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Home Improvement Contracts: An Overview of New Jersey Regulatory Requirements

New Jersey has strict rules when it comes to home improvement contracts in excess of $500, the overriding purpose of which is to protect consumers from unscrupulous contractors.  The New Jersey Administrative Code § 13:45A-16.2(12)(i)-(vi) sets forth the requirements necessary in a home improvement contract.  A violation of these written requirements is a violation of the statute.

N.J.A.C. § 13:45a-16.2(12) states in pertinent part:

All home improvement contracts for a purchase price in excess of $500, and all changes in the terms and conditions thereof shall be in writing.  Home improvement contracts which are required by this subsection to be in writing, and all changes in the terms and conditions thereof, shall be signed by all parties thereto, and shall clearly and accurately set forth in legible form and in understandable language all terms and conditions of the contract, including but not limited to, the following:

    • The legal name and business address of the seller, including the legal name and business address of the sales representative or agent who solicited or negotiated the contract for the seller;
    • A description of the work to be done and the principal products and materials to be used or installed in performance of the contract.  The description shall include where applicable the name, make, size, capacity, model, and model year of principal products or fixtures to be installed, and the type, grade, quality, size or quantity of principal building or construction materials to be used;
    • The total price or other consideration to be paid by the buyer;The dates or time period on or within which the work is to begin and completed by the seller;
    • A description of any mortgage or security interest to be taken in connection with the financing or sale of the home improvement; and
    • A statement of any guaranty or warranty with respect to any products, materials, labor or services made by the seller.


A home improvement contractor who fails to comply with these regulations will be deemed to have committed a regulatory violation.  If the homeowner files a lawsuit against the contractor for failing to comply with the home improvement contract regulations the contractor will face exposure of triple damages under the New Jersey Consumer Fraud Act.

In order to state a claim under the Consumer Fraud Act,  a plaintiff must allege each of three (3) elements: (1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendants’ unlawful conduct and the plaintiff’s ascertainable loss.  N.J. Citizen Action v. Schering Plough Corp., 367 N.J. Super. 8, 12-13 (App. Div. 2003), cert. denied  178 N.J. 249 (2003).

N.J.S.A. 56:8-2 defines an unlawful practice as:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation or the knowing, concealments, suppression or omission of nay material fact with intent that others rely upon such concealment, suppression or omission in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby is declared to be an unlawful practice. . . .


There are three categories of “unlawful practices” found in the New Jersey Consumer Fraud Act; namely, (1) affirmative acts, (2) knowing omissions, and (3) regulation violations.  Cox v. Sears Roebuck & Co., 138 N.J. 2, 17 (2004).

This article is for informational purposes only.  New Jersey Attorneys.

The Problem With Our Judicial System

In this article, I review an unpublished appellate court decision in New Jersey that illustrates the absurdity with the practice of law.   In this case, the parties likely spent more than $15,000 in appellate litigation fees to reverse a trial court’s abuse of discretion for refusing to grant an adjournment of a trial in a medical malpractice case, where the adjournment was necessitated by the unavailability of one of the defendant doctor’s attorneys because he was on trial in another case.

Monetizing Your IP Panel–5th Annual Asian American Economic Empowerment Conference (video recording)

Invited by the CUNY Asian American/Asian Research Institute and the Asian-American Entrepreneurs Network, Julia Cheng, Esq. speaks on this panel discussing the tricks of trade regarding monetizing a business’ intellectual property in various contexts such as company valuation, licensing and other related issues.

Ohio Creditor Protection Legacy Trust

Creditor Protection Trust (also known as an Ohio Legacy Trust)

Prior to 2013, if you created a Trust for your benefit (meaning you could still use the money or property) your creditors could reach the Trust assets. Effective on March 27, 2013, you will now be able to create a Trust, for your benefit, that is protected from creditors. In Ohio, this is known as an Irrevocable Legacy Trust; other states have referred to it as a Self-Settled Trust.

The Trust allows you to insulate a portion of your assets from creditors. This is important for professionals who have a large amount of potential liability (including doctors, dentists, chiropractors, financial advisors, accountants, attorneys, and professional athletes). This type of creditor protection trust could also be useful for individuals who would like to shelter assets from future medical and nursing home expenses; specifically for Medicaid planning.

How much of the Trust can you access?

