NJ Department of Community Affairs

Who Must Register All builders of owner-occupied new homes, including single family, townhouse, duplex (two-family), cooperative, condominium, factory-built, and modular residences are required to register with the New Home Warranty Program. A builder is any individual or organization in the business of constructing new homes, including anyone who constructs a new home for sale, acts as prime contractor to construct a new home for himself/herself or for another person, contracts with a general contractor for construction of a new home, or sells or transfers title to land and then participates in the construction of a new home. It does not include a person who constructs a new home for his/her own personal use, a licensed architect, engineer, or attorney, or someone who contracts with a licensed architect, engineer, or attorney to provide professional services related to the construction of a new home.

Each new home building business is required to register separately. The name of the company which is transferring title to the new home is the entity which must register and warrant the new home.

If approved, a builder is issued a registration card, which must be shown to the local construction official when construction permits for the new home are obtained. Registration is valid for two years from the approval date.

Builders who fail to register or maintain a current registration are subject to fines up to $2,000. Each home sold during the time the builder remains unregistered is considered a separate offense.

A builders registration can be suspended or denied if the builder fails to enroll, warrant, or continue to participate in the State Plan or an approved private plan, fails to correct or settle a claim after responsibility was established through the dispute settlement process, has officers, partners, stockholders, or directors who were involved in unregistered, suspended, or revoked new home building businesses, incurred or was responsible for incurring an award against the New Home Warranty Security Fund and the Fund has not been compensated, or failed to participate in the dispute settlement process. A builders registration can also be revoked for repeating any of the above violations set forth in this paragraph.

During the first year of a new homes warranty, warranty coverage extends to defective systems, workmanship, materials, plumbing, electrical and mechanical systems, appliances, fixtures, and equipment, and major structural defects. From the commencement date of the warranty up to two (2) years from that date, the mechanical, electrical, and plumbing systems and major structural defects are covered. The builder is responsible for warranty coverage during the first two years. During the third through tenth years of coverage, only major structural defects are covered.

If, for at least 10 years, there has been no payment made, and no final determination that a payment must be made, under either the State Plan or an approved private plan, as a result of a claim against the builder or a major structural defect, the contribution percentage shall be 0.17;

If, for at least seven years but less than 10 years, there has been no payment made, and no final determination that a payment must be made, under either the State Plan or an approved private plan, as a result of a claim against the builder or a major structural defect, the contribution percentage shall be 0.213;

If, for at least five years but less than seven years, there has been no payment made, and no final determination that a payment must be made, under either the State Plan or an approved private plan, as a result of a claim against the builder or a major structural defect, the contribution percentage shall be 0.255;

If, for at least two years but less than five years, there has been no payment made, and no final determination that a payment must be made, under either the State Plan or an approved private plan, as a result of a claim against the builder or a major structural defect, the contribution percentage shall be 0.298;

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NJ Department of Community Affairs