April 21, 2020
by Bob Incollingo
For the time being, the State of New Jersey has halted all non-essential construction projects by Executive Order No. 122 as part of its effort to reduce the rate of community spread of coronavirus (COVID-19). The Executive Order speaks for itself, and if you are in the business of construction it merits reading, especially for its definition of “essential construction projects” that effectively shelves all other construction work as non-essential.
While the work of non-essential construction may be postponed for public health considerations, nothing in Executive Order No. 122 holds up its sale. You can continue to sell non-essential construction even while you can’t work on non-essential jobs (that are not subject to an exception). What you need to keep in mind is that because every non-essential project must be placed on hold until the public health emergency passes, you’ll have to negotiate your next contract terms with your customer to allow for a degree of flexibility you probably never needed before.
It makes sense, doesn’t it, when you sell new construction which can only start at some future point when current restrictions have been rescinded, that your contract start date should receive careful attention. In the regulated business of home improvement, New Jersey law requires that the contract state the dates or time period on or within which the work is to begin and be completed by the seller. N.J.A.C. 13:45A-16.2.11.iv. Failure to include that information in the contract in understandable language is automatically a violation of the state’s consumer fraud law
To give you the latitude you need, a good way to go is to have a start date triggered by the last to occur of several conditions. Here is a suggested format for defining the start date in your next home improvement contract:
Start of Construction. Subject to available hours of operation of the Regional Code Enforcement office of the Dept. of Community Affairs (DCA) and the local municipal construction code official, Contractor will apply for necessary construction permits within ten (10) business days of receipt of Owner-paid permit fees, necessary project drawings and specifications, and the deposit stated above. The Work to be performed under this Contract will begin within ten (10) business days after the latest of the following dates: (i) the execution of this Contract by all parties, (ii) when all necessary construction, zoning, and other required permits will have been issued, (iii) the effective date of rescission of pending governmental prohibitions or restrictions on the work, and/or (iv) the date stated here: _________________________.
If you’ve read this far, you’re probably not that guy who imposes a start date of “approximately (whenever)” in his form contract. Given the consumer fraud law, that’s just dumb and asking for trouble. To pass the regulatory test, a start date needs to be able to be figured out with precision, even if only in retrospect. With this last point in mind, don’t leave that last date blank unfilled in the specimen clause above, even if you have to write “N/A” or “Not Applicable” in the space.
So while you have the time, get out there and sell new work for when we all get building again, but do it smart. Describe your start date as depending on conditions you and your customer can clearly follow and both live with. If you need help with this, or with understanding anything in the recent executive orders issuing from the administration, give me a call.
New Jersey construction lawyer Robert J. Incollingo practices construction law, business law, and real estate law in Gloucester County, Burlington County, and Camden County, New Jersey from his office in Cherry Hill. More articles like this appear on RJILAW.com.