If you put assets into a Legacy Trust, there are limitations on the use of those assets. For liquid, financial assets you can only use:

(1)    The current income from the Trust assets and

(2)    Up to 5% of the principal (annually)

The Trust assets can be used to pay the income tax attributable to the assets. In addition, the Trust can be used to pay debts, expenses, or taxes of your Estate after your life. At all times, an Ohio Legacy Trust would be managed by a third party (not the person who set it up). But, as the creator of the Trust, you can replace the Trustee at any time (provided you cannot appoint yourself).*

Does a Legacy Trust protect against all creditors?

The purpose of this type of Trust is to reward those who plan; not those who wait. There is a Fraudulent Transfer Statute in Ohio which prevents a person from giving away assets with the specific intent to avoid payment of known creditors. Thus, it is important to plan before the creditor protection is necessary.

If the Legacy Trust is created prior to a marriage, it is possible to limit the assets exposure to a potential property distribution in a divorce. This type of planning should be done along with a prenuptial agreement.

For purposes of public policy, this creditor protection cannot be used to avoid payment of child support or alimony.

For more information on Estate Planning in Cincinnati, Ohio contact Attorney Elliott Stapleton. Elliott is a partner with CMRK Law and provides Estate and Probate services to clients in Cincinnati. Elliott also represents startup companies and established businesses throughout the State of Ohio with LLC formation, Trademark and Copyright registration.

*A Legacy Trust also allows you to make a donation to a charity and retain an interest (which could pay you income for life remainder to the charity) or create a place your primary residence into the Trust and leave the remainder to your children.

Bank’s Acceptance of Late Payments in Commercial Mortgage Default Does Not Modify Mortgage, NJ Appeals Court Rules

In a recent decision that merits the attention of borrowers and lenders in commercial real estate foreclosures, the New Jersey Appellate Division held that a lender’s acceptance of numerous late payments did not constitute a modification to the mortgage or result in curing the borrower’s mortgage default.  Bank of America v. Princeton Park Associates, L.L.C., Docket No. A-0927-11T3 (App Div., November 8, 2012).  Consequently, the Appellate Division affirmed the trial court’s granting of summary judgment in favor of the lender.

The facts of the case are rather straightforward.  Princeton Park Associates involved a commercial real estate loan transaction. The lender’s loan documents contained the standard default and acceleration provisions. Also, the promissory note included the following provisions: (i) no failure by the lender to accelerate the debt pursuant to the default provisions would constitute a waiver of the lender’s rights to insist on strict compliance with the terms of the note or any of the other loan documents; and (ii) the loan documents could be modified only by written agreement. The mortgage that secured the note contained a similar provision requiring modifications to be in writing.

The borrower, Princeton Park Associates, defaulted on the loan on September 10, 2007 by beginning to make payments 60 days past the due date. The reason for the default is immaterial for purposes of this discussion. In any event, the borrower’s practice of tendering late payments and the bank’s acceptance continued for almost a year. From September 2007 through March 31, 2008, Bank of America issued a series of default letters to the borrower declaring the loan in default, demanding payment of the entire balance owed, plus interest and late fees, and that it was not waiving any of its rights under the loan documents to foreclose on the loan. The parties continued discussing possible loan modification solutions, exchanged proposed agreements, and even met face-to-face, but no modification agreement was ever reached.

After August 6, 2008 the borrower ceased making payments on the loan.  Regardless, the borrower and the lender’s servicing agent continued having discussions into 2009. After additional efforts to reach a settlement proved unsuccessful, Bank of America filed a foreclosure complaint on October 16, 2009 based upon the borrower’s default.  The borrower filed a contesting answer denying it was in default  because of the bank’s acceptance of the late payments.

Bank of America moved for summary judgment contending the borrower defaulted on the loan. In response, Princeton Park Associates argued that the terms of the loan had been modified because the bank accepted its late payments, and thus no default occurred. The trial judge rejected the borrower’s defense, relying on the express terms of the loan documents requiring modifications to be in the form of a written agreement.  The trial judge remarked about the borrower’s failure to present any evidence that such a written modification had ever occurred, and concluded that the bank’s acceptance of late payments did not serve to modify the loan because the bank was entitled to these payments and disclaimed any waiver of rights in its default notices.

