N.J. Plumbers Fight Big-Box Law Loophole

BY ROBERT P. MADER of CONTRACTORs staff TRENTON, N.J. The New Jersey Association of Plumbing-Heating-Cooling Contractors is calling on New Jersey Gov. James McGreevey to veto a section of a recently passed bill that exempts giant home-improvement retailers such as Home Depot, Lowes and Sears and their employees from new legal requirements for home-improvement contractors. The Registration Act requires

BY ROBERT P. MADER of CONTRACTOR’s staff

TRENTON, N.J. — The New Jersey Association of Plumbing-Heating-Cooling Contractors is calling on New Jersey Gov. James McGreevey to veto a section of a recently passed bill that exempts giant home-improvement retailers such as Home Depot, Lowe’s and Sears — and their employees — from new legal requirements for home-improvement contractors.

The “Contractors’ Registration Act” requires all home-improvement contractors in New Jersey to register with the State Division of Consumer Affairs, pay an annual fee, disclose prior criminal histories, maintain a minimum of $500,000 in liability insurance, and adhere to specific state regulations for advertising and consumer contracts. It also empowers the division’s director to revoke the registrations of those who violate the law.

Currently, only plumbing and electrical contractors are licensed by the state. HVAC contractors are not. Numerous municipalities charge annual registration fees for the right to do business in those towns, said Mike Dolan of Jack Dolan & Sons in Summerset and chairman of the PHCC-NJ legislative committee.

The registration bill, as passed by the state House, covered all home-improvement contractors. The version that passed the state Senate, however, contained the big-box store loophole exempting any company with more than $50 million in sales.

The 102-year-old PHCC-NJ supported the legislation until it was amended, according to its past-president, Charles West of Charles West Plumbing & Heating in Wall Township. The original intent of the law was to catch fly-by-nighters who take money and skip town or who change their names every six months to avoid scrutiny. He said those individuals are frequently uninsured and don’t pull permits. West said he believes any person who enters a home to perform work, no matter what it is, needs to be registered.

The plumbing contractors are particularly concerned that the bill not only exempts large home-improvement stores but also their employees.

“New Jersey consumers deserve to know that they are being protected from fraud and shoddy work whether the job is being performed by an individual or a multimillion-dollar enterprise,” West said.

West said that big does not necessarily equal honest.

“A year ago, Home Depot paid the state more than $500,000 to settle an investigation by the Consumer Affairs Division into possible violations of the state’s Consumer Fraud Act, and just a month ago the attorney general announced that Sears, Roebuck was paying more than $625,000 to settle allegations that it defrauded customers in connection with the sale of four-wheel alignment services,” West noted. “Clearly the size of a retail operation alone cannot guarantee its honesty and responsibility.”

According to the Division of Consumer Affairs, Home Depot paid the fine for allegedly violating the state’s consumer fraud laws in its home-improvement practices, advertising policies, deliveries and refunds. Home Depot did not admit wrongdoing.

“Even worse,” West said, “is the fact that any of the thousands of full- or part-time employees of large, home-improvement retailers in New Jersey would be free under this exemption to offer home-improvement services to the public without being subject to any of the law’s safeguards.”

West noted that members of the PHCC-NJ who are licensed master plumbers are exempt from the legislation, as are licensed electricians since both groups already are regulated by the state.

“Our association supports the highest standards of professional conduct for all contractors,” he said. “We urge the governor to eliminate this gaping loophole which is an insult to the concept of consumer protection.”

PHCC-NJ’s current president, Ken Alexander of Alexander Plumbing Heating & Cooling in Princeton, said the law would have required home-improvement contractors to be bonded, insured and to pull local permits. The big-box exemption means the retailers would not have to do that.

Dolan said the registration bill has been brought up for the past 10 years but has never gotten through the legislature until now. He said the association has been told by the governor’s staff that he’s leaning toward signing the bill as is. McGreevey has until the end of the year to sign or reject the bill.

Dolan noted, however, that the New Jersey League of Municipalities has killed the bill for the past 10 years because it fears that statewide registration would eliminate revenue from local registration fees. Dolan said the fees run about $200 per year per town. He pays one town but he noted that contractors in northern New Jersey might pay five or more.

Dolan said the league is complaining to the governor. One tactic it might take, he said, is to suggest that towns might have to raise property taxes if they lose registration fees, something for which no governor wants to be blamed.

Phone calls to Home Depot and Sears by CONTRACTOR were not returned by press time.