SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C.  20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934


     For the Quarter Ended September 30, 2005     Commission File No. 1-6663
     ----------------------------------------     --------------------------

                            COLONIAL COMMERCIAL CORP.
                            -------------------------
               (Exact Name of Company as Specified in its Charter)

                New York                               11-2037182
                --------                               ----------
   (State or Other Jurisdiction of                 (I.R.S.  Employer
    Incorporation or Organization)               Identification Number)

     275 Wagaraw Road, Hawthorne, New Jersey                  07506
     ---------------------------------------                  -----
     (Address of Principal Executive Offices)              (Zip Code)

     Company's Telephone Number, Including Area Code:  973-427-8224
                                                       ------------

                 120 New South Road, Hicksville, New York 11801
                 ----------------------------------------------
                 (Former Address of Principal Executive Offices)


Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                  Yes      No  X
                                              ---

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)

                                  Yes      No  X
                                              ---

Indicate by check mark whether the Company (1) has filed all reports required to
be  filed  by  Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for  such  shorter  period that the Company was
required  to  file  such  reports)  and  (2)  has  been  subject  to such filing
requirements  for  the  past  90  days.

                                  Yes  X    No
                                      ---

Indicate the number of shares outstanding of the Company's Common Stock and
Convertible Preferred Stock as of November 1, 2005.

          Common Stock, par value $.05 per share - 4,530,687 shares
          Convertible Preferred Stock, par value $.05 per share - 498,493 shares


<PAGE>
<TABLE>
<CAPTION>
                      COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES

                                        INDEX


PART I.                           FINANCIAL INFORMATION                      PAGE NO.
                                                                             --------
<S>            <C>                                                           <C>
     Item 1 -  Financial Statements

               Condensed Consolidated Balance Sheets as of
               September 30, 2005 (Unaudited) and December 31, 2004                 1

               Condensed Consolidated Statements of Operations (Unaudited)
               Quarter Ended September 30, 2005 and 2004                            2

               Condensed Consolidated Statements of Operations (Unaudited)
               Nine Months Ended September 30, 2005 and 2004                        3

               Condensed Consolidated Statements of Cash Flows (Unaudited)
               Nine Months Ended September 30, 2005 and 2004                        4

               Notes to Condensed Consolidated Financial
               Statements (Unaudited)                                               5

    Item 2 -   Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                           13


    Item 3 -   Quantitative and Qualitative Disclosures About Market Risk          20

    Item 4 -   Controls and Procedures                                             20

PART II.       OTHER INFORMATION

    Item 1 -   Legal Proceedings                                                   21

    Item 2 -   Unregistered Sales of Equity Securities and Use of Proceeds         24

    Item 6 -   Exhibits                                                            24
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                      PART I.  FINANCIAL INFORMATION
                                      ------------------------------
Item 1.  Financial Statements

                                COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                                  Condensed Consolidated Balance Sheets

                                                                           September 30,    December 31,
                                                                               2005             2004
                                                                          ---------------  --------------
<S>                                                                       <C>              <C>
                                                                            (Unaudited)
                                    Assets
Current assets:
  Cash and cash equivalents                                               $      465,252   $     310,659
  Accounts receivable, net of allowance for doubtful accounts
    of $229,663 in 2005 and $290,448 in 2004                                   8,140,298       7,774,588
  Inventory                                                                   11,142,206      11,002,314
  Prepaid expenses and other current assets                                    1,159,215         865,732
  Deferred tax asset - current portion                                           637,500         574,061
                                                                          ---------------  --------------
            Total current assets                                              21,544,471      20,527,354
Property and equipment                                                         1,676,297       1,656,149
Goodwill                                                                       1,628,133       1,628,133
Other intangibles                                                                 14,750          27,500
Other assets - noncurrent                                                        142,654         183,183
Deferred tax asset - noncurrent                                                1,071,000         492,939
                                                                          ---------------  --------------
                                                                          $   26,077,305   $  24,515,258
                                                                          ===============  ==============
                      Liabilities and Stockholders' Equity
Current liabilities:
  Trade payables                                                          $    5,598,165   $   4,721,790
  Accrued liabilities                                                          1,908,188       1,744,006
  Income taxes payable                                                             7,298          36,316
  Borrowings under credit facility-revolving credit                           10,744,191      10,658,542
  Borrowings under credit facility-term loan                                     812,977       1,666,667
  Notes payable - current portion; includes related party
    notes of $0 in 2005 and $30,000 in 2004                                      151,156         115,265
                                                                          ---------------  --------------
            Total current liabilities                                         19,221,975      18,942,586
Notes payable, excluding current portion; includes related party
    notes of $881,250 in 2005 and $993,125 in 2004                             1,390,489       1,398,774
                                                                          ---------------  --------------
            Total liabilities                                                 20,612,464      20,341,360
                                                                          ---------------  --------------

Commitments and contingencies

Stockholders' equity:
  Redeemable convertible preferred stock, $.05 par value, 2,468,860
    shares authorized, 525,680 in 2005 and 790,439 in 2004 shares
    issued and outstanding, liquidation preference of $2,628,400 in 2005
    and $3,952,195 in 2004                                                        26,284          39,522
  Common stock, $.05 par value, 20,000,000 shares
    authorized, 4,491,500 in 2005 and 4,158,441 in 2004 shares
    issued and outstanding                                                       224,575         207,922
  Additional paid-in capital                                                  10,694,496      10,746,836
  Accumulated deficit                                                         (5,480,514)     (6,820,382)
                                                                          ---------------  --------------
            Total stockholders' equity                                         5,464,841       4,173,898
                                                                          ---------------  --------------

                                                                          $   26,077,305   $  24,515,258
                                                                          ===============  ==============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                        COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                      Condensed Consolidated Statements of Operations
                                        (Unaudited)


                                                              For The Three Months Ended
                                                                    September 30,
                                                           -------------------------------
                                                                2005             2004
                                                           ---------------  --------------
<S>                                                        <C>              <C>
Sales                                                      $   17,377,655   $  16,185,005
Cost of sales                                                  12,285,200      11,453,648
                                                           ---------------  --------------
    Gross profit                                                5,092,455       4,731,357

Selling, general and administrative expenses, net               4,449,626       4,177,443
                                                           ---------------  --------------
    Operating income                                              642,829         553,914

Other income                                                       63,546          58,280
Interest expense, net; includes related party interest of
  $19,609 in 2005 and $0 in 2004.                                (269,897)       (249,463)
                                                           ---------------  --------------
    Income from operations before income tax benefit              436,478         362,731

Income tax benefit                                               (582,141)       (476,351)
                                                           ---------------  --------------
    Net income                                             $    1,018,619   $     839,082
                                                           ===============  ==============

Income per common share:
  Basic                                                    $         0.24   $        0.22
  Diluted                                                  $         0.19   $        0.17

Weighted average shares outstanding:
  Basic                                                         4,300,270       3,747,715
  Diluted                                                       5,296,133       4,940,318
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                        COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                     Condensed Consolidated Statements of Operations
                                       (Unaudited)


