New Jersey Tightening the Screws on its Home Improvement Contractor Licensing Requirements | Cole Schotz

On January 8, 2024, the State of New Jersey enacted a new law, mandating additional licensing requirements for home improvement and home elevation contractors, with the aim of further protecting New Jersey homeowners and consumers from unscrupulous contractors. As detailed below, it will take some time, however, before the new regulations are promulgated by a newly-created board and become effective.

The Act establishes the New Jersey State Board of Home Improvement and Home Elevation Contractors. The board will be composed of nine New Jersey residents, including licensed home improvement contractors, members of the public, and trade association representatives. The board is tasked with developing new training, education, and experience standards, as well as a code of ethics for new home improvement contractors.

The board’s members are to be appointed no later than April 1, 2024, and must organize within 60 days after their appointment and, thereafter, meet at least once a month.

Six months after the board promulgates its rules and regulations, any individual performing home improvement or elevation services in the State must be licensed by the board. Further, the education and training requirements set forth in the Act will become effective “on the first day of the twenty-fifth month next following enactment,” which will not be until February 1, 2026.

Although existing licensed home improvement contractors in the State will be grandfathered in, new license applicants will be required to complete an apprenticeship, attend a trade school, or have at least two years of supervised experience performing home improvement services. Additionally, new applicants will need to pass an exam to become licensed by the board. Further, and critically, licensees will be required to maintain insurance, as well as a “compliance bond, letter of credit, or securities, moneys or other security” with the board worth at least $100,000 to cover any potential claims by consumers. If any claims are paid out from the compliance bond, letter of credit, securities or other monies, they must be replenished by the licensee.

While the new law will take some time to implement, home improvement and home elevation contractors should become acquainted with the Act and keep their eyes on the regulations as they become proposed by the board and ultimately take effect. We will continue to monitor the new licensing requirements as they fully develop.

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