Law Office Of Paul DePetris
paul@newjerseylemon.com

New Jersey New Home Warranty Cases

NEW JERSEY NEW HOME WARRANTY CASES
New Jersey New Home Warranty cases involve the law called the “New Jersey New Home Warranty And Builders’ Registration Act”.    The New Jersey New Home Warranty Act had been in existence for decades and it standardizes the responsibilities of New Jersey new home builders and through its New Jersey New Home Warranty program, is supposed to protects New Jersey home buyers by providing a source of payment to correct deficiencies caused by New Jersey new home builders liable for those deficiencies. 


GENERAL INFORMATION ABOUT THE NEW JERSEY NEW HOME WARRANTY ACT
In 1978, the New Jersey Legislature adopted the New Jersey New Home Warranty Act, which establishes a New Jersey New Home Warranty program requiring that newly constructed New Jersey homes conform with certain construction and quality standards and provides New Jersey new home buyers with insurance-backed warranty protection in the event such standards are not met.  In addition to authorizing New Jersey home warranty coverage through private insurance programs, the New Jersey New Home Warranty And Builders’ Registration Act requires that a New Jersey new home warranty security fund be maintained by the New Jersey State Treasurer and administered by the New Jersey Commissioner of Community Affairs on behalf of New Jersey new home buyers.  Moneys payable to the New Jersey new home Warranty Fund are solely for the purpose of paying proven New Jersey new home warranty claims, providing reasonable reserves, including appropriate forms of reinsurance, and covering the costs of New Jersey new home warranty program administration. Accordingly, New Jersey new home warranty program premiums, fees and other charges must be adequate to these purposes.  Since the New Jersey new home warranty premiums, fees and other charges assessed by the New Jersey new home Warranty Fund are solely for the protection of New Jersey new home buyers enrolled in the New Jersey New Home Warranty program and since such charges bear directly on the affordability of the new New Jersey homes, the fees should be set in an actuarially sound manner, including prudent reinsurance, with provision for the distribution of any accumulated surplus to New Jersey new home buyers enrolled in the New Jersey new home Warranty Fund.  The purposes of the New Jersey New Home Warranty and Builders' Registration Act is furthered through the creation of a Board of Trustees to provide independent oversight over the New Jersey new home Warranty Fund on behalf of those whose new New Jersey homes are covered by it.


WHO IS A NEW JERSEY NEW HOME BUILDER SUBJECT TO THE NEW JERSEY NEW HOME WARRANTY ACT?
The New Jersey New Home Warranty Act defines "builder" simply in terms of entities "engaged in the construction of new homes."  That definition does not automatically include anyone "participating in" or "playing a role in" the construction of a New Jersey new home or anyone "working on the premises" of a New Jersey new home under construction. 


REGISTRATION REQUIREMENTS UNDER THE NEW JERSEY NEW HOME WARRANTY ACT
The New Jersey New Home Warranty Act includes a registration requirement.  No builder shall engage in the business of constructing new homes unless he is registered with the Department of Community Affairs.


REMEDIES UNDER THE NEW JERSEY NEW HOME WARRANTY ACT
In New Jersey new home warranty cases, the New Jersey New Home Warranty Act’s principally available remedy is embodied in its warranty program. New Jersey new home builders must either participate in that program and make the New Jersey new home warranty available to New Jersey home buyers or must qualify for the alternate New Jersey new home warranty security program and make that relief available to new home buyers. In either event, the statute provides that New Jersey new home buyer can elect to access the New Jersey New Home Warranty which, by and large, is focused on major systems or structural defects that might be found in a New Jersey new home.


