Hiring a Contractor After Storm or Fire Damage in New Jersey: Registration Contracts and Permits

Hire a home improvement contractor who is registered with the New Jersey Division of Consumer Affairs, get a written contract with the registration number, the price and the dates, make sure the permits the work needs get pulled, and never pay for the whole job up front. After a storm or a fire, the pressure to sign something fast is at its highest, and that's exactly when these checks protect you the most.

I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living. Before real estate, I was a New Jersey home builder and residential remodeler, so I've seen these contracts from the contractor's side of the table. Here's what the state's rules say, in plain terms, for homeowners in Monmouth and Ocean County.

What should you do before you call a contractor?

• Report the claim. The New Jersey Department of Banking and Insurance (DOBI) says to call your agent or insurance company as soon as possible to report the loss, and to write down the claim number and the adjuster's contact information.
• Stop more damage. DOBI says to make any necessary temporary repairs to protect the property from further loss, such as boarding up broken windows, and to save every receipt for your claim.
• Ask how the money gets paid. The Consumer Financial Protection Bureau suggests checking with your insurance company and your mortgage servicer about how and when the insurance money is distributed before you hire anyone. Here's how a claim check made out to you and your lender works.

The claim itself has its own steps; here's how a storm damage claim works in New Jersey.

Does a New Jersey contractor have to be registered?

Yes, in most cases. The Contractors' Registration Act requires home improvement contractors to register with the Division of Consumer Affairs. The Division's consumer brief covers roofing and siding, windows and doors, kitchens and bathrooms, finished basements, basement waterproofing, insulation, additions and more. Three points from the brief matter after damage:

• Contractors who aren't registered "will not be issued municipal construction permits."
• Registration "does not constitute an endorsement of or approval for" the contractor. It's a starting point, not a recommendation.
• Licensed plumbers, electrical contractors and architects don't register as home improvement contractors when they work within their profession. Check their license with the Division's licensee search instead.

The brief suggests contacting Consumer Affairs, at 800-242-5846 or NJConsumerAffairs.gov, to confirm the registration and see whether complaints have been filed, and getting written estimates from at least three contractors.

What does the contract have to say?

Under the Division's brief, a contract for a project costing more than $500 must be in writing and must include:

• The contractor's legal name and business address
• A start date and a completion date
• A description of the work and the total price
• The contractor's registration number

The contractor must also give you a copy of its commercial general liability insurance policy and the insurance company's phone number. The brief adds three more pieces of advice: get warranties and guarantees in writing, name the brands or grades of materials in the contract, and ask for a lien waiver before you sign. The CFPB goes further after a disaster and suggests requesting a lien waiver at the start and for each phase of the project.

Can you cancel a contract you signed in a hurry?

Yes. The Division's brief says a signed contract may be canceled by the consumer for any reason before midnight of the third business day after you receive a copy. Put the cancellation in writing and either deliver it in person or send it by registered or certified mail, return receipt requested, with a photocopy by regular first-class mail.

How much should you pay up front?

Not the whole job. The brief says the law prohibits a contractor from demanding the final payment before the work is completed, and it tells homeowners to be wary of a contractor who asks for more than a third of the total before work begins, demands cash, or says you don't need a written contract. Final inspections must be completed before the final payment.

Does storm or fire repair need a permit?

Often, yes. New Jersey's Uniform Construction Code lets ordinary maintenance happen without a permit, but under N.J.A.C. 5:23-2.7, that doesn't include cutting into a load-bearing wall, removing a structural beam, work affecting structural or fire safety, or most changes to piping and electrical wiring. Fire damage tends to reach exactly those things. Ask your municipal construction office before work starts.

The Division's brief adds a warning: if you apply for the permit yourself, list the contractor's name and number on the application, and don't say you're doing the work yourself when you aren't, because you may give up protections the law gives you. Work done without permits can also come back when you sell. Here's what you have to disclose about past damage.

What are the warning signs after a storm?

From the Division's brief and the CFPB's disaster guidance, be wary of:

• A contractor who approaches you unasked, claiming to be in the neighborhood with a good deal
• Door-to-door repair offers that ask for payment up front or promise deep discounts
• Only a P.O. box for a business address, or no registration number
• Anyone posing as a government employee or an insurance adjuster

Write down the registration number, name, street address, phone number, license plate and vehicle description of anyone you hire. The brief notes that information helps law enforcement if a problem comes up.

How can a builder's eye help you decide?

I don't handle or negotiate your insurance claim. That's between you and your insurer. What I do is walk the house the way a builder does, from the roof to the mechanicals, help you get repair estimates from trades I know, and lay out two plans with the numbers for each: repair and sell, or sell as-is. If selling is on the table, start with what the home is worth. How I plan around a change like this is on my life events page, and the Life Events Guide walks through the order of operations.

Frequently Asked Questions

How do I check if a contractor is registered in New Jersey?

Contact the Division of Consumer Affairs at 800-242-5846 or NJConsumerAffairs.gov. The Division can confirm the registration and tell you whether complaints have been filed.

Can I cancel a home improvement contract in New Jersey?

The Division's consumer brief says you can cancel for any reason before midnight of the third business day after you receive a copy of the signed contract. Do it in writing, delivered in person or by registered or certified mail.

Do I have to use the contractor my insurance company recommends?

No. DOBI's homeowners guide says you are not required to use the company's recommended contractor.

Do I need a permit to repair storm damage?

It depends on the work. Ordinary maintenance doesn't need one, but structural, fire safety, plumbing and most electrical work does. Your municipal construction office makes the call.

This is general information, not legal, tax or lending advice. Program rules come from the Division of Consumer Affairs, DOBI and the CFPB and may change.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. Read more about Dennis Mark.

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• Where you live while your home is repaired
• Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.