                                                              For The Nine Months Ended
                                                                    September 30,
                                                           ------------------------------
                                                                2005            2004
                                                           --------------  --------------
<S>                                                        <C>             <C>
Sales                                                      $  48,226,815   $  44,859,290
Cost of sales                                                 33,749,170      31,520,092
                                                           --------------  --------------
    Gross profit                                              14,477,645      13,339,198

Selling, general and administrative expenses, net             13,068,688      12,308,681
                                                           --------------  --------------
    Operating income                                           1,408,957       1,030,517

Other income                                                     213,282         240,557
Interest expense, net; includes related party interest of
  $56,000 in 2005 and $0 in 2004.                               (763,788)       (622,515)
                                                           --------------  --------------
    Income from operations before income tax benefit             858,451         648,559

Income tax benefit                                              (481,417)       (554,778)
                                                           --------------  --------------
    Net income                                             $   1,339,868   $   1,203,337
                                                           ==============  ==============

Income per common share:
  Basic                                                    $        0.32   $        0.38
  Diluted                                                  $        0.25   $        0.28

Weighted average shares outstanding:
  Basic                                                        4,217,250       3,164,125
  Diluted                                                      5,290,507       4,368,017
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                         COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                      Condensed Consolidated Statements of Cash Flows
                                        (Unaudited)


                                                               For The Nine Months Ended
                                                                      September 30,
                                                                  2005            2004
                                                             --------------  --------------
<S>                                                          <C>             <C>
Cash flows from operating activities:
  Net income                                                 $   1,339,868   $   1,203,337
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Deferred tax benefit                                        (641,500)       (645,600)
      Stock-based compensation                                     (52,525)         84,900
      Provision for doubtful accounts                               29,343         196,286
      Depreciation                                                 285,211         267,244
      Amortization of intangibles                                   12,750          23,750
      Accretion of debt discount                                    28,125               -
      Changes in operating assets and liabilities:
        Accounts receivable                                       (395,053)     (2,204,510)
        Inventory                                                 (139,892)     (1,285,449)
        Prepaid expenses and other current assets                 (293,483)       (441,337)
        Other assets - noncurrent                                   40,529               -
        Trade payables                                             876,375        (380,668)
        Accrued liabilities                                        164,182           7,262
        Income taxes payable                                       (29,018)       (103,447)
                                                             --------------  --------------
        Net cash provided by (used in) operating activities      1,224,912      (3,278,232)
                                                             --------------  --------------

Cash flows from investing activities:
  Additions to equipment                                          (305,359)       (347,645)
                                                             --------------  --------------
        Net cash used in investing activities                     (305,359)       (347,645)
                                                             --------------  --------------

Cash flows from financing activities:
  Issuance of common stock                                          19,000       1,635,000
  Retirement of preferred stock                                    (15,400)       (355,638)
  Repayments of notes payable                                      (48,919)        (47,645)
  Issuance of notes payable                                         48,400       1,179,017
  Issuance of warrants                                                   -         187,500
  Net (repayments) borrowings under credit facility               (768,041)      1,157,112
                                                             --------------  --------------
        Net cash (used in) provided by financing activities       (764,960)      3,755,346
                                                             --------------  --------------
Increase in cash and cash equivalents                              154,593         129,469
Cash and cash equivalents - beginning of period                    310,659         342,756
                                                             --------------  --------------
Cash and cash equivalents - end of period                    $     465,252   $     472,225
                                                             ==============  ==============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                        4
<PAGE>
                   COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES

              Notes To Condensed Consolidated Financial Statements
                               September 30, 2005
                                   (Unaudited)

1.   Summary of Significant Accounting Policies and Practices
     --------------------------------------------------------

     The condensed consolidated financial statements of Colonial Commercial
Corp. and Subsidiaries (the "Company") included herein have been prepared by the
Company and are unaudited; however, such information reflects all adjustments
(consisting solely of normal recurring adjustments), which are, in the opinion
of management, necessary for a fair presentation of the financial position,
results of operations, and cash flows for the interim periods to which the
report relates.  The results of operations for the period ended September 30,
2005 are not necessarily indicative of the operating results that may be
achieved for the full year.

     Certain information and footnote disclosures, normally included in
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, have been
condensed or omitted.  It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Form 10-K for the year ended December
31, 2004.

     We have one continuing industry segment - wholesale distribution of
heating, ventilation, air conditioning equipment and plumbing fixtures.

     Inventory is comprised of finished goods.

     Stock Options
     -------------

     The Company uses the intrinsic-value method of accounting for stock-based
awards granted to employees.  The Company recognizes stock-based compensation
related to option repricing for options previously awarded.  For the quarter and
nine months ended September 30, 2005, the amount of stock based compensation was
($26,785) and ($52,525), respectively.  During the nine months ended September
30, 2005, no stock options were granted and all outstanding options were fully
vested.   In accordance with SFAS No. 148, "Accounting for Stock Based
Compensation - Transition and Disclosure," the following table presents the
effect on net income and net income per share, had compensation cost for the
Company's stock plans been determined consistent with SFAS No. 123, "Accounting
for Stock-Based Compensation".  The fair value of each option grant is estimated
on the date of grant by use of the Black-Scholes option-pricing model.


                                        5
<PAGE>
     The following table illustrates the effect on net income if the
fair-value-based method had been applied to all outstanding awards in each
period.

<TABLE>
<CAPTION>
                                          For the Quarter Ended      For the Nine Months Ended
                                              September 30,                September 30,
                                           2005          2004           2005           2004
                                       ------------  ------------  --------------  -------------
<S>                                    <C>           <C>           <C>             <C>
Net income, as reported                $ 1,018,619   $    839,082  $   1,339,868   $   1,203,337

Add:    Stock-based compensation
        related to option repricing        (26,785)        33,960        (52,525)         84,900
                                       ------------  ------------  --------------  -------------

Pro forma net income                   $   991,834   $    873,042  $   1,287,343   $   1,288,237
                                       ============  ============  ==============  =============

Basic income per share, as reported           0.24           0.22           0.32            0.38
                                       ============  ============  ==============  =============
Basic income per share, pro forma             0.23           0.23           0.31            0.41
                                       ============  ============  ==============  =============

Diluted income per share, as reported         0.19           0.17           0.25            0.28
                                       ============  ============  ==============  =============
Diluted income per share, pro forma           0.19           0.18           0.24            0.29
                                       ============  ============  ==============  =============
</TABLE>


2.   Equity Transactions
     -------------------

     During the quarter ended March 31, 2005, the Company issued 14,000 shares
of common stock pursuant to the exercise of outstanding stock options.  Bernard
Korn obtained 10,000 shares of common stock, by exercising outstanding stock
options on February 2, 2005.  Mr. Korn is the Chief Executive Officer and a
Director of the Company.  A non-executive employee of Universal obtained 4,000
shares of common stock, by exercising his outstanding stock options on March 22,
2005.

