The New Jersey Consumer Fraud Act imposes liability for treble damages and attorneys fees for any seller of merchandise engaging in “any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression or omission of any material fact with intent that others reply upon such concealment, suppression or omission”. For example, a home improvement contractor who takes money from a homeowner and does not perform the contracted work, may face severe financial consequences if s/he engages in any fraudulent conduct in connection with the work.
What about real estate sales? The answer is that it depends. It is clear that commercial sellers of real estate and brokers engaged in such transactions are covered by the Act. However, a non-professional, casual seller of real estate is not. For example, homeowners who sell their homes are not professional sellers of real estate and are not liable under the Act. On the other hand, a builder constructing a development would be.
Another example is when a business sells a single parcel where it has been operating its business. The Act would not apply to that kind of isolated transaction.
The New Jersey Supreme Court has held that the Consumer Fraud Act is to be given a “limited construction” in connection with real estate transactions. However, it has not fully defined every class of real estate seller which may be liable under the Act. It is unclear for instance how many sales would need to occur for a particular seller to have liability under the Act.
It is therefore essential that experienced counsel be consulted in order to assess whether the Act should be invoked in a particular situation and how same should be defended. Give us a call today.
