New Jersey's Contractor Registration Act (N.J.S.A. 56:8-136 et seq.) has been on the books since 2004, but its enforcement — and its implications for General Contractors — are frequently misunderstood. The law is primarily aimed at home improvement contractors, but the liability chain it creates directly affects GCs who hire subcontractors for residential work across the state.
Who Is Required to Register
- General Contractors performing residential renovations or additions
- Subcontractors hired to perform any portion of a home improvement
- Specialty trades working on residential projects (electricians, plumbers, roofers, HVAC)
What Happens When You Hire an Unregistered Sub
Under the Act, a contract for home improvement performed by an unregistered contractor is voidable by the homeowner — meaning the homeowner can walk away from payment obligations entirely. Penalties include fines up to $10,000 for a first violation and up to $20,000 for subsequent violations.
What to Put in Your Subcontracts
Every residential subcontract in New Jersey should include: (1) the sub's registration number, (2) a representation that the sub will maintain registration for the duration of the project, and (3) an indemnification clause covering any losses you suffer if the sub's registration lapses.
