Official Site of The State of New Jersey

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.

All builders must submit a registration application, along with a nonrefundable registration fee of $200, to the Program. Corporations, limited partnerships, general partnerships, and joint ventures must submit a copy of their certificate of incorporation, certificate of limited partnership, general partnership agreement, or joint venture agreement, as appropriate. The fee is in the form of a check from the new home building business or from a principal in the new home building business, or, when required by the Program, a certified check.

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.

Registration must be renewed every two years. Renewal requirements are the same as for new registrations. A nonrefundable registration fee of $200 must accompany the renewal application. If a builder has provided warranty coverage to a home which is in the first two (2) years of warranty coverage, the registration must be renewed.

A builder’s registration can be revoked or denied for fraud, misrepresentation in the registration application, or substantially violating the New Jersey Uniform Construction Code.  

A builder’s 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 builder’s registration can also be revoked for repeating any of the above violations set forth in this paragraph.

The liability of a builder under a warranty is limited by law to the purchase price of the home in the first good faith sale or the fair market value of the home on its completion date, if there is no good faith sale.  

During the first year of a new home’s 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.

As required by law, all NJ-approved warranty plans must offer the same warranty coverage. Performance standards that are specified in the New Home Warranty and Builders’ Registration Act regulations apply to all approved plans. Click here for the current list of approved private warranty plans.

The State Warranty Plan is open to all registered builders. Any builder not participating in an approved private warranty plan is automatically enrolled in the State Plan. The rate for each new home enrolled is based upon a builder’s warranty enrollment and dispute settlement records. The contribution percentage to be paid for each new home by a builder not participating in an approved private plan is as follows:

	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;
	If a builder has not previously been registered or has been registered for less than two years and 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 0.319;
	If, within the previous two years, there has been any payment made, or any 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 0.425;
	If, at any time while a builder’s contribution percentage is in an amount determined in accordance with 6 above, by reason of the builder’s having been responsible for a payment having to be made on a claim under either the State Plan or an approved private plan, there is any further payment made, or any final determination that a payment must be made, under either the State Plan or an approved private plan, as a result of another claim against the builder or a major structural defect, or if a petition in bankruptcy filed by or against a builder and the builder has not yet been discharged or is under the supervision of the court, the contribution percentage shall be 0.595.

These rates are not applicable if no new homes were enrolled during the specified time period. If the builder is under contract to a land owner who is to occupy the house, the selling price is calculated at 125 percent multiplied by the contract amount. 

If any principal in the new home building business is involved in any other new home building business with a less favorable rate, the less favorable rate applies to all new home building businesses.

The rate assigned to the new home building business will be used to compute the warranty premiums for each new home enrolled in the State Plan. This rate will be adjusted upon renewal of the builder’s registration, when it will be revised based on the new home building business’ claims record, or at any time the builder defaults on a claim.

The builder or the warranty plan of which the builder is a member is responsible for providing the homeowner with a full statement of warranty coverage and warranty claims procedures, on forms pre approved by the program. This transmittal should take place at closing. No certificate of occupancy is issued unless the builder presents proof to the local construction official that the new home is covered by a warranty. The warranty is effective when the title is first transferred from builder to owner or when possession or occupancy is first given by the builder to the owner.

According to the New Home Warranty regulations, each private plan must provide a complaint, claims, and payment procedure that provides for an attempt at informal settlement between the builder and the homeowner of any claim and requires that any homeowner making a claim provide written notice to the builder.  

The regulations also require conciliation and/or arbitration of any warranty claim dispute by an independent third party. The homeowner has the opportunity to accept or reject a conciliation decision and may appeal the decision in court. The private plan must also provide fixed periods of time for action by the builder or homeowner pursuant to the arbitration/conciliation decision. For detailed information on this process, the private warranty plan should be contacted.

Unless an emergency situation arises or a major structural defect exists, a homeowner must wait 120 days from the commencement date of the warranty before the homeowner can file a claim (Notice of Claim and Demand). The homeowner must notify the builder in writing with a list of defects found in the home. The builder has the choice to repair, replace, or pay for the correction of the defect, if the defect is covered by the warranty. The builder is also responsible for actual reasonable shelter expenses during any repair that has rendered the home uninhabitable.

The builder must inspect and repair the defect(s) covered by the warranty within 30 days of the homeowner’s notice. If the builder does not, the homeowner may file a formal Notice of Claim and Demand with the New Home Warranty Program. The New Home Warranty Program is then responsible for providing a means of claims resolution. 

This process begins with conciliation, in which a skilled, impartial, neutral third party meets with the builder and the homeowner at the new home to attempt to resolve the conflicts. This neutral third party is an independent conciliator/arbitrator. If successful, the conciliator/arbitrator will make an arbitration award, with the permission of both parties. If there is no agreement reached, or if any part of the dispute remains unresolved after the conciliation meeting, the conciliator/arbitrator may then proceed into an arbitration meeting, if the homeowner and builder both agree. As a result of the meeting, the arbitrator will render judgment within a few weeks. This award is legally binding on both parties. The award is limited to a determination of the existence of an eligible defect under the New Home Warranty regulations, whether the builder will repair or replace the defect(s), and the time within which the builder will perform the corrective action. The arbitrator cannot make a monetary award: he can only require repair or replacement, if necessary, except in the case of reimbursement for emergency or temporary repairs. There is no cost to the homeowner or builder for conciliation or arbitration under the State Plan. The arbitration award is not appealable through the program. 

If, after the conciliation process, either the homeowner or builder do not agree to arbitration, the process of a Bureau (of Homeowner Protection, New Home Warranty Program) decision begins. A Program staff member conducts a hearing to review the defects in the home and renders a written decision. The decision is binding on all parties, but can be appealed within 15 days of the decision. An administrative hearing through the New Jersey Office of Administrative Law is then provided. 

If a builder refuses to repair or replace defects as directed in the written arbitration award or the Bureau decision, the State Plan then assumes financial responsibility for correction of the defects in the home. However, the program will take administrative action against the builder, such as revocation or suspension of the builder’s registration. For additional information, contact the Division of Codes and Standards, Bureau of Homeowner Protection, New Home Warranty Program, PO Box 805, Trenton, New Jersey 08625-0805, (609) 984-7905.

A registered builder is also required by law to enroll in a warranty plan. A builder may participate in the State Plan offered by the New Home Warranty Program or one of the private warranty plans approved by the New Home Warranty Program.

Home Builder Registration Application (New/Renewal)

Informational Guide for Builders

State Plan
New Home Warranty Application (Certificate of Participation)

• Certificate of Participation Application
• Certificate of Participation Assignment
• Exclusions
• Submission Date Guideline

New Home Warranty Claim Forms

• Notice of Claim and Demand for Claims in Years 1 and 2
• Notice of Claim and Demand for Major Structural Defects for Claims in Years 3-10

NJAC 5:25 - New Home Warranty and Builders' Registration