New Jersey's New Home Improvement Contractor Surety Bond Law: What You Need to Know

In January 2024, Governor Murphy signed P.L. 2023, c. 237 into law, amending the Contractors' Business Registration Act and establishing the Home Improvement and Home Elevation Contractor Licensing Act. This legislation introduces mandatory compliance bond requirements for all home improvement and home elevation contractors in New Jersey, effective for registration renewals beginning January 2025.

## Bond Amounts Based on Contract Values

Contractors must obtain a compliance bond in one of three tiers, determined by either single contract value OR total annual contracts in the previous 12 months:

**$10,000 Bond:** For single contracts under $10,000 OR annual contract totals less than $150,000

**$25,000 Bond:** For single contracts $10,000-$120,000 OR annual contract totals $150,000-$750,000

**$50,000 Bond:** For single contracts over $120,000 OR annual contract totals $750,000 or more

## Key Requirements

All Home Improvement Contractor Businesses (HICBs) and Home Elevation Contractor Businesses (HECBs) must maintain a compliance bond to obtain, renew, or reinstate their license. The obligee for these bonds is the New Jersey Division of Consumer Affairs.

## Important Dates

- Law signed: January 8, 2024 - Renewal applications opened: January 2025 - Existing registrations expired: March 31, 2025

## What the Bond Protects

The compliance bond is a three-party agreement between the contractor (principal), NJ Division of Consumer Affairs (obligee), and the bonding company (surety). It protects consumers from contractor violations, incomplete work, or failure to meet contractual obligations.

## Additional Insurance Requirements

In addition to the compliance bond, contractors must maintain General Liability Insurance ($500,000 per occurrence for home improvement work, $1,000,000 for home elevation services) and Workers' Compensation Insurance unless legally exempt.

## Estimated Bond Costs

- $10,000 bond: Starting at $100 annually - $25,000 bond: Starting at $125 annually - $50,000 bond: Starting at $250 annually

Pricing depends on your credit score, business financials, experience, and claims history.

## Exemptions

The following are exempt from bond requirements: individuals performing work on their own property, work for charities or non-profits, and licensed professionals working within their scope of practice.

Ready to get your NJ Home Improvement Contractor Bond? Contact Can Do Surety Bonds at (609) 491-7404 for a free quote and fast approval.