The state of New Jersey requires that all registered new home builders participate either in the state warranty plan or in an approved private plan.
NJ new home buyers are entitled to a 10 year limited warranty against defects in workmanship, materials and systems. The warranty program also protects the consumer by defining a formal complaint resolution process.
The builder must provide the homeowner with a complete statement of warranty coverage and claims procedures at closing.
The state plan has a waiting period of 120 days before the owner can file a claim - this is waived in the event of an emergency situation or a major structural defect.
Under all plans, there is a time period following notice in which the contractor must resolve the problem. If that does not happen, the complaint goes to conciliation and arbitration.
Under the NJ state warranty plan, during conciliation, an impartial third-party negotiator meets with the contractor and the homeowner to attempt to resolve the conflict. If no agreement is reached, the negotiator will proceed to an arbitration meeting, with the permission of both parties.
If the homeowner and/or the contractor refuses to go to arbitration, the matter will be decided by a member of the Bureau of Home Owner Protection (New Home Warranty Program) who will conduct a hearing, review the defect(s) and render a decision which is binding for all parties. The decision can, however, be appealed.
If the builder refuses to correct the defect(s) 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 and will take administrative action against the builder, such as revocation or suspension of the builder’s registration.
Note that some aspects of private home warranty plans may differ from the New Jersey state plan - contact the private warranty plan for more detailed information.