     During the quarter ended September 30, 2005, the Company issued 62,000
shares of common stock pursuant to the exercise of outstanding stock options.
Bernard Korn obtained 25,000 shares of common stock, by exercising outstanding
stock options on September 20, 2005.  Mr. Korn is the Chief Executive Officer
and a Director of the Company.  William Pagano obtained 20,000 shares of common
stock, by exercising outstanding stock options on September 20, 2005.  Mr.
Pagano is the President and a Director of the Company.  Carl Sussman obtained
12,000 shares of common stock, by exercising outstanding stock options on
September 26, 2005.  Mr. Sussman is a Director of the Company.   William Salek
obtained 5,000 shares of common stock, by exercising outstanding stock options
on September 28, 2005.  Mr. Salek is the Chief Financial Officer of the Company.

     During the quarter ended September 30, 2005, holders of a total of 238,131
shares of redeemable Convertible Preferred Stock converted these shares into
238,131 shares of Common Stock, of which 174,378 shares of Convertible Preferred
Stock were converted by Directors of the Company.

     During the nine months ended September 30, 2005 and 2004, the Company
converted 257,059 shares and 56,051 shares, respectively, of Convertible
Preferred Stock to a similar number of Common Stock.


                                        6
<PAGE>
     On August 16, 2005, the Company announced that it was offering to purchase
all shares of Convertible Preferred Stock that on August 15, 2005 were owned by
shareholders who then owned 99 shares or less for $2.00 per share.  The offer
expired September 30, 2005.  As a result of the offer, the Company purchased
7,700 shares of its Convertible Preferred Stock, which were retired.

3.   Supplemental Cash Flow Information
     ----------------------------------

     The following is supplemental information relating to the consolidated
statements of cash flows:

<TABLE>
<CAPTION>
                                                For the Nine Months Ended
                                        September 30, 2005  September 30, 2004
                                        ------------------  ------------------
<S>                                     <C>                 <C>
      Cash paid during the period for:

        Interest                        $          704,032  $          600,514

        Income taxes                    $          253,046  $          136,655
</TABLE>

4.   Net Income Per Common Share
     ---------------------------

     Basic net income per share is computed by dividing income available to
common shareholders by the weighted-average number of common shares outstanding.
Diluted earnings per share reflect, in periods in which they have a dilutive
effect, the impact of common shares issuable upon exercise of stock options.

     A reconciliation between the numerators and denominators of the basic and
diluted income per common share is as follows:

<TABLE>
<CAPTION>
                                              For the Quarter Ended     For the Nine Months Ended
                                                  September 30,               September 30,
                                                2005         2004          2005           2004
                                            ------------  -----------  -------------  -------------
<S>                                         <C>           <C>          <C>            <C>
Net income (numerator)                      $  1,018,619  $   839,082  $   1,339,868  $   1,203,337
                                            ============  ===========  =============  =============

Weighted average common shares
(denominator for basic income per share)       4,300,270    3,747,715      4,217,250      3,164,125

Effect of dilutive securities:
Convertible preferred stock                      668,193      839,230        745,333        956,169
Convertible notes                                175,000      116,726        175,000         38,908
Stock options                                    152,670      236,647        152,924        208,815
                                            ------------  -----------  -------------  -------------

Weighted average common and potential
Common shares outstanding
(denominator for diluted income per share)     5,296,133    4,940,318      5,290,507      4,368,017
                                            ------------  -----------  -------------  -------------

Basic net income per share                  $       0.24  $      0.22  $        0.32  $        0.38
                                            ============  ===========  =============  =============

Diluted net income per share                $       0.19  $      0.17  $        0.25  $        0.28
                                            ============  ===========  =============  =============
</TABLE>


                                        7
<PAGE>
5.   Financing Arrangements
     ----------------------

     At September 30, 2005, amounts outstanding under the credit facility were
$11,557,168, of which $812,977 represents a term loan payable in equal monthly
installments of approximately $83,333.  At September 30, 2005, the amount of the
unused available credit was $1,438,246.  The interest rate on the $812,977 term
loan was 7.25% (prime plus .5%) as of September 30, 2005.  The interest rate on
the remaining credit facility, as of September 30, 2005 was 6.5% (prime minus
..25%).

6.   Litigation
     ----------

Universal Supply Group, Inc.
----------------------------

                                   Litigation
                                   ----------

     Universal Supply Group, Inc. is a New York corporation ("Universal").  On
June 25, 1999, Universal acquired substantially all of the assets of Universal
Supply Group, Inc., a New Jersey corporation, including its name, pursuant to
the terms of a purchase agreement.  The Company filed a copy of the purchase
agreement with the Securities and Exchange Commission on March 30, 1999 as
Exhibit 10(g) on Form 10KSB, and the Company filed a copy of an amendment to the
purchase agreement on July 9, 1999 as Exhibit 10(a)(ii) on Form 8-K.  Subsequent
to the sale, Universal Supply Group, Inc. (the selling corporation) formerly
known as Universal Engineering Co., Inc., changed its name to Hilco, Inc.
Hilco, Inc. acquired the assets of Amber Supply Co., Inc., formerly known as
Amber Oil Burner Supply Co., Inc., in 1998, prior to Hilco's sale of assets to
Universal.  Hilco, Inc. is hereinafter referred to as the "Predecessor."  The
majority shareholders of Hilco, Inc. were John A. Hildebrandt and Paul
Hildebrandt.

     The Company understands that Predecessor and many other companies have been
sued in the Superior Court of New Jersey (Middlesex County) by plaintiffs filing
lawsuits alleging injury due to asbestos. Currently, there exist 126 plaintiffs
in these lawsuits relating to alleged sales of asbestos products, or products
containing asbestos, by the Predecessor. The Company never sold any asbestos
related products.

     Of the existing plaintiffs, 13 filed actions in 2005, 38 filed actions in
2004, 31 filed actions in 2003, and 44 filed actions in 2002. Forty-nine other
plaintiffs have had their actions dismissed and seven other plaintiffs have
settled as of September 2005 for a total of $3,306,000. There has been no
judgment against the Predecessor. Our Universal subsidiary was named by
seventeen of the existing plaintiffs; of these, six filed actions in 2001, one
filed an action in 2003 and ten filed actions in 2005. No case that names our
Universal subsidiary has been settled or dismissed.

     As set forth in more detail below, the Company has been indemnified against
asbestos-based claims, and insurance companies are defending the interests of
the Predecessor and the Company in these cases.


                                        8
<PAGE>
     Based on advice of counsel appointed by the insurance companies, the
Company believes that none of the litigation that was brought against the
Company's Universal subsidiary through September 30, 2005 is material, and that
the only material litigation that was brought against Predecessor through that
date was Rhodes v. A.O. Smith Corporation, filed on April 26, 2004 in the
         --------------------------------
Superior Court of New Jersey, Law Division, Middlesex County, Docket Number
MID-L-2979-04AS. The Company was informally advised that the Rhodes case was
                                                             ------
settled for $3,250,000 under an agreement reached in connection with a
$10,000,000 jury verdict that was rendered on August 5, 2005. The Company was
not a defendant in the Rhodes case, and is in any event entitled to the
                       ------
indemnification and insurance coverage referred to below.

