Katz & Dougherty Law Office
Katz & Dougherty Law Office

Consumer Fraud

Including new home defects and home renovation and grading defects

The term “Consumer Fraud” covers many, many ways that a purchaser can be cheated by a merchant in the sale of goods or services. Whether you were sold a toaster, a new home or a new paint job on an old home, New Jersey’s Consumer Fraud Act has made the difference between licking your wounds and licking your enemy, the unscrupulous vendor. Since 1960, the CFA has leveled the playing field, making it possible for a lone consumer to go toe-to-toe with the largest corporations with the prospect (not a guaranty) of winding up with justice including three-times the amount of your actual money lost on the transaction plus having your attorneys’ fees and court costs paid by the merchant. The CFA also works well for those of us, perhaps the majority of people who don’t have the taste for fighting in court and just want to come out even. It does that by providing a huge potential club (treble damages and attorneys’ fees) to hold over the head of the wrong-doer. That threat is real, not imagined, and leads often to early settlements for those who just want to “come out even” or nearly so. 

Katz & Dougherty has led the way in key aspects of the development of the New Jersey Consumer Fraud Act, primarily in the area of new home construction and in home remodeling. 


Defective Homes

For most of us, a home is the single most expensive purchase we'll ever make in our lives. For that reason, you would think our laws would protect home buyers even more than car buyers or even television buyers. 

Unfortunately, new home builders have been able to lobby successfully against tough statutory regulations. But fortunately the New Jersey courts have been very protective of homeowners’ rights. Katz & Dougherty has been at the forefront of the battle to protect home buyers against unscrupulous builders and sellers of defective homes, large and small.

Our firm acquired State-wide prominence in the field of defective home, consumer fraud litigation as the result of nine years of ground-breaking litigation (1988 to 1997) in a landmark decision of the State’s highest courts. Gennari v. Weichert was brought on behalf of four families who purchased Ahigh end@homes in a development in Lawrence Township, Mercer County, NJ in good faith reliance on the advertised qualities and experience of the builder. We brought the case not solely against the builder, but against Weichert Realtors as a consumer fraud violation because the realtor had published false and misleading brochures and news articles as to the builder=s expertise. Our theory of realtor responsibility under the Consumer Fraud Act was vigorously opposed by several law firms representing the prominent realty firm, owing to the length of time before the case ended. The decision of the trial court was appealed to the Appellate Division and then on to the New Jersey Supreme Court, whose decision, affirming the liability of the builder and the realtor Gennari v. Weichert Realtors , 146 NJ 64 (1997), remains the leading case on this important topic. 

In the aftermath of the Gennari decision, Katz & Dougherty has been called upon to represent homeowners throughout the State and, often on referrals by other attorneys less experienced in this area, continues to fight in court and before our State agencies for homeowners who were short changed.

Our work is not limited to new homes. Many of our cases involve problems with second or third owners of homes, new and old, not because of consumer fraud by the seller, but because of consumer fraud by home remodelers and restorers. New Jersey has one of the strongest consumer protection regulations which are especially designed for the unscrupulous home improvement contractor (which includes virtually any repair or restoration or remodeling work done to a house or its grounds). 

One of the most disappointing areas of this practice occurs when our clients are made aware that the company they hired to do a repair or an addition on their home is bankrupt or without assets to pay any kind of a court award. But what if the business was run by persons who have the money to pay a judgment? 

On June 23, 2010, we won a decision in the Appellate Division holding home improvement contractors (and other business operators) personally and individually responsible to pay consumer fraud damages even when the homeowners signed a contract only with the contractors= business company. Allen v. V & A Bros., Inc., 414 N.J. Super 152 (App. Div., 2010) has set a new standard for individuals who perform defective homebuilding or remodeling, and all other forms of sharp business practices. 


Frequently Asked Questions:

My builder told me he has no further responsibility for my wet basement. He said it was covered under the "new home warranty" he gave me at closing. I believed him ... but when I contacted the warranty company, they told me that I had only a one-year protection for wet basements. My house is two years old. Am I out of luck all together?

ANSWER: NO. These days, every new home comes with a "new home warranty" The new home warranty has several different coverage periods. Water leaking into the basement is listed as a "first year" covered item. BUT, the seller of a new home cannot escape responsibility for delivering a home with a wet basement. Even if the warranty company declines coverage, the builder can be called upon to make good. You don't have to take "no" for an answer. Before taking any formal action, consult a lawyer experienced in this area of the law.



Katz & Dougherty

4020 Quakerbridge Rd

Lawrenceville NJ 08619


Phone: (609) 587-1199

Fax: (609) 587-0550


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