Your home improvement contract rights in NJ start before anything is signed. State law requires the contractor business to be registered and puts any job over $500 in a signed written contract with set contents. It also gives you a cancellation window, no reason required, that closes at midnight on the third business day after your copy reaches you.
Here is each right in plain language, with the statute or rule behind it and a link to the official text. Nothing here is legal advice. If a dispute comes up, a lawyer or the state consumer affairs office can help.
Does a New Jersey contractor need to be registered or licensed?
Registered. New Jersey bars any contractor business from selling, offering or doing home improvement work on a residence until the Division of Consumer Affairs has registered it. The requirement comes from the Contractors’ Business Registration Act, N.J.S.A. 56:8-136 and following sections.
The law covers remodeling, repair, renovation and similar work on single- and multi-unit homes, but not building a brand-new house. A law signed January 8, 2024, P.L.2023, c.237, gave the act its current name, and registrants are now called Home Improvement Contractor Businesses. Even an individual earning no more than $1,500 per contract and $25,000 a year must register.
The same law created a State Board of Home Improvement and Home Elevation Contractors and a future requirement for individuals doing the work to hold a license from that Board. By statute, that requirement does not take effect until the first day of the sixth month after the Board adopts its rules, and we could not confirm that it has. Until then, the accurate word for a contractor business is registered.
What has to be in the written contract?
Under N.J.S.A. 56:8-151, a home improvement contract priced above $500, and each later change to it, has to be put on paper and signed by everyone who is a party to it. That statute and New Jersey’s practices rules for home improvement contractors, at N.J.A.C. 13:45A-16.2, set the contents:
| The contract must show | Where the rule comes from |
|---|---|
| Legal name and business address of the contractor business | N.J.S.A. 56:8-151 |
| Its registration number | N.J.S.A. 56:8-151 |
| Its liability insurance certificate, copied in, showing the insurer’s phone | N.J.S.A. 56:8-151 |
| Total price, finance charges included | N.J.S.A. 56:8-151; N.J.A.C. 13:45A-16.2 |
| The scope of work, plus the main products and materials by make, model, size and grade where relevant | N.J.A.C. 13:45A-16.2 |
| Start and completion dates | N.J.A.C. 13:45A-16.2 |
| Any warranty on the job | N.J.A.C. 13:45A-16.2 |
| A conspicuous NOTICE TO CONSUMER about cancelling, in 10-point bold type or larger | N.J.S.A. 56:8-151 |
A contract expected to cost $500 or less may be oral under the act. A written one still protects both sides, and every job we do gets one.
Read the materials line closely. “Metal roof” is not a description; naming the panel profile, the metal and its gauge, and the finish color is. If a warranty is promised, it belongs in the contract too. Our warranty page shows how our workmanship warranty sits alongside the manufacturers’ coverage.
How does the three-day cancellation work?
By written notice, before midnight on the third business day after your copy of the contract is in your hands. You do not need a reason. Under N.J.S.A. 56:8-151(b), the notice must go by registered or certified mail with a return receipt requested, or be delivered in person. The contractor must refund all the money you paid within 30 days.
Step by step
- Note the date your copy of the signed contract reached you. The three business days count from then.
- Write a short, dated letter saying you are cancelling the contract. Include the contractor business’s name, the contract date, the job address and your signature.
- Mail it certified or registered, return receipt requested, or hand it over in person and ask for a dated acknowledgment.
- Keep a copy of the letter, the mailing receipt and the return receipt card.
- If you arranged credit through the contractor, the statute cancels that agreement too, without penalty.
- Expect the refund within 30 days.
A simple letter works: “I am cancelling the home improvement contract dated (date) between me and (contractor business name) for work at (address). Please refund all payments as required by N.J.S.A. 56:8-151.” Sign and date it.
The clock runs in business days, not calendar days. If you are unsure where the deadline falls, do not wait for the last day; send the letter right away.
What insurance and security must a registered contractor carry?
Three things, since the 2024 law. To get, renew or reinstate a registration, a business must carry commercial general liability insurance of at least $500,000 per occurrence and workers’ compensation insurance unless legally exempt. It must also post an additional security, such as a compliance bond or an irrevocable letter of credit, according to a Division of Consumer Affairs notice.
Older web pages that mention liability insurance alone are out of date. The security amount scales with the contractor’s work, under N.J.S.A. 56:8-142:
| Minimum security | Contractor’s work |
|---|---|
| $10,000 | Contracts under $10,000, or under $150,000 of contracts in the prior 12 months |
| $25,000 | Contracts from $10,000 to $120,000, or $150,000 to $750,000 in the prior 12 months |
| $50,000 | A contract over $120,000, or at least $750,000 in the prior 12 months |
The Division’s notice also said existing registrations expired March 31, 2025. A certificate dated before then does not show a current registration, so ask to see the current one.
