Are residential structures that are not occupied, nor intended to be, protected under the home improvement regulations of the Consumer Fraud Act? This question was addressed in the recent case of Luma Enterprises, L.L.C. v Hunter Homes & Remodeling, L.L.C., Superior Court of New Jersey, Appellate Division, Docket No. A-6094-11T3. (July 1, 2013) [READ CASE HERE]
In that case, plaintiff contracted with defendant to renovate a structure into a daycare facility. Plaintiff agreed to pay the contract price in installments. Both parties agreed that failure to make an installment payment within ten days of its due date would result in a material breach. During renovation, plaintiff made two untimely payments, but defendant continued to work on the project without protest. After receipt of a third late payment, defendant stopped working on the project. Plaintiff filed a complaint and alleged
·         Consumer fraud; and
·         Breach of contract.
The Court dismissed the consumer fraud complaint. It found that the Consumer Fraud Act (“CFA”) did not apply due to the building was not occupied as a residence. Plaintiff appealed.
Plaintiff argued that the property’s residential zoning gave it an inherent residential use and thus was considered a “home improvement” under CFA regulations. The Court, however, held that plaintiff never intended the structure to be used as a home or place of residence – and indeed, no residents were living there – therefore the CFA was not applicable.
This holding meant that the Contractor was not held liable under the Consumer Fraud Act.

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