may be established within a single proceeding or in separate proceedings.
Other Impreveduto legislation advances
Also in December, the Assembly Appropriations Committee released a bill that would allow New Jersey schools to develop education programs warning students about the dangers of compulsive gambling.
“Juvenile gambling threatens to reach epidemic proportions in this state,” Impreveduto said. “It is imperative that children are warned about the dangers of compulsive gambling before they fall prey to a sordid and depraved underworld of hustlers and loan sharks.”
The bill directs the state Department of Education to develop anti-compulsive gambling strategies similar to existing anti-alcohol and anti-drug abuse programs in public schools. The measure would also earmark $200,000 for the state to contract with the Council on Compulsive Gambling of New Jersey, Inc. to implement the gambling-control curriculum.
Impreveduto has crusaded for better laws to combat compulsive gambling among teenagers. He initiated this bill in November, 1992 and has sought its enactment ever since.
Also on Dec. 7, the Assembly Education Committee released Impreveduto-sponsored legislation that would allow individuals to pay for future college education costs by pre-paying at today’s tuition rates.
“With a pre-paid tuition program, New Jersey’s middle class working families will be better able to meet the challenge of sending children to college,” Impreveduto said. “This will help to greatly [alleviate] the parental anxiety about paying for a child’s college education.”
The bill, the New Jersey Prepaid Higher Education Expense Program Act of 2000, would provide a means for families to pay for their children’s college studies at rates greatly below what the costs would be at the time of actual attendance.
“Being able to pay in advance for the cost associated with enrolling in a public institution of higher education – such as a community college, four-year college or a university – is an excellent planning tool for a number a New Jersey families who find these costs both a financial burden and challenge,” Impreveduto said.