A new home comes with its own rules, paperwork and protections

Builder registration and the New Home Warranty

New Jersey’s New Home Warranty and Builders’ Registration Act (N.J.S.A. 46:3B-1 et seq.), enacted in 1977, requires new home builders to register with the NJ Department of Community Affairs (DCA) and to warrant the homes they sell. A builder cannot pull a permit without registration. You can look up a builder in the DCA’s online listing of New Jersey new home builders.

The warranty coverage periods are set by law. Year one covers most defects in workmanship and materials, including appliances, fixtures and finishes. The first two years cover heating, cooling, plumbing and electrical systems. Ten years cover major structural defects. Some items, such as driveways, fences, pools and landscaping, are excluded.

Filing a warranty claim the right way

According to the DCA, talking to or writing to your builder is not the same as filing a claim. You must notify the builder in writing about defects you want fixed. You must also file a formal claim with your warranty plan administrator before the coverage period ends, or the claim will be denied. The claim process is explained in the booklet you receive at closing. Keep that booklet with your closing papers, and mark the one, two and ten year dates on your calendar.

Contracts, attorney review and planned communities

New Jersey’s three-business-day attorney review clause is required on contracts prepared by real estate licensees for homes with one to four units and vacant one-family lots (N.J.A.C. 11:5-6.2). Many builders use their own contracts. Ask whether attorney review is included, and have a New Jersey real estate attorney read the builder’s contract before you sign.

If the home is in a planned real estate development, such as a condominium or a community with an association, the Planned Real Estate Development Full Disclosure Act applies. The developer must register its offering plan with DCA before offering homes for sale. You must receive a current Public Offering Statement on or before the contract date. The regulations also let you cancel the contract without cause by written notice delivered by midnight of the seventh calendar day after you sign (N.J.A.C. 5:26-6.2).

Certificate of occupancy and property taxes

Under New Jersey’s Uniform Construction Code, a new building may not be used or occupied until the local construction official issues a certificate of occupancy (N.J.A.C. 5:23-2.23). A temporary certificate may be issued when the remaining work does not affect health or safety. The builder must show proof of warranty coverage to the construction official before the certificate of occupancy is issued.

Plan for property taxes too. New Jersey assesses property as of October 1. A home finished later in the year can receive an added assessment, prorated for the rest of the tax year. The state assessors’ handbook says a structure is complete when it is ready for its intended use. If an added assessment was missed, an omitted added assessment can follow. Ask the town’s tax assessor how the home will be assessed, and budget for it.

How Cathy helps with new construction

Cathy Walters has been a licensed New Jersey real estate professional since 2007 and is known for her eye for design. She helps buyers see a property’s potential, which can help when you compare floor plans, options and lots. She can also connect you with professionals from her network, including real estate attorneys, inspectors, contractors and insurance professionals. Let’s look at the bigger picture together, from the builder’s paperwork to the warranty booklet.

Before you sign with a builder: what to check

• Look up the builder in the DCA’s listing of registered New Jersey new home builders.
• Have a New Jersey real estate attorney review the builder’s contract and ask whether attorney review is included.
• If it’s a planned community, get the Public Offering Statement and note your seven-day cancellation deadline.
• Ask which warranty plan covers the home and what is excluded.
• Plan an independent inspection before closing.
• Confirm the certificate of occupancy will be issued before you move in.
• Ask the tax assessor how and when the finished home will be assessed.