MAKING CLAIMS FOR NEW JERSEY NEW HOME WARRANTY CASES UNDER THE NEW JERSEY NEW HOME WARRANTY FUND
In appropriate circumstances and using the appropriate procedures, a New Jersey new home builder may bring a New Jersey New Home Warranty case against a New Jersey new home builder – an arbitration instead of a lawsuit.  The purpose of the New Jersey New Home Warranty security fund to be maintained by the State Treasurer in a trust account,  is:  (1) to provide moneys sufficient to pay claims by owners against builders participating in the New Jersey New Home Warranty fund for defects in new homes covered by the New Jersey New Home Warranty; and (2) to pay the costs of administering the New Jersey New Home Warranty  program established including the costs of obtaining sufficient reinsurance to prudently protect the New Jersey New Home Warranty fund against unanticipated risks and costs incurred by the board in the discharge of its duties. The New Jersey New Home Warranty Fund is funded by payments from the New Jersey new home builders of new homes, and, in the event the New Jersey New Home builder fails to make repairs within a reasonable time or are not satisfactory to the New Jersey New home buyer, participating home buyers are permitted to make claims against the New Jersey New Home Warranty fund for defects caused by (1) "faulty workmanship and defective materials due to noncompliance with the building standards," (2) "faulty installation of plumbing, electrical, [and] heating and cooling delivery systems," or "major construction defects."  The New Jersey New Home Warranty specifically authorizes and directs the Commissioner of the New Jersey Division of Consumer Affairs to prescribe by rule or regulation procedures for the implementation and processing of claims against the New Jersey New Home Warranty security fund.    In compliance with that statutory mandate, the Commissioner of the New Jersey Division of Consumer Affairs has adopted a series of regulations concerning the implementation and processing of claims against the New Jersey New Home Warranty fund.    In particular, the Commissioner has adopted regulations that govern the claims procedure for New Jersey New Home Warranty cases. Those procedures require a five-step process for implementation when, as here, there has been a default by the New Jersey New Home builder. First, the New Jersey New home buyer may file a request for payment with the New Jersey Division of Consumer Affairs.   If the New Jersey New home buyer takes that step, then the New Jersey Division of Consumer Affairs "shall inspect the home for the purpose of determining if the defect is covered by the New Jersey New Home Warranty.   If the New Jersey Division of Consumer Affairs determines that the defect is covered by the New Jersey New Home Warranty, the New Jersey New home buyer is obliged to submit to the New Jersey Division of Consumer Affairs "two or more bona fide estimates acceptable to the Division for the work intended to be covered."  If the New Jersey New home buyer satisfies that obligation, the New Jersey Division of Consumer Affairs must select "the lower or lowest" of the estimates.   Once the New Jersey Division of Consumer Affairs accepts an estimate, the New Jersey Division of Consumer Affairs "shall certify the amount of the award to the Treasurer, who shall make payment from the New Jersey New Home Warranty fund."  As a final safeguard for the trust funds held by the New Jersey New Home Warranty fund, the regulations make clear that "[p]ayment shall be made only for work authorized in writing by the New Jersey Division of Consumer Affairs and upon completion to the New Jersey Division of Consumer Affairs’ satisfaction." 


NEW JERSEY NEW HOME WARRANTY ELECTION OF REMEDIES
Before bringing a New Jersey new home warranty case, be certain to first consult with a New Jersey attorney because you may be limited in seeking certain relief against a New Jersey new home builder once you bring a New Jersey new home warranty case!   The New Jersey New Home Warranty program does not necessarily replace traditionally available remedies and that even though arbitration is a central feature of the New Jersey New Home Warranty  program, "[t]he owner's right to sue . . . remains intact." In spite of that, the New Jersey New Home Warranty program is the statute's essential method for protecting New Jersey new home buyers and its scope can extend to matters not otherwise included within that remedy.   For example, a New Jersey home buyer accepting warranty remedy extending to contractual obligation normally outside warranty protection is foreclosed from litigating that claim.  Therefore, although resort to the New Jersey New Home Warranty is not an exclusive avenue for relief under the New Jersey New Home Warranty Act, the statute provides that the New Jersey home buyer's decision to avail himself or herself of that avenue for relief is an affirmative election of remedies. As a result, reliance on the New Jersey New Home Warranty will also preclude suit based on a defect within the scope of the New Jersey New Home Warranty that the New Jersey home buyer knew or should have known about.  Even though the Legislature provided new home buyers with the ability to select either the New Jersey New Home Warranty or traditional remedies, the New Home Warranty Act, by making the provision of a warranty its central focus, necessarily limits the meaning of the definition of contractors to whom the statute can apply.  The New Jersey Consumer Fraud Act is applicable to a New Jersey new home builder.   Therefore, if a New Jersey home buyer intends to bring a New Jersey consumer fraud case against a builder, the New Jersey home buyer should avoid bringing a New Jersey new home warranty case without first speaking to a New Jersey attorney. 
Website Builder