How do you check a contractor’s registration?
Get the number, then confirm it with the agency that issues it, the Division of Consumer Affairs. The number should be easy to find. Under N.J.A.C. 13:45A-17.11, a registered contractor must display it on advertisements, business documents, contracts and correspondence. Work vehicles registered in New Jersey must show the business name and number on both sides in letters at least one inch high.
- Find the registration number on the estimate, contract, website or truck. A 2012 Attorney General release said the numbers begin with 13VH, though the certificate itself is what counts.
- Run the number and the exact business name past the Division of Consumer Affairs. The name should match the legal name on the contract.
- Call the insurer at the phone number on the liability certificate in your contract, and confirm the policy is active and names the same business.
- Ask whether the business carries workers’ compensation or is legally exempt.
A contractor who cannot or will not give you a registration number is telling you something before the job starts.
What other rights do you have during the job?
The practices rules add protections that run through the whole project:
- Permits first. A contractor may not start work until any required building permits are issued. Many re-roofs need none; our roof permit guide explains when they do.
- Inspection certificates. The contractor owes you copies of any required inspection certificates, and they are due before you make the final payment.
- Final payment last. A contractor may not ask for final payment, or for a completion certificate, before the work is complete.
- Changes in writing. Any change to a contract above $500 needs its own signed, written record. A surprise such as rotted roof decking becomes a signed change order with a price.
Sales tax is the other money question. Hand the contractor a filled-out Form ST-8, and new roofing, siding or gutters are treated as an exempt capital improvement. That rule appears in Bulletin S&U-3 from the Division of Taxation. A repair, by contrast, is taxable. You do not need to be registered with the state to issue the form. The bulletin adds that the contractor owes tax on the supplies it purchases for the job.
For taxable work billed as one lump sum without separating materials and labor, the homeowner bulletin S&U-2 says tax applies to the whole bill. New Jersey’s sales tax rate is 6.625 percent.
How does New Jersey Seamless handle contracts?
The way the law reads, with nothing left to a handshake. Every job gets a written estimate and a written contract. The contract names the product, its gauge or thickness, its finish and color, the total price, the start and finish dates and the warranty, and it carries the cancellation notice.
Changes get a signed change order before the work, and final payment comes after the walk-through. Our process page lays out each stage. When you are ready, request a free estimate, or contact us with your questions first.
Get a free estimate
Or call (732) 231-5327.
Contract rights questions
What is the deadline to cancel a home improvement contract in New Jersey?
You have until midnight on the third business day after your copy arrives. Put the cancellation in writing and send it certified or registered mail with a return receipt, or deliver it in person. The refund is due within 30 days.
Does a home improvement contract under $500 have to be in writing in NJ?
Not under the statute: a contract expected to cost $500 or less may be oral. Above $500, the contract and every change to it have to be on paper and signed by everyone involved. A written agreement is still the safer choice for any job.
Are home improvement contractors licensed in New Jersey?
The Division of Consumer Affairs registers contractor businesses. A 2024 law created a board and a future license for individuals, which takes effect six months after the board adopts its rules, so look for a registration number.
What insurance does a New Jersey home improvement contractor need?
Three things: commercial general liability insurance of at least $500,000 per occurrence, workers’ compensation unless legally exempt, and an additional security. That security, such as a compliance bond or letter of credit, runs from $10,000 to $50,000 depending on the size of its work.
How can I check a contractor’s registration in New Jersey?
Get the registration number from the contract, estimate, ads or truck, then ask the state’s Division of Consumer Affairs to confirm both the number and the business name. Also call the insurer listed on the liability certificate in your contract to confirm coverage.
Is a new roof subject to New Jersey sales tax?
Not if you give the contractor a filled-out Form ST-8. The NJ Division of Taxation counts new roofing, siding and gutters among exempt capital improvements, while repairs are taxable.
Sources
- New Jersey Legislature, P.L.2023, c.237 (Contractors’ Business Registration Act, N.J.S.A. 56:8-136 and following, including 56:8-142 and 56:8-151)
- NJ Division of Consumer Affairs, notice on changes to the law and new registration requirements, and Division home page
- N.J.A.C. 13:45A-16.2, home improvement practices (Cornell Legal Information Institute copy)
- N.J.A.C. 13:45A-17.11, registration display rules (Cornell Legal Information Institute copy)
- NJ Office of the Attorney General, March 6, 2012 release
- NJ Division of Taxation, contractor bulletin S&U-3 and homeowner bulletin S&U-2
Know it in writing
Start with a written estimate
Your estimate names the products, the price and the dates, and the contract carries the cancellation notice New Jersey requires.
