Many real estate owners will need to repair or rebuilt their properties in the aftermath of hurricane Sandy. As with any natural disaster, sadly there will be scams as well as unqualified contractors offering construction services. Although one should always exercise caution when engaging a contractor, under the circumstances it is all the more important to be diligent. Reliable contractors will not hesitate to address these and other legitimate concerns. Here are some tips:
- The New Jersey Contractors’ Registration Act, which took effect on December 31, 2005, requires those who sell or make home improvements to register with the New Jersey Division of Consumer Affairs, unless the contractor is exempt. If your home is in New Jersey and you are having work done then your contractor must be registered. Search here to check if they are registered. If the contractor is not registered, make sure to do so as building permits will not issue without registration under the act.
- Be certain there is adequate insurance to protect against any liabilities that may arise during or as a result of construction. The property owner should be given a copy of the contractor’s commercial general liability contract and the telephone number of the issuer.
- All construction agreements must be in writing, with provisions necessary to protect the property owner and contractor. The construction contract should at a minimum detail the work to be undertaken and materials to be used, have the legal name and business address of the contractor, start and completion dates, the total purchase price, but additional terms are advisable. For home improvement contracts, the contractor’s registration number (see above) should be included. A typical construction contract should include far more than those items listed above, but the foregoing is the absolute minimum to be included in the agreement.
- Property owners should investigate the qualifications of the contractor. There are various sources, but two such sources one would be wise to consult are the New Jersey Division of Consumer Affairs and the Better Business Bureau. Verify the contractor’s business address and references. A good place to start finding a qualified contractor is to contact NJBA or one of the local home builders associations affiliated with NJBA. If the contractor is required to be licensed, such as plumbers and electricians, make sure that appropriate licenses are in place.
- Be sure all permits and approvals are obtained before construction is commenced. All repairs and reconstructions will require building permits. Some may require land use approvals as well depending upon the history of the structure, use and approvals for the property. A good place to start for that information is with the local construction official, but given that most local officials will be inundated with inquiries and applications, or have wrong information, it’s best to use this as a starting point and then reach out to competent legal counsel to confirm the conclusions, particularly since many properties can be rebuilt without go back for zoning approvals or are exempt. Notably, all one and two dwelling unit detached residential structures are exempt from site plan approval. Nonetheless, even single family dwellings may require variances in certain instances. The cost and time necessary to seek approvals should be considered for all insurance claims as well.
- Property owners should check their insurance policies and mortgage loan requirements and other contracts related to the property, for relevant provisions, notably notices, that might be required under your existing agreements before engaging a contractor.
- Do not pay cash up front and make sure final inspections and all required certificates of occupancy are obtained before final payment is made to the contractor.
As mentioned, a competent contractor will not hesitate to assist property owners, take these steps and provide the foregoing information. Property owners should insist on as much and contractors should be prepared to give property owners that peace of mind during these very trying times.