     The Company believes that Rhodes differed from the other lawsuits in that
                               ------
plaintiff established that he contracted mesothelioma as a result of his
occupational exposure to asbestos dust and fibers and that a predecessor of the
Company was a major supplier of the asbestos containing products that allegedly
caused his disease.

                                 Indemnification
                                 ---------------

     John A. Hildebrandt, Paul Hildebrandt and the Predecessor have jointly and
severally agreed to indemnify our Universal subsidiary from and against any and
all damages, liabilities and claims due to exposure to asbestos at any time
prior to the June 25, 1999 closing of the purchase agreement referred to
earlier.  These agreements are set forth in the purchase agreement. Paul
Hildebrandt, one of the indemnitors, was a director of the Company from
September 29, 2004 to January 28, 2005.

     The indemnitors may use their own counsel to defend these claims. The
indemnitors are not liable for any settlement effected without their consent.
The indemnitors may settle and pay money claims without the consent of the
Company. There is no indemnification unless claims aggregate $50,000; once this
trigger point is reached, indemnification is required for all claims, including
the first $50,000, but excluding claims of less than $10,000. The
indemnification requirement survives at least until 30 days after the running of
any relevant statutes of limitation.

     The obligation of the indemnitors is joint and several, so that the Company
can have recourse against any one or more of these indemnitors, whether or not
any other indemnitor has previously defaulted on its obligation to us.

     There are no other limitations to our rights to indemnification.

                                    Insurance
                                    ---------

     The assets that the Predecessor sold to us included its insurance policies
and other agreements and contracts. The policies provide coverage for liability
accruing during the periods for which premiums were paid.  The Predecessor was
formed in 1940. Copies of policies are available for each year beginning in 1970
and ending with the closing under the purchase agreement in 1999. Copies of
policies for the period from 1940 to 1969 are not available.


                                        9
<PAGE>
     Insurance companies acknowledge coverage for potential asbestos claims
under certain of these policies.  Insurance companies under additional policies
have reserved their right to deny coverage but have continued to defend and
indemnify the Predecessor and the Company under the contested policies.

     There are periods during the years from 1940 to 1999 in which our
Predecessor did not have coverage for potential asbestos claims.  Subject to
litigation, insurance companies may maintain that the existence of these
periods' results in coverage for only a portion of a particular injury that
varies with the period during which there was asbestos coverage relating to the
injury, and that the balance of any settlement or judgment is to be paid by the
insured.  To date, no insurance company has claimed any contribution for a gap
in coverage except for a claim for $159.64 made by one insurance company to the
Predecessor in 1995.  The Predecessor asserted that it had no obligation to pay
this amount and did not make any payment.

     Insurance companies have to date defended our Company and the Predecessor,
and have paid all settlement amounts and defense costs, except that the Company
understands that the insurance companies have not yet made payment for amounts
owed by the Predecessor under its August 2005 agreement to settle the Rhodes
                                                                      ------
case. Except for $159.64 referred to above, the insurance companies have not
requested any payments from us or from the Predecessor.

     Our Universal subsidiary has not engaged in the sale of asbestos products
since its formation in 1997. Its product liability policies for all years since
1998 exclude asbestos claims.

                                     General
                                     -------

     Regardless of indemnification and insurance coverage, we do not in any
event consider our Company to be liable for the asbestos-based lawsuits that
name us or for any other claim that arises as a result of actions or omissions
by Predecessor companies. We expressly disclaimed the assumption of any
liabilities when we purchased the assets of the Predecessor.

     It is management's opinion that the existing asbestos litigation will not
have a material adverse effect on the Company.  Nevertheless, the Company could
be materially and adversely affected if the Company is held liable for
substantial asbestos claims or if the Company incurs substantial legal or
settlement costs. This material and adverse effect would occur if indemnitors
fail to honor their indemnification agreements and insurance is not available
either because policy limits are exceeded, or because insurance companies
successfully claim limitations on their liabilities by reason of gaps in
coverage or otherwise.

     There is no accrued balance for any period relating to asbestos claims, and
no amount has been recorded for any period in any financial statement by the
Company for asbestos claims.  The Company does not regard as likely the
potential payment of any asbestos-based claim.


                                       10
<PAGE>
Atlantic Hardware & Supply Corporation
--------------------------------------

     On January 28, 2002, Atlantic Hardware & Supply Corporation ("Atlantic"), a
wholly-owned subsidiary of the Company, filed a voluntary petition with the U.
S. Bankruptcy Court for the Eastern District of New York to reorganize under
Chapter 11 of the U. S. Bankruptcy Code. On May 18, 2005, the United States
Bankruptcy Court for the Eastern District of New York dismissed the petition.
Atlantic is a discontinued operation and has no assets.  Neither Colonial
Commercial Corp. nor any of its other subsidiaries were part of the Chapter 11
filing.

7.   New Accounting Pronouncements
     -----------------------------

     In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment",
which establishes standards for transactions in which an entity exchanges its
equity instruments for goods or services. This standard requires an entity to
measure the cost of employee services received in exchange for an award of
equity instruments based on the grant date fair value of the award. This
eliminates the exception to account for such awards using the intrinsic method
previously allowable under APB Opinion No. 25. SFAS No. 123 (R) will be
effective for the first period after December 31, 2005.  The Company is in the
process of evaluating the impact to its financial statements and believes the
adoption will not have a material effect on our income statement.

     In May 2005, the FASB issued Statement No. 154, "Accounting Changes and
Error Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3"
("SFAS No. 154"). This Statement replaces APB Opinion No. 20, "Accounting
Changes," and SFAS No. 3, "Reporting Accounting Changes in Interim Financial
Statements," and changes the requirements for the accounting for and reporting
of a change in accounting principle. This Statement applies to all voluntary
changes in accounting principles. It also applies to changes required by an
accounting pronouncement in the unusual instance that the pronouncement does not
include specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions will continue to be followed. SFAS No.
154 is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. Earlier application is permitted for
accounting changes and corrections of errors made occurring in fiscal years
beginning after June 1, 2005. We do not expect the adoption of SFAS No. 154 to
have a material impact on our consolidated financial statements.

8.   Deferred Income Tax Asset
     -------------------------

     The Company's deferred income tax asset represents certain future tax
benefits related to the expected utilization of net operating loss
carryforwards. The Company records a valuation allowance against any portion of
the deferred income tax asset when it believes, based on the weight of available
evidence, it is more likely than not that some portion of the deferred tax asset
will not be realized. During the quarter ended September 30, 2005, management
determined that a change to its valuation allowance related to the realizability
of the deferred tax asset was necessary.