Following the trial court’s ruling, the lender obtained a final judgment by default. The appeal then ensued, with the borrower arguing that the trial judge erred in granting summary judgment because it was not in default on the loan because of the bank’s acceptance of the late payments. The borrower also presented an argument that the bank lacked standing, but that portion of the appeal is not discussed here.  The Appellate Division affirmed the trial court’s ruling in all respects, though interestingly did not recite any case law to support its conclusion that the bank’s acceptance of late payments did not rise to the level of a loan modification agreement. Instead, the Appellate Division relied on the express terms of the loan documents, to wit:

PPA [Princeton Park Associates] also argues it was not in default because the terms of the loan were modified when Capmark accepted the late payments. However, the Loan Documents each specifically provided that they could not be modified orally and that a written agreement signed by both parties was needed before any modification could occur. In addition, Capmark continually advised PPA that its acceptance of the late payments would not act to waive the Bank’s rights under the Loan Documents to foreclose on the Building.

Opinion * p. 17.

Courts do not rewrite unambiguous contracts to provide a party with a better or different agreement than that bargained for.   See, e.g., Washington Constr. Co., Inc. v. Spinella, 8 N.J. 212, 217 (1951); Bar on the Pier, Inc. v. Bassinder, 358 N.J. Super. 473, 480 (App. Div. 2003), certif. denied, 177 N.J. 222 (2003). While the Appellate Division in the Princeton Park Associates case does not cite this principal of law, it seems clear to me that the concept of enforcing an unambiguous commercial loan agreement as it is written stands behind the Court’s decision.

Contact our NJ foreclosure attorneys for questions about this case or any other aspect of New Jersey foreclosure law and procedure.

What Causes IRS Audits?

It’s estimated that only about 1 percent of taxpayers are audited by the Internal Revenue Service (IRS). If you’re playing by percentages and filing your taxes on time and correctly, chances are you’ll never hear a peep out of them. But for the taxpayers that do, seeing the words “you’re being audited” on a letter from the IRS can be frustrating, annoying and potentially very costly.

Specifically, being audited means that the IRS is checking up on you and your finances to ensure that your taxes were filed correctly. Although it’s not unheard of for the IRS to randomly select taxpayers and businesses to audit, the decision to audit is normally triggered by some sort of statistical outlier on your tax return compared to a pool of similar tax returns that yours is grouped in. The IRS is also more likely to audit the more high-income taxpayers. For instance in 2008, some 5.6 percent of those audited made more than $1 million, whereas fewer than 1 percent of taxpayers making less than $200,000 were audited.

We already told you about why the IRS may order an audit based on the statistical discrepancy reasoning, but here’s a look at more of the specific situations in which the IRS could check up on you and your tax returns:

  • Improper Tax Deductions: When filing your taxes, it’s important to be truthful. And a common area where people either make a mistake or fudge the numbers a tad is in tax deductions. There are even certain deductions that send “red flags” to the IRS, such as deducting business expenses that were not reimbursed.
  • W-2/1099 Discrepancies: Businesses are required to submit W-2 forms and 1099 forms to the IRS for each person they employ. And these forms are always cross-referenced by the IRS with the taxpayer them self. So if the numbers don’t add up between the two forms that were submitted on behalf of the business and by the employee, the computers the IRS uses will catch it. The result could be an audit, either to the business itself or the employee taxpayer.
  • Schedule C: Solo proprietors are required to fill out Schedule C forms, which detail profits or loss from a business. Solo proprietors pay significantly less in taxes than those that are incorporated, so the IRS more carefully examines these forms to make sure you’re paying the correct amount of taxes. Even if you file correctly, the IRS may still want verification.
  • Early Filing: Believe it or not, timeliness may not be in your favor when filing. It’s projected that those who file their taxes closer to the deadline are less likely to be audited compared to those who file early.
  • Entertaining: If you own a business, chances are at one time or another you’re going to be out there entertaining customers. Businesses can claim up to 50 percent of dining and entertainment expenses on their tax returns. However, the IRS doesn’t like to see expensive parties written off and may ask for clarification between what’s an entertainment expense or just a regular business expense.

Bottom line: To avoid being audited, always be truthful on your tax return. You might even consider hiring an expert to help you understand what can and cannot be deducted when filing. If you have IRS tax issues, learn how to stop wage garnishment problems from a reputable tax attorney.

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