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Slack v. Perimeter Properties, LLC

HNT-L-133-10 (N.J. Super. Law Div. 2011) (Unpublished)

CONTRACTORS; CONSUMER FRAUD ACT — While certain provisions of the Consumer Fraud Act don’t apply to contractors by virtue of certain provisions of the Contractor’s Registration Act, other parts of the Consumer Fraud Act are fully applicable.

The owner of a new condominium unit sued the developer who constructed the condominium development. In the first count of the complaint, the owner alleged damages under New Jersey’s Consumer Fraud Act (CFA), alleging the developer, prior to closing, had made misrepresentations that tanks were below-ground, and that it would move the above ground tanks elsewhere or below-ground. Additionally, the homeowner alleged that the developer misrepresented that the center island in the kitchen was up to code and wired for electricity. According to the owner, these were not the case, something discovered after the owner moved into the condominium unit. The owner claimed damages under the CFA in connection with the sale and advertisement of real estate or in performance of the contract.

The developer filed a partial motion for summary judgment as to the CFA, claiming builders of new homes were not subject to the CFA. It argued that it was covered under New Jersey’s New Home Warranty Act and the Contractor’s Registration Act, a sub-part of the CFA. Specifically, the Registration Act excludes coverage to contractors covered under the New Home Warranty Act. The developer submitted that this exclusion precluded suit under the CFA as a whole.

The lower court held that the exclusionary provision of the Registration Act for new-home builders referred only to that Act’s provisions, and not to CFA claims as a whole. It viewed the protections of the Registration Act, and the New Home Warranty Act as dual and complementary, where the Warranty Act provides protections to new home buyers not covered by the CFA or its amendments. Additionally, the Court held that the Warranty Act was not the exclusive remedy against a new home builder, and a homeowner can avail itself of any other legal remedy against a builder. In this instance, the purchaser opted to bring a claim under the CFA. In sum, the court found that the existence of a potential claim under the Warranty Act did not bar other claims under the CFA if pursued by the homeowner against a new home builder.

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