                                       11
<PAGE>
     As of December 31, 2004, gross deferred tax assets in the amount of
$14,605,589 were reduced by a valuation allowance in the amount of $13,538,589.
Such valuation allowance includes a reduction of $645,600 during the year ending
December 31, 2004, to reflect management's then assessment of the likelihood of
utilizing net operating losses in the future, based upon improved results of
operations during 2004 and upon projections of future taxable income.

     At September 30, 2005, gross deferred tax assets in the amount of
$13,912,066 have been reduced by a valuation allowance in the amount of
$12,203,566. Such valuation allowance includes a reduction of $641,500 during
the three months ended September 30, 2005 based upon its adjustment of its
future income and taxable income projections and, accordingly, its reassessment
of the likelihood of utilizing net operating loss carryforwards in the future.

     During the three and nine months periods ended September 30, 2005, income
tax benefits and net income increased in the amount of $641,500 due to the
revised projection of the future utilization of net operating loss
carryforwards.

9.   Subsequent Events
     -----------------

     On October 19, 2005, William Koon obtained 12,000 shares of common stock,
by exercising outstanding stock options.  Mr. Koon is a Director of the Company.

     On October 26, 2005, holders of a total of 27,100 shares of redeemable
Convertible Preferred Stock converted these shares into 27,100 shares of Common
Stock.

     On October 27, 2005, the Company appointed William Pagano as its President.
Mr. Pagano has been the President of Universal, a wholly-owned subsidiary of the
Company, since November, 1998 and was appointed as a Director of the Company in
February 2002 and will continue as such.

     On October 28, 2005, holders of a total of 87 shares of redeemable
Convertible Preferred Stock converted these shares into 87 shares of Common
Stock.


                                       12
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

The Company
-----------

     Colonial Commercial Corp. ("Colonial") is a New York corporation, which was
incorporated on October 28, 1964. Unless otherwise indicated, the term "Company"
refers to Colonial Commercial Corp. and its consolidated subsidiaries. The
Company's operations are conducted through its wholly-owned subsidiaries,
Universal Supply Group, Inc. ("Universal"), The RAL Supply Group, Inc. ("RAL")
and American/Universal Supply, Inc. ("American").

Forward-Looking Statements
--------------------------

     This report on Form 10-Q contains forward-looking statements relating to
such matters as anticipated financial performance and business prospects.  When
used in this report, the words, "anticipates," "expects," "believes," "may,"
"intends," and similar expressions are intended to be among the statements that
identify forward-looking statements.   From time to time, the Company may also
publish forward-looking statements.  The Private Securities Litigation Reform
Act of 1995 provides a safe harbor for forward-looking statements.
Forward-looking statements involve risks and uncertainties, including, but not
limited to, the consummation of certain events referred to in this report,
technological changes, competitive factors, maintaining customer and vendor
relationships, inventory obsolescence and availability, and other risks detailed
in the Company's periodic filings with the Securities and Exchange Commission,
which could cause the Company's actual results and experience to differ
materially from the anticipated results or other expectations expressed in the
Company's forward-looking statements.

Critical Accounting Policies
----------------------------

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires that we make
estimates and judgments that affect the amounts reported of assets, liabilities,
revenues and expenses, and the related disclosure of contingent assets and
liabilities.  We base our estimates on historical experience and on various
other assumptions we believe to be applicable and reasonable under the current
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  Actual results may differ from these estimates under different
assumptions or conditions.

     In addition, we are periodically faced with uncertainties, the outcomes of
which are not within our control and will not be known for prolonged periods of
time.

     We believe the following to be critical accounting policies that affect the
most significant estimates and judgments used in the preparation of our
consolidated financial statements:


                                       13
<PAGE>
Principles of Consolidation
---------------------------

     The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Accounts Receivable
-------------------

     Accounts receivable consist of trade receivables recorded at original
invoice amount, less an estimated allowance for uncollectible accounts. Trade
credit is generally extended on a short-term basis; thus trade receivables
generally do not bear interest. However, a service charge may be applied to
receivables that are past due. These service charges are not recognized until
collected, and are then included in other income.  Trade receivables are
periodically evaluated for collectibility based on past credit history with
customers and their current financial condition. Changes in the estimated
collectibility of trade receivables are recorded in the results of operations
for the period in which the estimate is revised. Trade receivables that are
deemed uncollectible are offset against the allowance for uncollectible
accounts. The Company generally does not require collateral for trade
receivables.

Inventory
---------

     Inventory is stated at the lower of cost or market and consists solely of
finished goods. Cost is determined using the first-in, first-out method.

     Distribution costs of incoming freight, purchasing, receiving, inspection,
warehousing and handling costs are included in selling, general and
administrative expenses.  Such costs were $102,592 and $85,562 for the quarter
ended September 30, 2005 and 2004, respectively, and $291,590 and $230,890 for
the nine months ended September 30, 2005 and 2004, respectively.

Property and Equipment
----------------------

     Property and equipment are stated at cost.  Depreciation is calculated on
the straight line method over the estimated useful lives of the assets as
follows:

          Computer hardware and software                     3-5 years
          Furniture and fixtures                               5 years
          Automobiles                                        3-5 years

     Leasehold improvements are amortized over the shorter of the lease term or
the estimated useful life of the asset.


                                       14
<PAGE>
Deferred Income Tax Asset
-------------------------

     The Company's deferred income tax asset represents certain future tax
benefits related to the expected utilization of net operating loss
carryforwards. The Company records a valuation allowance against any portion of
the deferred income tax asset when it believes, based on the weight of available
evidence, it is more likely than not that some portion of the deferred tax asset
will not be realized. During the quarter ended September 30, 2005, management
determined that a change to its valuation allowance related to the realizability
of the deferred tax asset was necessary.

     As of December 31, 2004, gross deferred tax assets in the amount of
$14,605,589 were reduced by a valuation allowance in the amount of $13,538,589.
Such valuation allowance includes a reduction of $645,600 during the year ending
December 31, 2004, to reflect management's then assessment of the likelihood of
utilizing net operating losses in the future, based upon improved results of
operations during 2004 and upon projections of future taxable income.

     At September 30, 2005, gross deferred tax assets in the amount of
$13,912,066 have been reduced by a valuation allowance in the amount of
$12,203,566.  Such valuation allowance includes a reduction of $641,500 during
the three months ended September 30, 2005 based upon its adjustment of its
future income and taxable income projections and, accordingly, its reassessment
of the likelihood of utilizing net operating loss carryforwards in the future.

     During the three and nine months periods ended September 30, 2005, income
tax benefits and net income increased in the amount of $641,500 due to the
revised projection of the future utilization of net operating loss
carryforwards.


Goodwill and Other Intangible Assets
------------------------------------

     Statement of Financial Accounting Standards (SFAS) 142, "Goodwill and Other
Intangible Assets," requires that goodwill having indefinite lives not be
amortized, but instead be tested for impairment at least annually. Intangible
assets determined to have finite lives are amortized over their remaining useful
lives.


