Activist pushing for change
in consumer fraud language
By kathy baratta
Staff Writer
HOWELL — Tracey Kelly is out to "level the playing field between new home buyers and the developers who build their houses."
Kelly, a Howell housewife turned consumer activist, said the way New Jersey’s construction regulatory laws are written, they "stack the deck against the homeowner."
She said pursuing legal redress against a developer is, for consumers, a costly, time-consuming process for which most people don’t have the time or the resources.
Kelly, who is the state’s representative for the national consumer organization Homeowners Against Deficient Dwellings (HADD), said she and her attorney George T. Dougherty, of Lawrenceville, met recently with the director of the state’s Division of Consumer Affairs, Renee Erdos, and assistant attorney general Sharon Joyce, to draw their attention to what they claim is a much-needed change in the way the consumer protection law for home construction is now worded.
At present, anyone convicted of consumer fraud violations of the Uniform Construction Code is liable for triple money damages as well as all attorney’s costs and fees. However, according to Kelly and Dougherty, there are "10 little words that protect builders."
"There are two big forces in the world, one is the people who get elected and the other is the people who get people elected," the attorney said.
According to Dougherty, about 20 years ago the state’s "extremely powerful builders lobby" inserted language into New Jersey’s consumer fraud laws that exempts new construction builders from the same regulations and penalties home remodelers face if they are convicted of consumer fraud violations.
According to Kelly, the phrase, "…this shall not apply to the construction of new homes…" which is part of the state’s building code enforcement language is, "the key phrase that allows these builders to just go on doing whatever they want because they know what it’s going to take to go after them."
"Take out those words and it levels the playing field. The builders know it and that’s why they pay big money to keep things the way they are," the Howell resident said.
Kelly said if the phrase she quoted was removed from the building code enforcement language it would make it easier for a homeowner to compel a builder to repair mistakes or to offer comparable restitution.
Dougherty said the removal of the phrase "would make a real difference in the relief sought." According to the attorney, because of the present language of the law the builder of new home construction cannot be sued for consumer fraud.
Both Dougherty and Kelly note that at present, the only option available to a purchaser of new, faulty construction is to obtain legal counsel and begin litigation; a costly and time-consuming process that Kelly is now all too familiar with.
The Howell resident became involved with HADD over the course of her ongoing litigation with national home builder K. Hovnanian. Kelly purchased a K. Hovnanian home in Howell’s Country Meadows Estates development off Vanderveer Road in 1995.
In 1999, Kelly’s home and seven other Country Meadows Estates homes were found by private professionals and county officials to be so structurally deficient that the homeowners were granted property tax relief. The homes the residents had paid in the area of $300,000 for were reassessed to a value of about $30,000. Dougherty represents Kelly and several other Country Meadows Estates homeowners who are involved in ongoing litigation with K. Hovnanian.
Kelly said she has been trying for years to get state officials to look at the language of the construction code.
According to Dougherty, the proposed change to the consumer fraud language does not require an act by the state Legislature and can be made at the behest of the state Attorney General.
In May 2001, the Howell Township Council adopted a resolution in support of Kelly’s efforts to get the language changed.
The resolution stated, "…the need exists nevertheless to protect home buyers against the potentially ruinous effects of defective home construction through negligent or unscrupulous building practices," and called upon the Division of Consumer Affairs to "…clarify the present text of its home improvement practices regulations to eliminate any doubt as to the direct application of the consumer fraud act to unscrupulous builders of new homes."
Of her meeting with Erdos and Joyce, Kelly said, "I am very pleased that the new consumer affairs director has given HADD the opportunity to bring to the state’s attention the pervasive UCC violations that are going on not only in New Jersey, but throughout the country. I only hope they see the need to level the playing field between the consumer and the developers who violate the consumer fraud act."
A spokeswoman for Erdos said the director had taken Kelly’s recommendations under advisement, but declined further comment when asked if Erdos or Joyce were considering recommending the application of Kelly’s suggested amendment to the consumer law language.
In June 1999, K. Hovnanian was fined $67,500 by the state Department of Community Affairs for violations of the UCC relating to construction violations the state found in Country Meadows Estates. According to DCA spokesman E.J. Miranda, the builder paid $37,500 and made some repairs.