How strict is NJ with contractor / rehab process?

Question

Hey BP members!

I'm from NY but I've been looking to invest in NJ. I was wondering how strict NJ is with a contractor / rehab process? Does it depend on which town you buy in?

I have a small team (all family) with a lot of rehab experience but none of us are "licensed" contractors. Will this be a problem without an actual GC license or there a way around it? If so, how do you go about getting a license? Is it just paying a fee and having insurance or do you have to take an actual class and pass a test?

Any advice would be great!

Thanks

Ryan

Rich Zellmer · Answer

If it is a single family you can do all the work yourself, ie GC, plumbing and electric. The premise is that you are doing it as a home-owner. If you start doing multiple properties in the same town that might not fly but you will be fine for the first one. the idea here is the license exception is for homeowners working on their own house.

If the building is a multifamily you need a licensed GC and then you cant do the plumbing and electric.

You dont need to pass a test, you just a certain amount of insurance. I think it is 1 million. If are one man shop in a low risk trade (ie finish carpenter) the insurance is less then $1000. But dont expect them to pay out if you are doing other stuff.

It can a few months to get the license, just cause they are slow.  So dont exspect to buy a house and then just fire up the licnese in 30 day

Jennifer Petrillo · Answer

Yup, it's your house, you can do all your own work, no license needed, as Patrick says above get permits, get inspected, won't be a problem. One more caveat: be careful if you are removing walls, we have seen houses where amateurs removed load bearing walls that led to expensive structural problems. I pay my GC to walk through and do his own "inspection" even when we are doing the work ourselves, because he often notices things that need repair/upgrading that we are not aware of.

Patrick Liska · Answer

Ryan,

As I stated above, you will be ok then, as long as you have the house in your name you can be your own general contractor on the house and do the work you feel comfortable doing. As long as you get the proper permits, build to code and pass inspections.

Jennifer Petrillo · Answer

It does not really matter whether you are licensed/insured...what matters is if the work is done to CODE. You can do any and all work on your own house, but you'd better be sure that, when inspected, the work is code (for your own protection and so nothing fails inspection when you go to sell the property). The GCs and subcontractors we work with know code really well, this is the advantage of using them sometimes. But for the most part, we are capable of doing all our own work, my husband has done plenty of plumbing and electrical over the years so we are even comfortable with doing this. We have a great electrician he can call for advice, who has even done part of the job and let my husband finish it when able. However, a previous electrician would not let my husband work with him on any jobs because he said that was like my husband being a sub for him and working under him without license and insurance, so I understand that point of view as well. There are a few things that you cannot/should not do yourself, such as chimney work, septic work, because these can only be done by licensed specialists, require special permits and inspections (in NJ septic systems are signed off on by the Dept of Health and chimneys are inspected by the Fire Inspector) and you will never be able to sell the property if you can't prove that the work was done by the right contractor. You can also call your local code office and hope that a friendly clerk will tell you if a certain kind of work needs a permit, you'd be surprised at what does not need a permit.

Patrick Liska · Answer

http://www.njconsumeraffairs.gov/hic/Pages/default...

Patrick Liska · Answer

If it's "your house" you can do the work "yourself" or hire contractors. if the house is under a corporation than chances are you may need to be licensed, start "we need money construction", register it with the state and pay the state licensing fee. you will have to get insurance for the company as well. In NJ there is no Contractor test.

Ryan Saulle · Answer

Awesome. Thanks for the help!

Ryan Saulle · Answer

@June Veenstra @Patrick Liska @Jennifer Petrillo Appreciate the response!

To go into more detail. I am looking to purchase a house in my name, do most of the work ourselves and sell it. If i came across major work such as chimneys, septic tanks, etc. I planned on getting licensed specialists so that wouldn't be a problem. I am more so talking about demo, plumbing, electric, windows, doors, painting, floors, tile work, bathrooms, cabinets, kitchens, carpeting, insulation, landscaping. Is it necessary to get a license in NJ to avoid problems or as long as things are done to CODE we should be ok?

Thanks again,

Ryan

June Veenstra · Answer

If you want to work for any properties that use a property manager you will need liability insurance and workmans comp. You must be licensed also there might be people that will hire you otherwise but professional companies won't want the liability of using uninsured or unlicensed contractors.

How strict is NJ with contractor / rehab process?

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