                                       15
<PAGE>
Results of Operations For the Quarter Ended September 30, 2005 and 2004
-----------------------------------------------------------------------

     The Company's net income increased 21.4% to $1,018,619 for the quarter
ended September 30, 2005, compared to net income of $839,082 for the same period
in 2004.

     Sales increased 7.4% to $17,377,655 for the quarter ended September 30,
2005 from $16,185,005 for the same period in 2004.  The increase in sales is
primarily a result of increased market penetration at two of the Company's
subsidiaries, an increase in general industry pricing, and a continuing strong
demand for residential and light commercial HVAC and plumbing fixtures.

     Gross profit increased 7.6% to $5,092,455 for the quarter ended September
30, 2005 from $4,731,357 for the same period in 2004.  The increase in gross
profit is primarily the result of the aforementioned increases in sales.  Gross
profit expressed as a percentage of sales increased to 29.3% in 2005 compared to
29.2 % for the comparable period in 2004.  Cost of sales excludes the
distribution costs of incoming freight, purchasing, receiving, inspection,
warehousing and handling costs, as these costs are included in our selling,
general and administrative expenses.  Our gross margins may not be comparable to
those of other entities since some entities include these distribution costs in
the cost of sales.  These distribution costs were $102,592 and $85,562 for the
quarters ended September 30, 2005 and 2004, respectively.

     Selling, general and administrative expenses and cost of operations
increased 6.5% to $4,449,626 for the quarter ended September 30, 2005 from
$4,177,443 for the same period in 2004.  This increase is primarily a result of
costs associated with the increased sales growth, increased utility and fuel
costs, general cost increases, increased accounting fees, and an increase of
certain variable expense items based on sales, such as salaries, commissions,
marketing expenses and vehicle costs.

     Other income increased by $5,266 to $63,546 for the quarter ended September
30, 2005 from $58,280 for the same period in 2004.  This increase is primarily
the result of an increase in service charges collected in the third quarter of
2005.

     Interest expense net increased 8.2% to $269,897 for the quarter ended
September 30, 2005 from $249,463 for the same period in 2004.  This increase is
primarily the result of the increase in prime rate which was 6.75% at September
30, 2005 compared to 4.75% at September 30, 2004.

     Income tax expense decreased by $105,790 to a net tax benefit of $582,141
for the quarter ended September 30, 2005 from a $476,351 net tax benefit for the
same period in 2004.  In accordance with FASB Statement Number 109, the Company
recorded a net federal tax benefit of $622,375 for the quarter ended September
30, 2005 in order to recognize the expected utilization of available operating
loss carryforwards, compared to $516,000 in the quarter ended September 30,
2004.  In addition, the Company recorded a state tax provision of $40,234 for
the quarter ended September 30, 2005 compared to $39,649 for the quarter ended
September 30, 2004.


                                       16
<PAGE>
Results of Operations For the Nine Months Ended September 30, 2005 and 2004
---------------------------------------------------------------------------

     The Company's net income increased 11.3% to $1,339,868 for the nine months
ended September 30, 2005, compared to net income of $1,203,337 for the same
period in 2004.  Pre-tax income increased $209,892 or 32.4%, to $858,451 for the
nine months ended September 30, 2005 from $648,559 for the same period in 2004.

     Sales increased 7.5% to $48,226,815 for the nine months ended September 30,
2005 from $44,859,290 for the same period in 2004.  The increase in sales is
primarily a result of increased market penetration at two of the Company's
subsidiaries, an increase in general industry pricing, and a continuing strong
demand for residential and light commercial HVAC and plumbing fixtures.

     Gross profit increased 8.5% to $14,477,645 for the nine months ended
September 30, 2005 from $13,339,198 for the same period in 2004.  The increase
in gross profit is primarily the result of the aforementioned increases in
sales.  Gross profit expressed as a percentage of sales increased to 30.0% in
2005 compared to 29.7% for the comparable period in 2004.  This increase is
primarily a result of increased activity and sales of control systems as well as
plumbing fixtures partially offset by lower margins in sales of air conditioning
equipment.  Cost of sales excludes the distribution costs of incoming freight,
purchasing, receiving, inspection, warehousing and handling costs, as these
costs are included in our selling, general and administrative expenses.  Our
gross margins may not be comparable to those of other entities since some
entities include these distribution costs in the cost of sales.  These
distribution costs were $291,590 and $230,890 for the nine months ended
September 30, 2005 and 2004, respectively.

     Selling, general and administrative expenses and cost of operations
increased 6.2% to $13,068,688 for the nine months ended September 30, 2005 from
$12,308,681 for the same period in 2004. This increase is primarily a result of
costs associated with the increased sales growth, increased utility and fuel
costs, general cost increases, increased accounting fees, and an increase of
certain variable expense items based on sales, such as salaries, commissions,
marketing expenses and vehicle costs.

     Other income decreased by $27,275 to $213,282 for the nine months ended
September 30, 2005 from $240,557 for the same period in 2004.  This decrease is
primarily the result of a $58,007 gain from the settlement of a contingent
liability of a discontinued operation recognized in 2004 with no such gain in
2005, partially offset by a $36,196 increase in service charges collected in the
nine months ended September 30, 2005.

     Interest expense net increased 22.7% to $763,788 for the nine months ended
September 30, 2005 from $622,514 for the same period in 2004.  This increase is
primarily the result of the increase in prime rate which was 6.75% at September
30, 2005 compared to 4.75% at September 30, 2004, and additional interest
expense incurred on increased borrowings to support the Company's growth.


                                       17
<PAGE>
     Income tax expense increased by $73,361 as a result of a net tax benefit of
$481,417 for the nine months ended September 30, 2005 from a $554,778 net tax
benefit for the same period in 2004.  The Company recorded a net federal tax
benefit of $611,758 for the nine months ended September 30, 2005 in order to
recognize the expected utilization of available operating loss carryforwards,
compared to $645,600 in the nine months ended September 30, 2004.  In addition,
the Company recorded a state tax provision of $130,341 for the nine months ended
September 30, 2005 compared to $90,822 for the nine months ended September 30,
2004.

