New Jersey’s 2024 Contractor Fraud Prevention Laws Are a Game-Changer for Homeowners Fighting Roofing Scams

If you’re a New Jersey homeowner who’s ever worried about being taken advantage of by unscrupulous contractors, 2024 brought significant new protections your way. In January 2024, Governor Murphy signed P.L. 2023, c. 237 into law, introducing changes to home improvement contractor licensing requirements in New Jersey, with particularly strong implications for roofing contractors who have historically been among the worst offenders in contractor fraud cases.

What Changed in 2024: Stronger Financial Protection for Homeowners

The legislation, which amended the Contractors’ Business Registration Act (CBRA) and introduced the Home Improvement and Home Elevation Contractor Licensing Act, requires all home improvement and home elevation contractors to provide financial security in the form of a compliance bond, irrevocable letter of credit, or other acceptable securities. These changes aim to enhance consumer protection and ensure that contractors meet specific security requirements.

This is particularly important for roofing work, where homeowners often face significant financial exposure. The principal sum of the compliance bond varies based on the value of the contracts: $50,000 for contracts valued at more than $120,000 or for services performed in the previous 12 months for contracts valued at a minimum of $750,000. There are three different required additional security amounts; $10,000, $25,000 or $50,000. How you determine which bond amount you need is based on either your singular contract amounts or your yearly contract totals.

How These Laws Protect You From Roofing Scams

A bond is a three-way contract between a bonding company, or surety, who guarantees that someone (in this case, a contractor business) will fulfill some obligation to a third party (in this case, a consumer). If the contractor doesn’t fulfill its obligations, the surety is on the hook by the terms of the bond to see that the obligations are performed and that valid consumer claims are paid up to the full bond amount, which the contractor must then reimburse in full.

This means if your roofing contractor takes your money and disappears, performs shoddy work, or violates other regulations, you now have a financial safety net beyond just trying to sue the contractor directly. The bonding company becomes responsible for making you whole, up to the bond amount.

The New Jersey Legislature passed a new law regulating home improvement and home elevation contractors, which Governor Murphy signed into law on January 8, 2024. The regulations governing home improvement contracts and home elevation contractors were already draconian, but the new law is a sea change, greatly expanding the regulatory requirements for New Jersey contractors, including a new requirement that they be licensed. It applies to all home improvement jobs with a value of over $500, but includes new regulations for “principal” home improvement and home elevation contractors on jobs of $120,000 or more.

Enhanced Penalties for Contractor Violations

New Jersey already had strong consumer protection laws, but the 2024 legislation strengthens enforcement. For a homeowner to prove a violation of the New Jersey Consumer Fraud Act because of violation of home improvement practices regulations, the homeowner must prove that the home improvement contractor engaged in unlawful conduct prohibited by the Consumer Fraud Act and regulations, an ascertainable loss, and that the consumer fraud violation had a “causal relationship” with the ascertainable loss. However, the requirement that homeowners prove ascertainable damages resulting from the consumer fraud protects legitimate contractors.

Noncompliance with the requirements of the Home Improvement Practices Act can be costly. A violation of the Home Improvement Practices Act is also a violation of New Jersey’s Consumer Fraud Act, which enables New Jersey homeowners to seek triple the amount of any losses caused by a home improvement contractor. Additionally, the homeowner might be able to recover attorneys’ fees and costs in a lawsuit.

What This Means for Choosing a Roofing Contractor

When selecting a roofing contractor nj, these new laws provide additional peace of mind, but you still need to do your homework. Look for contractors who not only meet the new bonding requirements but also demonstrate a long track record of quality work and community involvement.

A. Russo & Son Roofing exemplifies what homeowners should look for in a contractor under these new regulations. A Russo & Son Roofing Siding & Gutters is a locally owned, family-run business serving Monmouth and Bergen County, NJ for over 40 years. Our commitment to quality craftsmanship and careful cleanup after every job sets us apart in the roofing industry. We are not just contractors; we are a part of the community we serve. We offer a 30-year labor warranty and a 20-year workmanship warranty, underlining our confidence in the quality of our work. We are also licensed and insured.

Red Flags Still Matter

While the new bonding requirements provide important financial protection, homeowners should still watch for common roofing scam warning signs. Failure to provide contractor’s insurance information. Failure to have a written contract for home improvement work. Failure to state start dates and completion dates in the written contract. Failure to obtain proper licenses and permits prior to performing work. Seeking payment before it is due under the terms of the contract or before the work is complete are all violations that can trigger Consumer Fraud Act penalties.

The Bigger Picture: A Win for Legitimate Contractors Too

These new laws don’t just protect consumers—they also help legitimate contractors by raising the bar for the entire industry. Companies like A. Russo & Son Roofing, which already maintained high standards, now operate in a marketplace where fly-by-night operators face higher barriers to entry and greater consequences for poor performance.

Our owner is present at every job, making sure that our work meets the highest standards. Our long-standing presence in the community, coupled with our commitment to quality and customer service, makes us the ideal choice for your roofing needs. We offer free estimates, a satisfaction guarantee, and are always ready to respond in case of emergencies.

Moving Forward: What Homeowners Should Do

As these new regulations take full effect, homeowners should verify that any roofing contractor they’re considering has met the new bonding requirements. Contact the Division of Consumer Affairs to verify a contractor’s registration with the state. Check on licensing and complaints. Contact the local Consumer Affairs office to ensure that the home improvement contractor you are looking to hire is registered with the state and inquire if any complaints have been filed against the contractor.

The 2024 legislation represents a significant step forward in protecting New Jersey homeowners from contractor fraud, particularly in the roofing industry where scams have been prevalent. While no law can eliminate all risk, these new requirements create meaningful financial protection and accountability that should give homeowners greater confidence when investing in their most important asset—their home.

For roofing work specifically, choose contractors who not only meet the new legal requirements but exceed them with strong warranties, local presence, and a proven track record of quality work. The combination of stronger laws and careful contractor selection creates the best protection against roofing fraud in New Jersey’s history.