     The following table summarizes information derived from the Company's
consolidated statements of income expressed as a percentage of sales for the
quarter and nine months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                                  For the Quarter        For the Nine Months
                                                Ended September 30,      Ended September 30,
                                                 2005         2004        2005        2004
                                              -----------  ----------  ----------  -----------
<S>                                           <C>          <C>         <C>         <C>
Sales                                              100.0%      100.0%      100.0%       100.0%
Cost of sales                                       70.7        70.8        70.0         70.3
                                              -----------  ----------  ----------  -----------
Gross profit                                        29.3        29.2        30.0         29.7

Selling, general and administrative expenses        25.6        25.8        27.1         27.4
                                              -----------  ----------  ----------  -----------
Operating income                                     3.7         3.4         2.9          2.3

Other income                                         0.4         0.4         0.4          0.5
Interest expense                                    (1.6)       (1.5)       (1.6)        (1.4)
                                              -----------  ----------  ----------  -----------
Income before taxes                                  2.5         2.3         1.7          1.4

Income tax benefit                                   3.4         2.9         1.1          1.3
                                              -----------  ----------  ----------  -----------

Net income                                           5.9%        5.2%        2.8%         2.7%
                                              ===========  ==========  ==========  ===========
</TABLE>


                                       18
<PAGE>
Liquidity and Capital Resources
-------------------------------

Credit Facility

     The Company has a $15,000,000 secured loan facility pursuant to a credit
and security agreement ("Agreement") with Wells Fargo Business Credit, Inc.
("Wells") consisting of a revolving line of credit which expires on August 1,
2009, and a term loan with a balance of $812,977 as of September 30, 2005,
payable in equal monthly installments of $83,333.  Availability under the
revolving credit line is determined by a percentage of eligible assets as
defined in the Agreement, and was $12,995,414 as of September 30, 2005.  The
balance outstanding under the revolving line of credit including the term loan
was $11,557,168 as of September 30, 2005.  The revolving credit line bears
interest at .25% below prime, and the term loan bears interest at .50% above
prime.  Substantially all of the assets of the Company, as well as a pledge of
the stock of Colonial Commercial Corp.'s operating subsidiaries, collateralize
the loans.  The facility contains covenants relating to the financial condition
of the Company, its business operations, and restricts the payment of dividends,
subordinated debt, purchase of securities and capital expenditures.  The Company
is in compliance with all of its financial loan covenants.  All loans are due on
demand by the bank, and accordingly, have been classified as current
liabilities.

     As of September 30, 2005, the Company had $465,252 in cash and cash
equivalents compared with $310,659 at December 31, 2004.

     Net cash provided by operating activities was $1,224,912 for the nine
months ended September 30, 2005 compared to net cash used in operating
activities of $3,278,232 for the nine months ended September 30, 2004.  The net
cash provided by operating activities for the 2005 period is primarily a result
of net income approximating $1,339,868, non-cash benefit approximating $340,000,
offset by cash provided by operating assets and liabilities approximating
$224,000.  The increase in accounts receivable approximating $395,053 was
primarily a result of increased sales volume.  Accounts payable increased due to
increased inventory purchases to support the increased sales.

     Cash flows used in investing activities of $305,359 during the nine months
ended September 30, 2005 were due to purchases of equipment.

     The cash flows used in financing activities of $764,960 consisted of
$768,041 net borrowings under the Company's credit facility, $19,000 received
from the exercise of stock options, and $48,400 from the issuance of notes
payable.  Cash flows used in financing activities consisted of $48,919 for
repayments on notes payable and $15,400 from the purchase and retirement of
preferred shares.

     The Company believes that the credit facility is sufficient to finance its
current operating needs.  However, the business of the Company would be
materially and adversely affected if the bank demands payment of the loan and
the Company is unable to refinance the loan.


                                       19
<PAGE>
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

     Market risk represents the risk of changes in value of a financial
instrument, derivative or non-derivative, caused by fluctuations in interest
rates, foreign exchange rates and equity prices.  The Company has no financial
instruments that give it exposure to foreign exchange rates or equity prices.

     The Company's pre-tax earnings and cash flows are exposed to changes in
interest rates.  All borrowings under its credit facility bear interest based on
the prime rate less .25%, except for the term loan, with a balance of $812,977
as of September 30, 2005, which bears interest at a rate of prime plus .5% and a
$750,000 note to Goldman Associates of NY, Inc. which bears interest at prime.
A hypothetical 10% adverse change in such rates would reduce the pre-tax
earnings and cash flows for the quarter ended September 30, 2005 by
approximately $80,800 over a one-year period, assuming the borrowing level
remains consistent with the outstanding borrowings as of September 30, 2005.
The fair value of the borrowings under the credit facility is not affected by
changes in market interest rates.

     The Company's remaining interest-bearing obligations are at fixed rates of
interest and as such, do not expose the pre-tax earnings and cash flows to
changes in market interest rates.  The change in fair value of the Company's
fixed rate obligations resulting from a hypothetical 10% adverse change in
interest rates would not be material.

ITEM 4.  CONTROLS AND PROCEDURES
--------------------------------

(a)  Evaluation of Disclosure Controls and Procedures
     ------------------------------------------------

     An evaluation has been carried out under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and the operation of our
"disclosure controls and procedures" (as such term is defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934) as of September 30, 2005 ("Evaluation
Date"). Based on such evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that, as of the Evaluation Date, the disclosure
controls and procedures are reasonably designed and effective to ensure that (i)
information required to be disclosed by us in the reports we file or submit
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
(ii) such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

(b)  Changes in Internal Controls
     ----------------------------

     Subsequent to that evaluation, there have been no significant changes in
our internal controls or other factors that could significantly affect these
controls after such evaluation.


                                       20
<PAGE>
PART II.  OTHER INFORMATION
---------------------------

ITEM 1. LEGAL PROCEEDINGS

Universal Supply Group, Inc.
----------------------------

                                   Litigation
                                   ----------

     Universal Supply Group, Inc. is a New York corporation ("Universal").  On
June 25, 1999, Universal acquired substantially all of the assets of Universal
Supply Group, Inc., a New Jersey corporation, including its name, pursuant to
the terms of a purchase agreement.  The Company filed a copy of the purchase
agreement with the Securities and Exchange Commission on March 30, 1999 as
Exhibit 10(g) on Form 10KSB, and the Company filed a copy of an amendment to the
purchase agreement on July 9, 1999 as Exhibit 10(a)(ii) on Form 8-K.  Subsequent
to the sale, Universal Supply Group, Inc. (the selling corporation) formerly
known as Universal Engineering Co., Inc., changed its name to Hilco, Inc.
Hilco, Inc. acquired the assets of Amber Supply Co., Inc., formerly known as
Amber Oil Burner Supply Co., Inc., in 1998, prior to Hilco's sale of assets to
Universal.  Hilco, Inc. is hereinafter referred to as the "Predecessor."  The
majority shareholders of Hilco, Inc. were John A. Hildebrandt and Paul
Hildebrandt.

     The Company understands that Predecessor and many other companies have been
sued in the Superior Court of New Jersey (Middlesex County) by plaintiffs filing
lawsuits alleging injury due to asbestos. Currently, there exist 126 plaintiffs
in these lawsuits relating to alleged sales of asbestos products, or products
containing asbestos, by the Predecessor. The Company never sold any asbestos
related products.

     Of the existing plaintiffs, 13 filed actions in 2005, 38 filed actions in
2004, 31 filed actions in 2003, and 44 filed actions in 2002. Forty-nine other
plaintiffs have had their actions dismissed and seven other plaintiffs have
settled as of September 2005 for a total of $3,306,000. There has been no
judgment against the Predecessor. Our Universal subsidiary was named by
seventeen of the existing plaintiffs; of these, six filed actions in 2001, one
filed an action in 2003 and ten filed actions in 2005. No case that names our
Universal subsidiary has been settled or dismissed.

     As set forth in more detail below, the Company has been indemnified against
asbestos-based claims, and insurance companies are defending the interests of
the Predecessor and the Company in these cases.


                                       21
<PAGE>
     Based on advice of counsel appointed by the insurance companies, the
Company believes that none of the litigation that was brought against the
Company's Universal subsidiary through September 30, 2005 is material, and that
the only material litigation that was brought against Predecessor through that
date was Rhodes v. A.O. Smith Corporation, filed on April 26, 2004 in the
         --------------------------------
Superior Court of New Jersey, Law Division, Middlesex County, Docket Number
MID-L-2979-04AS. The Company was informally advised that the Rhodes case was
                                                             ------
settled for $3,250,000 under an agreement reached in connection with a
$10,000,000 jury verdict that was rendered on August 5, 2005. The Company was
not a defendant in the Rhodes case, and is in any event entitled to the
                       ------
indemnification and insurance coverage referred to below.

     The Company believes that Rhodes differed from the other lawsuits in that
                               ------
plaintiff established that he contracted mesothelioma as a result of his
occupational exposure to asbestos dust and fibers and that a predecessor of the
Company was a major supplier of the asbestos containing products that allegedly
caused his disease.

                                 Indemnification
                                 ---------------

     John A. Hildebrandt, Paul Hildebrandt and the Predecessor have jointly and
severally agreed to indemnify our Universal subsidiary from and against any and
all damages, liabilities and claims due to exposure to asbestos at any time
prior to the June 25, 1999 closing of the purchase agreement referred to
earlier.  These agreements are set forth in the purchase agreement. Paul
Hildebrandt, one of the indemnitors, was a director of the Company from
September 29, 2004 to January 28, 2005.

     The indemnitors may use their own counsel to defend these claims. The
indemnitors are not liable for any settlement effected without their consent.
The indemnitors may settle and pay money claims without the consent of the
Company. There is no indemnification unless claims aggregate $50,000; once this
trigger point is reached, indemnification is required for all claims, including
the first $50,000, but excluding claims of less than $10,000. The
indemnification requirement survives at least until 30 days after the running of
any relevant statutes of limitation.

     The obligation of the indemnitors is joint and several, so that the Company
can have recourse against any one or more of these indemnitors, whether or not
any other indemnitor has previously defaulted on its obligation to us.

     There are no other limitations to our rights to indemnification.

                                    Insurance
                                    ---------

     The assets that the Predecessor sold to us included its insurance policies
and other agreements and contracts. The policies provide coverage for liability
accruing during the periods for which premiums were paid.  The Predecessor was
formed in 1940. Copies of policies are available for each year beginning in 1970
and ending with the closing under the purchase agreement in 1999. Copies of
policies for the period from 1940 to 1969 are not available.


                                       22
<PAGE>
     Insurance companies acknowledge coverage for potential asbestos claims
under certain of these policies.  Insurance companies under additional policies
have reserved their right to deny coverage but have continued to defend and
indemnify the Predecessor and the Company under the contested policies.

     There are periods during the years from 1940 to 1999 in which our
Predecessor did not have coverage for potential asbestos claims.  Subject to
litigation, insurance companies may maintain that the existence of these
periods' results in coverage for only a portion of a particular injury that
varies with the period during which there was asbestos coverage relating to the
injury, and that the balance of any settlement or judgment is to be paid by the
insured.  To date, no insurance company has claimed any contribution for a gap
in coverage except for a claim for $159.64 made by one insurance company to the
Predecessor in 1995.  The Predecessor asserted that it had no obligation to pay
this amount and did not make any payment.

     Insurance companies have to date defended our Company and the Predecessor,
and have paid all settlement amounts and defense costs, except that the Company
understands that the insurance companies have not yet made payment for amounts
owed by the Predecessor under its August 2005 agreement to settle the Rhodes
                                                                      ------
case. Except for $159.64 referred to above, the insurance companies have not
requested any payments from us or from the Predecessor.

     Our Universal subsidiary has not engaged in the sale of asbestos products
since its formation in 1997. Its product liability policies for all years since
1998 exclude asbestos claims.

                                     General
                                     -------

     Regardless of indemnification and insurance coverage, we do not in any
event consider our Company to be liable for the asbestos-based lawsuits that
name us or for any other claim that arises as a result of actions or omissions
by Predecessor companies. We expressly disclaimed the assumption of any
liabilities when we purchased the assets of the Predecessor.

     It is management's opinion that the existing asbestos litigation will not
have a material adverse effect on the Company.  Nevertheless, the Company could
be materially and adversely affected if the Company is held liable for
substantial asbestos claims or if the Company incurs substantial legal or
settlement costs. This material and adverse effect would occur if indemnitors
fail to honor their indemnification agreements and insurance is not available
either because policy limits are exceeded, or because insurance companies
successfully claim limitations on their liabilities by reason of gaps in
coverage or otherwise.

     There is no accrued balance for any period relating to asbestos claims, and
no amount has been recorded for any period in any financial statement by the
Company for asbestos claims.  The Company does not regard as likely the
potential payment of any asbestos-based claim.


                                       23
<PAGE>
Atlantic Hardware & Supply Corporation
--------------------------------------

     On January 28, 2002, Atlantic Hardware & Supply Corporation ("Atlantic"), a
wholly-owned subsidiary of the Company, filed a voluntary petition with the U.
S. Bankruptcy Court for the Eastern District of New York to reorganize under
Chapter 11 of the U. S. Bankruptcy Code. On May 18, 2005, the United States
Bankruptcy Court for the Eastern District of New York dismissed the petition.
Atlantic is a discontinued operation and has no assets.  Neither Colonial
Commercial Corp. nor any of its other subsidiaries were part of the Chapter 11
filing.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
-------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                      Total Number of      Maximum Number
                                                     Shares Purchased    of Shares that May
                                                    as Part of Publicly   Yet Be Purchased
                 Total Number of    Average Price     Announced Plans    Under the Plans or
    Period       Shares Purchased  Paid per Share       or Programs           Programs
---------------  ----------------  ---------------  -------------------  ------------------
<S>              <C>               <C>              <C>                  <C>
September, 2005             7,700  $          2.00                7,700                   0
</TABLE>


     On August 16, 2005, the Company announced that it was offering to purchase
all shares of Convertible Preferred Stock that on August 15, 2005 were owned by
shareholders who then owned 99 shares or less for $2.00 per share.  The offer
expired September 30, 2005.  As a result of the offer, the Company purchased
7,700 shares of its Convertible Preferred Stock, which were retired.

ITEMS 3, 4 AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
----------------------------------------------------------

ITEM 6.  EXHIBITS
-----------------

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Office Pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer Pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002.


                                       24
<PAGE>
                                   SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Dated:  November 14, 2005               COLONIAL COMMERCIAL CORP.

                                        /s/ Bernard Korn
                                        ----------------
                                        Bernard Korn,
                                        Chairman of the Board and President

                                        /s/ William Salek
                                        -----------------
                                        William Salek
                                        Chief Financial Officer